E. 15. Memo. On Economic Studies in Oxford [a] , 
Economic studies in Oxford have now reached an important stage in their development.  Until recently recognition of this subject by the university was confined to the maintenance of the Drummond Professorship and of some minor examinations in the subject. In 1923 the first examination in the Final Honour School of Philosophy, Politics and Economics was held.  This examination has attracted a large and increasing number of candidates and bids fair to acquire a prestige no less than that of the other great honour examinations of the University.
With a view to preparing their men for it, most colleges have appointed a tutor in economics. At first these were so few in number and so preoccupied with their teaching duties, that they had little time to devote themselves to the advancement of their subject. 
The present position is that there are some twelve such tutors. They are all comparatively young men, and ambitious to make personal contributions to the furtherance of economics. This statement of needs in Economics has been initiated and endorsed by them.
It is taken to be a basic principle of cardinal importance that plans for the development of research should be so laid that college tutors are able to play a leading part in them.  This principle may be defended on two grounds.
1. The colleges have such prestige and the part they play in national education is so interesting and important, that college fellowships are, and are likely to continue to be, thought more desirable positions to win than research appointments outside colleges. Consequently if any attempt were made to build up an economics research department, mainly staffed in its higher grades by researchers holding posts not attached to college fellowships, the anomalous and disastrous situation would arise in which the ablest men available were engaged in the routine work of college teaching and the second best were responsible for the advancement of the subject.
2. Owing to the power and resources of the colleges, it is important that the leaders of economic studies in the university should be inside the colleges, in a position to influence college policy and secure college support for the subject.
Economists hold that a stage has been reached when the establishment of an Economics Institute is indispensable for further progress.  This statement contains a brief outline of the proposed functions and advantages of such an Institute.
First it may be well to explain the relation of this to the project for an Institute of Economic Statistics recently put forward. The proposals which follow do not conflict with but comprehend those outlined in the demand for an Institute of Economic Statistics.  If the larger scheme were realized, the Statistical Institute would become a department of the Economics Institute. The statistical scheme was drafted in terms which cut down needs to the barest minimum, to meet financial stringency, and was given priority over other economic needs, 1. because some institutional arrangement seemed most urgent in this department and 2. because the readership in statistics, which, it is hoped, will be established, was held to require it.
Secondly mention may be made of a still larger scheme for an Institute of Social Studies. It is not for the economists to make recommendations on this. They are well aware of the interconnexion between their own studies and those of public administration, psychology and other branches of the Social Sciences, and would welcome any machinery designed to secure co-operation and mutual assistance.
The adoption of the scheme for an Institute of Social Studies raises certain administrative problems. We do not propose to discuss these in detail. There are two main alternative possibilities. 1. Questions of policy might be determined by an expert academic committee (with departmental sub-committees) and be assisted by a general secretary, whose functions would be strictly limited to carrying out instructions. 2. It has been suggested, on the other hand, that it would be desirable to have an official in charge of the scheme as a whole with wider powers. In case this alternative is considered we desire to offer some observations. In the interests of economics it is most important that such an officer should be a person of high academic distinction, with full knowledge and appreciation of the problems and difficulties of scientific technique. A mere administrator, however great his abilities or wide his experience, would be quite out of place in such a position. Furthermore, the different branches of social study have reached different levels of maturity in the evolution of their technique, especially on the quantitative side. It is to be feared that economic interests might be endangered if such an officer, however distinguished, were chosen from a field of social study in which quantitative technique has not yet reached the level that is expected in economic investigation.
1. The Institute should be a centre of communication for information which is available in the current reports and returns of the numerous agencies which supply such information concerning their own activities; such are great industrial concerns, organisations of labour, trade, and industry, international organizations, and departments of economic research, public and private. It should be a practice of the Institute to be in communication with all such sources of knowledge [b] , and to receive their reports. It is desirable not only to acquire current materials but also to go some way towards remedying past deficiencies.
2. As regards publications of a more standard kind, such as the statistical abstracts of foreign countries, and other foreign periodicals, the Institute should relate itself to the Bodleian; partly in an advisory capacity and partly also, pending the reorganization of the Bodleian,  by receiving such publications as the Bodleian does not yet take, which would be handed over to the Bodleian later.
4. On the understanding that it is the policy of the Bodleian curators to allow full and free access to and facilities for working among all its economic materials, when the new scheme is completed, we think it undesirable to duplicate these materials at the Institute. Except for the temporary purposes above mentioned and the maintenance of a collection of current reference books the Institute would not need to become itself a library, so much as a centre of direction and information.
5. The task of collecting and organizing these materials is no easy one. We think that the first call on the funds of the Institute should be for the temporary appointment of a person of considerable economic knowledge at a salary of say £5-600, to set about this task. He would require assistants, in numbers which would be determined by the development of his work.
