231. D. H. Robertson to Harrod , 6 April 1932 [a]

[The exchange continues at 234 ]

6 April 1932

My dear Roy,

I have spent today most interestingly reading this opus. [1] ,   [2] I should like to pore over it longer, but since I must press on with the re-writing of my own lectures, I think I had better return it for the present,--with my compliments on you having progressed with it so far.

I have scribbled some--I hope easily erasable--pencil comments,--not most of them very well thought out! For I do not profess to have followed the more intricate & symbolic parts of the argument with the thoroughness they deserve.

I must try to separate my criticisms, such as they are, into those of a reviewer (I) and those of an editor (II). [c]

I (1) Ch II [3] is on such different lines to those which (following Edgeworth's & Marshall's lead in huddling comp[arative]. costs into the background in form of reciprocal demand [4] ) I've been accustomed to think along, that I haven't readjusted myself sufficiently to be sure how far I agree! I find the notion of price = marginal costs extremely difficult to interpret once one has posited, as I think you do, the commensurability of all factors of production, thereby in effect abandoning the theory of rent. See note on p. 15.

(2) Just as you start by assimilating "wages" & "rent", and then tacitly divorce them, so it seems to me you do later with "wages" and "profits"--i.e. you tacitly slip in the Keynesian apparatus of the consequences of the divergence of entrepreneur's incomes from an assumed "normal" without sufficient explanation of what you are doing.

(3) In ch VII, (wh[ich]. I find v[ery]. interesting), I find the notion of "monetary requirements" very elusive. [5] It is clearly not the same as the Marshallian "desire to keep real resources in monetary form", since the latter (as you point out) goes up in depression, while your "monetary requirements" apparently go down. Perhaps my difficulty is due to my being insufficiently read in classical controversies about their "redundancy" of money,--<+>--I thought (as you seem to admit) that it was during a local inflation that such "redundancy" was held to occur.

(4) I feel that you make the conclusions of ch. VII seem more opposed to common opinion than they are by keeping the short balances up your sleeve till the end. [6]

(5) I think (but this of course is my private & particular hare!) that you are not nearly sceptical enough about the possibility of expanding credit in proportion to production without periodically glutting the capital market,--& I don't understand at all the passage about the natural rate of interest! [7]

II Qua editor, I feel that the different parts of the book differ very much in difficulty. At times, as in the first part of the ch. on comp[arative]. costs, you are elaborately simple,--at others, as in part of the tariff chapter, [8] highly condensed. No doubt this is inevitable to some extent. Also I expect some of the more formidable-looking parts look more difficult than they are. But I do wonder whether it is possible to simplify, even at the cost of expanding in length, some of the argument, esp. in ch VIII and X, [9] --and even to relegate some at least of the formulae to footnotes. [10] Granted that all the C[ambridge]. E[conomic]. Handbooks that are any good have turned out to be much more difficult than they were originally meant to be, I feel that parts of yours set a new standard of advancedness which may limit its usefulness for the purpose for which it's intended. Also sometimes, esp. in ch. III, you seem to me to go further outside the field of strictly international affairs than necessary.

Forgive these rather hasty & crudely-expressed comments.

Yours

DHR.

  1. 1. An early draft of International Economics (Harrod 1933:10 ). This was revised several times in reply to Robertson's and Keynes's comments and criticisms: extensive re-writing took place at the end of summer 1932 (letters 253 , 254 , 255 and 258 ) and early in 1933 (letters 273 , 274 , 275 , 276 , 277 , 278 and 280 ) but minor adjustments were introduced at intermediate stages also. Some alterations must have been quite radical: in this letter, for instance, ten chapters are mentioned, while in the final version there are only nine. None of the drafts or proofs survive (except a small frament reproduced as essay 9 ), all of Robertson's marginal comments are therefore lost, as well as most of Harrod's letters to Robertson and Keynes. In most cases it will therefore prove impossible to locate in the final version the passages to which the correspondence refers. Only plausible references to Harrod's book will be indicated.

    2. International Economics was commissioned by Keynes, who was the editor of the Cambridge Economic Handbooks series in January 1927 (letter 131 ); at first Harrod stipulated with Nisbet & Co. that he would have prepared the book by August 1928, but he did not feel up to the task and set the project aside for a long time (for more details see note 1 to letter 135 ). The stimulus to resume the project seems to have come from the political situation in October 1931, when tariffs were at the centre of the debates of economic policy: see the pamphlet here reproduced as essay 7 .

    3. The law of comparative costs is discussed in International Economics ( 1933:10 ), chapter II.

    4. F. Y. Edgeworth, "The Theory of International Values", Economic Journal, 1894 (reprinted in Papers Relating to Political Economy, vol. II, London: Macmillan, 1925, pp. 3-60; see in particular section II). Marshall, Money Credit and Commerce (1923), book III, chapter VI § 3.

    5. International Economics ( 1933:10 ), p. 131. Chapter VII of the draft thus corresponds to chapter VI of the final version.

    6. Harrod met this comment by anticipating to the beginning of the final section of chapter VI a reference to the items in the balance of payments on current account ( 1933:10 , p. 130).

    7. A further comment by Robertson (letter 234 , [jump to page] ) suggests that this passage could have been altered into pp. 131-33 of International Economics.

    8. International Economics ( 1933:10 ), chapters II and IX, respectively.

    9. Since it would seem that the chapter dropped in re-writing was either III, IV, V or VI (compare notes 3 and 5 ), Robertson must be referring to chapters VII and IX of International Economics.

    10. A number of formulas have been moved to the appendix ( 1933:10 , pp. 203-6).

    1. a. ALI, two pages on one leaf, in HP IV-990-1069d/8.

      b. Ms: «erasible».

      c. Ms: "I" and "II" were written, respectively, above "reviewer" and "editor".


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