717. D. H. Robertson to Harrod , 23 November 1937 [a]

[Replies to 701 and 702 , continues at 746 , answered by 748 ]

Trinity [College, Cambridge]

23 November 1937

My dear Roy,

Having worked through the enclosed again, I hereby hand them over to you in absolute ownership. [1]

In your penultimate letter there is much about Swedish expectation terminology etc. [2] on which there is more, no doubt, to be said, though I don't feel able to say it at the moment. But in the PS to that letter and in your ultimate letter, [3] you seem to me quite definitely to have struck a mare's nest.

Of course if you insist on confining your vol I to the discussion of stationary states [4] you must frame your theory of interest accordingly, and not talk about it being the price of net saving or about its being influenced by the progress of invention etc. But neither roundaboutness nor time preference ceases to be relevant in a stationary state. The condition for full static equilibrium, with no growth of capital, is not that interest should be zero [5] but that it should be equal to the rate of time preference. See Pigou, Economics of Stationary States, chs X and XXXII; Ramsey, A Mathematical Theory of Saving, Ec. Journal 1928. [6]

Personally, having been brought up in the Marshallian tradition, tempered by Cassel, [7] I am not shocked at introducing progress into vol I, & framing my discussion of interest accordingly. But the mere fact that so deep and subtle a thinker as you can fall into this Schumpeterian pit does seem to indicate that it will be better for us each write three volumes in future,--Stationariness, Progress and Fluctuation.

It was delightful to see you so happy, and--so far as I could judge--so justifiably so. [8]



The enclosed will appear ultimately in a more convenient format, [9] but you may care to have this ad interim,--though I can't suppose you have much time or appetite for such things at the moment.

  1. 1. See note 1 to letter 701 . Robertson must have returned Harrod's letter and his own; all were found among Harrod's papers.

    2. Letter 701 , [jump to page] .

    3. Letter 702 , [jump to page] .

    4. Letter 701 , [jump to page] , and letter 702 , [jump to page] .

    5. Letter 701 , [jump to page] .

    6. A. C. Pigou, The Economics of Stationary States, London: Macmillan, 1935. The chapters referred to are on "The Size of Robinson's Capital Stock and the rate of Interest in a Stationary State", and "The Maintenance Function of Capital in General", respectively. F. P. Ramsey, "A Mathematical Theory of Saving", Economic Journal XXXVIII, December 1928, pp. 543-59.

    7. See letter 625 , [jump to page] .

    8. Robertson must be referring to Harrod's forthcoming wedding with Wilhelmine (Billa) Cresswell. The couple married on 8 January 1938.

    9. D. H. Robertson, "A Survey of Modern Monetary Controversy" (1938). The article was read as a paper before the Manchester Statistical Society on 10 November 1937. Harrod commented upon it in July 1938: see letter 789 .

    1. a. ALI, two page son one leaf, in HP IV-990-1069d/54.

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