(i) It is our considered view that those who occupy the main teaching positions in Oxford, viz. professors, readers and college tutors should also play a leading part in research. At present, however, they (especially college tutors) tend to be overloaded with other duties.  It is felt that if the Institute had funds at its disposal, one of the most fruitful ways of applying them would be to make research grants for a term or a year to these persons, by means of which they could, through the machinery of the university or colleges, pay for the provision of substitute teachers for limited periods.
(ii) In cases where one of the aforementioned classes of person was undertaking an ambitious plan of investigation, it might be to his advantage to have one or more research assistants. Subject to the approval of his plan, this would constitute a proper claim on the funds of the Institute. More generally it could make grants to enable researchers to employ qualified persons to collect data and materials, in Oxford or elsewhere, which are necessary for their research.
(iv) The Institute might provide machinery for the better organisation and co-ordination of the research of D.Phil. and B.Litt. students. At present there is considerable waste in this field. In certain cases these students could be put on to do work connected with pieces of individual or collective research already being carried on by supervisors under the auspices of the Institute. In others it might merely be that the Institute would direct the attention of supervisors to unexplored fields of study, investigation in which would indirectly bear upon other work of which it had cognisance
Funds might occasionally be used for financing the publication of pieces of research, large or small, that would not be feasible on a purely commercial basis. This is particularly necessary in view of the large cost of publishing statistical tables.
1. Pure theory. We do not think that the Institute should be debarred from assisting, e.g. by securing relief from teaching, accredited economists who desired to do nothing more than remain in their studies and excogitate new theorems in the field of pure economic theory. Even in this field the direction of the work done would be powerfully influenced by the strengthening of empirical research in the University and by the increased facilities provided by the Institute for acquiring factual data with which to test hypotheses.
2. Microscopic statistics. It is increasingly felt that in many cases speculation would be immensely assisted if certain concepts could be given quantitative content. We cite as examples problems connected with elasticity of demand, cost functions, the length of the production process, the income velocity of money.
Sometimes it may be possible to make headway by the application of an elaborate and refined technique to published figures. The work done in this way on demand curves is well known. In this case the funds of the Institute would be useful in supplying computing assistants and machinery.
3. Macroscopic statistics. In this sphere the function of the Institute would mainly lie in assembling existing sources of information. There are not likely to be many [c] cases in which a University Institution would be the best body for compiling global figures e.g. of national income, foreign investments etc.
(i) Interest on the part of Oxford workers in these questions might stimulate government departments to increase the scope of their investigations and to make improvements in the form and range of their statistical returns.
(ii) It might be desirable not only to assemble in the Institute, but also to bring together from different sources and publish in an "Abstract" existing materials, hitherto little known or not mutually comparable because compiled by different institutions with different objects in view.
4. Current events and Economic Organization. Here again the Institute can mainly be of assistance in assembling materials. It has been proposed that machinery might also be generated for certain forms of what might be called "processing". For instance it has been suggested that a summary catalogue might be compiled and maintained of the terms of agreements between employers and employees. Again it has been suggested that a chronological summary of events significant for trade cycle studies might be maintained. Such enterprises would require clerical assistance.
A copy of the document is housed in the Rockefeller archives, with a note by Hugh-Jones to "SM" specifying that it was "enclosed 11-6-34". In a letter dated 27 November 1934, Kittredge (of the European office of the Rockefeller Foundation in Paris) reports to Van Sickle in New York that Harrod "has presented a scheme to the Board of Social Science Studies involving specialization in mathematical and analytical economics" (RF 1.1, Series 4015, Box 75, Folder 987). This description does not fit the memorandum altogether accurately, as it specified that the proposed Institute "should not be debarred from assisting [...] pure theory" rather than "involving" it. At this point, however, Kittredge's description should not be taken as to be very stringent, as he was merely reporting what Harrod had told N. F. Hall. A later memorandum by Kittredge to van Sickle specifies again that Harrod was the author of "a recent memorandum submitted to the [Hebdomadal] Council", and reports on its content much more accurately (Kittredge, "Development of Economics at Oxford", memorandum to J. van Sickle, 14 December 1934):
For a more detailed description of the context in which this memorandum was written see note 2 to this essay.
2. This memorandum "by a group of economists" was submitted to the Committee on a Scheme for the Development of Social Studies; Harrod was a member of this committee, which also included F. J. Lys (vice-chancellor and provost of Worcester), D. Veale (registrar of the university), C. R. M. F. Cruttwell (principal of Hertford College), and W. G. S. Adams (warden of All Souls). The committee was appointed by the Hebdomadal Council on 28 May 1934 after All Souls offered to establish a readership in statistics; its purpose was of examining the possibility of setting up a Statistical Institute (see note 7 to this essay) and reorganizing Social Studies in Oxford in the light of a possible financial support by the Rockefeller Foundation (see, however, Harrod's letter 371 to Meade of 4 October 1934, [jump to page] ). Other memoranda were received from the committee for anthropology, the professor of geography and the Wilde reader in mental philosophy (Hebdomadal Council Papers, vol. 159, October-December 1934, p. 121), while a specific memorandum on the proposed Institute of Economic Statistics was received from the Board of the Faculty of Social Studies (ibid., pp. 133-35; Proceedings of the General Board of the Faculties, vol. XXI, 1933-34, p. 88-90). On these grounds, a request for financial support was sent to the Rockefeller trustees in November 1934 (Hebdomadal Council Papers, vol. 159, pp. 123-27); this was approved, and a grant for £5,000 annually for five years was given with funding starting from 1 July 1935.
