156. J. M. Keynes to Harrod , 1 August 1928 [a]

[Replies to 155 ]

Tilton, Firle, Sussex #

1 August 1928

Dear Roy,

I hope you will salve something of the article. [1] But if you pursue the matter on the basis of assuming full competition will you not be up against all the usual increasing and decreasing returns difficulties--a difficulty, that is to say, as to how firms of different sizes can exist together in conditions of full competition unless there is a constant return? [2] I am still an adherent of the theory put forward by Sraffa in his Journal article [3] to the effect that observed results could only be explained by assuming that each producer has within certain limitations his own private and local market.

Yours ever,

JMK

R. Harrod, Esq., Christ Church, Oxford

1. 1. Harrod suffered of a nervous breakdown which did not permit him to re-examine the paper soon (Harrod communicated to Lindemann on 28 July that the doctor ordered a month rest, as a consequence of a slight sunstroke, as he was too vigorous outdoors and correcting school certificate papers at the same time in the heat wave: in CHER k142/5).

   This illness has been attributed to Keynes's rejection of Harrod's "Notes on Monopoly and Quasi-Competition" (E. H. P. Brown, "Sir Roy Harrod: A Biographical Memoir", 1980, p. 9). In reality, it was due to the stress caused by Harrod's mother's melancholy. In an autobiographical statement written for his therapists, Harrod described his years as an undergraduate as alternating moments of exhilaration due to participation in a number of clubs and societies, and depression due to Frances Harrod's disease; this led him to a first nervous breakdown (see note 1 to letter 8 R) and on the edge of suicide (the passage is cited in note 2 to letter 29 R). Later her state improved slightly, and Harrod "got over suicide and murder obsessions". However, the situation remained tense, and eventually precipitated:

   • Coming to the immediate past--after a strenuous summer term I thought it would be good if we both took a long holiday in Cornwall. Actually it proved most nerve-racking, because she is always more difficult [b] away from home. I got a friend to stay with us, not a particular friend of mine, but an acquaintance whom she had especially liked. But a rift occurred in their relations. I had to keep things going between them, I had large bundles of papers to correct, I was worrying a lot about my future (as described above) I was worrying about my unwritten book, I had a little article for a learned journal rejected; then tho' out of training I played a lot of tennis at the hotel and surf-bathed with vigour. Then I had my first attack (untitled statement, end of summer 1928, seven pages, in pencil, HPBL Add. 72775/11-17).

   (For references to the papers to correct see letters 152 , [jump to page] , and 153 , [jump to page] ; the unwritten book is International Economics, later published as 1933:10 : see note 1 to letter 135 )

   Harrod slowly recovered, and eventually resumed the discussion with Ramsey in July 1929 (see letter 168 ), who withdrew his criticism. The first part of Harrod's note was saved, and formed the core of section II of "Notes on Supply" ( 1930:3 ).

   2. Harrod discussed the implications of imperfect competition on the laws of returns in particular in "The Law of Decreasing Costs" ( 1931:2 ), but hints can also be found in "Notes on Supply" ( 1930:3 ), pp. 237-39.

   3. P. Sraffa, "The Laws of Returns under Competitive Conditions", Economic Journal XXXVI, December 1926, pp. 535-50.

   1. a. CcTLI, one page, in HP II-18, with envelope addressed to Christ Church; further copy in HP II-200 and JMK EJ/1/3/92, photocopy of the latter in RFK/14/75/74. Reproduced by kind permission of the Provost and Scholars, King's College, Cambridge.

      b. Ms: «difficile».

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