716. F. H. Knight to Harrod , 20 November 1937 [a]

[The exchange continues at 815 R]

Department of Economics, The University of Chicago #

20 November 1937

Dear Mr. Harrod:

The course of events has just led me to reread your article on imperfect competition in the Quarterly Journal of Economics for 1934, [1] and I am moved to express my approval and admiration of an exceptional piece of theoretical analysis. If I may be allowed the impropriety of saying so, the occasion involved a critical comparison with the similar article by my colleague, to which you [b] make a reference at one point, [2] and this fact accentuates my feeling of the worth [c] of your performance. May I add another impropriety of the same sort? The feeling is further strengthened by the minimal reference you make to the two books which nominally prompted the article. [3] My main criticism of your article itself would be that of too much use of the phrase "imperfect competition," where the old term "monopoly" would convey the meaning with much less effort and danger of confusion to the reader. My feeling toward the whole furore regarding imperfect competition has been rather one of negative enthusiasm on just this point. At best it should be a collective term for the theory of monopoly and that of "oligopoly," or at least some terminology should be used to separate the two lines of inquiry--it seems to me!

The particular occasion, or "reason" for this letter is that I should like to ask permission to have the article manifolded for the use of students. I should also of course ask the consent of the Harvard University Press, which I am sure they will grant. This I think particularly needs doing, because the Zeitschrift article of Professor Viner [4] has been manifolded and used both in England and this country, and your treatment is right in so many connections where his is defective--and the comparative study of the two should be of the highest value to students in any case. I may inquire also whether you chance to have still a reprint of the article, to spare. If I am able to go ahead with the manifolding, this would be a special convenience, and in that case I should be glad to let you have as many of the planotyped copies as you would have use for. [5]

I have made reservations for a passage to England in May, arriving at Southampton May 9th and leaving for home May 25th. So I have some hopes of being able to visit you and the university, and possibly to accept your kind offer of hospitality there, [6] some time during my stay, short as it is. I am writing this letter in haste, as I must spend the rest of my morning in a faculty conference and will not be at the office again until Monday. After I am able to give the subject some further study, I think I shall want to raise some further questions with you about the second part of your [d] Q. J. E. paper, in relation to recent discussions of the economics of socialism, notably those of Messrs. Durbin and Lerner in the Economic Journal for March and June. [7] There are several features of this argument about which I am not satisfied, but it may all come clear on further study.

Cordially yours,

Frank H Knight

Mr. R. F. Harrod, Christ Church [e] , Oxford, England

  1. 1. Harrod, "Doctrines of Imperfect Competition" ( 1934:3 ).

    2. J. Viner, "Cost Curves and Supply Curves" (1931). The article is cited by Harrod on p. 451n.

    3. J. V. Robinson, The Economics of Imperfect Competition (1933); E. H. Chamberlin, The Theory of Monopolistic Competition (1933).

    4. See note 2 .

    5. Knight actually proceeded with the reproduction of Harrod's article, except for the last two sections (Knight to Harrod, 29 July 1938, in HPBL Add. 72764/125). Harrod later commented that the omission of those sections rather disappointed him, as they depicted what seemed to him "the seminal feature in the new theories of imperfect competition" (Harrod, "Imperfect Competition, Aggregate Demand and Inflation", Economic Journal LXXXII, March 1972, p. 395).

    6. See letter 684 , [jump to page] . The visit to Oxford actually took place on 22 May: see note 2 to letter 815 R.

    7. There are no articles or notes from Durbin nor Lerner in the March 1937 issue of the Economic Journal. References are probably to A. P. Lerner, "Statics and Dynamics in Socialist Economics", Economic Journal XLVII, June 1937, pp. 253-70 (which discussed Durbin's earlier contribution on "Economic Calculus in a Planned Economy", Economic Journal XLVI, December 1936, pp. 676-90); and E. F. M. Durbin, "A Note on Mr. Lerner's "Dynamical" Propositions", Economic Journal XLVII, September 1937, pp. 577-81.

    1. a. TLS, two pages on two leaves, in HP IV-690.

      b. Ts: «your».

      c. Ts: «w rth».

      d. Ts: «you».

      e. Ts: «Christchurch».

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