Disagreement soon arose as to the best use of this grant, in particular between Harrod and Lindsay, as the latter saw the economics fellows' program as "unduly specialized", and advocated instead more inter-disciplinary co-operation (see Lindsay's letters 430 , 431 , 432 to Harrod of 13 and 14 February 1935, and in particular note 1 to letter 430 for a more detailed summary of Lindsay's position). Eventually, the committee recommended that "a special Board be constituted to administer the special fund for assisting research workers", "which could gradually give definite shape to the scheme of studies in the light of experience" (Hebdomadal Council Papers, vol. 160, March 1935, pp. 203-12; Memorandum by Harrod, Veale and Lindsay, in Proceedings of the General Board of the Faculties, vol. XXII, 1934-35, pp. 269-70). On these developments see N. Chester, Economics, Politics and Social Studies in Oxford, 1900-85 (London: Macmillan, 1986), chapter 5, and Young and Lee, Oxford Economics and Oxford Economists (1993), chapter 5.
3. On the creation of PPE, or "Modern Greats" as it was also called, see for instance Chester, Economics, Politics and Social Studies in Oxford, 1900-85, chapter 3, and Young and Lee, Oxford Economics and Oxford Economists, 1993, chapter 1.
4. For an earlier complaint on the excessive burden of teaching see Harrod's letter 105 R to Lindemann of 24 February 1926.
5. This point was incorporated in the Social Studies Committee's letter to the Rockefeller Trustees (see note 2 to this essay), where it was stated that "the work of the University is inextricably interwoven with the College system [...] and it would be undesirable to attempt to develop social studies in Oxford on lines inconsistent with that tradition" (Hebdomadal Council Papers, vol. 159, p. 123).
6. Neither the Economics Institute nor the Institute of Social Studies mentioned below in the text ( [jump to page] ) were set up. The Department of Economics was only created in 1999.
7. The necessity of appointing a reader in Statistics was recognized since 1931. In Michaelmas term of 1932, a group of fellows formulated a plan for the creation of a laboratory in economic statistics, on which, however, the university authorities did not act. In May 1934, All Souls offered to establish such a readership with the purpose of contributing towards a scheme for an Institute of Economic Statistics. This offer was considered to be an adequate basis for approaching the Rockefeller Foundation in view of possible financial support. The Board of the Faculty of Social Studies submitted, in a memorandum to the committee inquiring on the matter (see note 2 to this essay), that there was "general agreement that economic studies can be advanced by a further analysis of statistical evidence in the light of the system of thought provided by economic theory". The Oxford Institute of Statistics was formally established on 22 October 1935 under the direction of the Social Studies Research Committee, with Marschak appointed as its director (in spite of Salter's disagreement: see letter 454 R). The Institute was renamed the Institute of Economics and Statistics in 1962. For a more detailed account see Chester, Economics, Politics and Social Studies in Oxford, pp. 54-55, and Young and Lee, Oxford Economics and Oxford Economists, in particular pp. 120-25.
8. During 1934-35 Harrod was a member of the Bodleian Library Building Committee, which was charged with putting into practice the decisions taken by Congregation in 1931 resulting from the inquiry of a commission, in which Harrod also took part, formed in 1930 (see the related correspondence, beginning at letter 172 R).
9. This was later perceived as one of the bones of contention in the disagreement between the group of young economics fellows and the older staff in the Faculty of Social Sciences: see Kittredge's summary of the positions in a memorandum to van Sickle of the Rockefeller Foundation, cited in note 1 to letter 430 , [jump to page] , and the passage cited in note 1 to this essay. The problem of the burden of College duties was accepted by Henderson as representing one of the weak points of the Oxford tutoring system (letter 433 , [jump to page] ). This problem was accounted for in Henderson's proposed method of inquiry, later adopted by the Oxford Economists' Research Group (see note 10 to letter 433 ). Accordingly, the Committee on the Scheme for Social Studies submitted to the Hebdomadal Council that "One of the most effective ways of enabling the Oxford tutor to do more research work is the making of research grants or lectureships the holding of which implies some corresponding diminution of College work" (Hebdomadal Council Papers, vol. 160, 15 March 1935, p. 205). Five of such research lectureship were filled in October 1935 (Chester, Economics, Politics and Social Studies in Oxford, p. 59).
- a. TD, not signed nor initialled, not dated, mimeograph, six pages, in RF 1.1, Series 4015, Box 75, Folder 984. Annotated, either in the sender's or the recipient's hand (see note 1 ).
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