ECONOMICS and CHEMICAL ENGINEERING C. A. BASORE Alabama Polytechnic Institute, Auburn, Alabama
The graduate of the four-year course i n chemical engineering usually finds a place in ihe constrnc~ion,design, or operation of chemical plants. I n many instances he begins his work in the analytical laboratory or, of late years, with the reseurch sla$ of a large comfiny. ITis work in such organiwtwns often includes the development
of new @ocesses, &hereduCti0n of the cost of operation of existing processes, the disposal of waste products, the recoerery of by-products, and similar work. Many graduates become technical salesmen. I t i s desirable that they undertake their duties with some knowledge of the economic significance of their work.
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chemical engineering and pure engineering. Such a curriculum is usually very full. As a matter of fact it is often difficult to find time for all the subjects which are considered necessary. A curriculum of this sort appears to meet the requirements of many graduates.
HE curricula of many colleges and universities, recognizing the broad training and diversified work required of the chemical engineer, include the fundamentals of chemistry, physics, and mathematics, together with a certain amount of work in
However, men engaged as technical salesmen or men engaged in research, soon feel the need for additional training. The plant operator having been promoted to an executive position likewise feels that he needs more training. What additional knowledge is required by these chemical engineers? The answer to this question is obvious from a study of the problems requiring solution by these men. Some of the questions with which these men are vitally concerned are as follows: Is a given new process commercially feasible? What will be the probable market for a new product and how this market be distributed geegraphically? w h a t are the factorsaffectingthelocation of chemi. cal plants? What are the most recent ideas regarding the proper use of cost data? What is the best method for calculatinz - depreciation? What is the significance of a long-range decline in the price of commodities? When is expansion worthy of serious consideration and when is it particularly dangerous? These and many other problems confront the chemical engineer. He realizes that the solution to these problems lies in the field of economics and he wonders why he was not required to take work of this kind while he was in college. In a field as broad as chemical engineering many subjects must he omitted from the curriculum. However, it is difficult to understand why the importance of basic work in economics has not received more general recognition. Some institutions have recognized the importance of such work by including courses in this subject. Often this is merely a three- or four-hour course in general economics. Many leading institutions include cultural and elective work but do not specify economics. Sixty-five institutions1 several years ago required 13.9 per cent. cultural work and 3.7 per cent. electives, but there is no mention of economics. Recent catalogs of seventeen institutions (chiefly state universities) supplied some interesting information in this connection. S i x , or 35.3 per cent., required no economics in the fouryear course in chemical engineering, although in some cases probably work along this line was given under the head of electives, while fourteen, or 82.3 per cent., required not more than three hours of economics. Apparently, seldom is more than a superficial knowledge of the subject required. It is believed by the writer that from twelve to fourteen hours could be devoted advantageously to economics. It is not believed that this is excessive in a field where the underlying motive is production at a pofit. After all, this is often a fewer number of hours than is devoted to, say, mathematics which, while important, is after all primarily a tool. It is possible for a chemical engineer to pursue his profession and have com-
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Ckm. & Met. Eng., 35,338 (1928).
paratively little need for higher mathematics, but it is doubtful if he can be engaged in real chemical engineering work, research, salesmanship, plant operation, executive work, etc., and not have a real need for economics. With regard to the subject matter and methods of teaching the economics, no doubt several points of view might be equally good. The writer believes that the elementary courses should be service courses designed for this purpose and taught by the economics department. The more advanced courses where economics and technology meet probably should he taught by the department of chemical engineering. As far as the subject matter is concerned the following courses might he of some interest, although it is recognized that different courses might be designed which might meet the situation more satisfactorily: Course I-Sem. 1-Credit 3 hrs. Elematary Coursc in EcoD m m e d for the Chemical Enpiseer. (1) General characteristics of the present economic order. (2) Organization of business, partnerships, corporations, trusts, holding companies, etc. (3) Internal organization of business. (4) Money and banking. (5) Business cyclcs4escription. how measured, effects, causes, peculiarities, etc. (6) Price levels and price determination. (7) Costs-verhead, variable, decreasing, increasing, average. Course I I S e m . %Credit 3 h n . Introductmy Course (conlinued). (1) Marketing-market analysis, channels of distribution, salesmanship, advertising, market finance, etc. (2) Foreign trade. (3) Monopoly-how to get advantages of. (4) Business finance, kinds of stocks, bonds, etc. (5) Personnel administration-welfare work, employee representation, etc. (6) Insurance-fire, liability, and compensation. Course 111-Sem. 1-Credit 3 hrs. Applied Chemical Engineering Economics. This come designed t o cover the field where economic and technical considerations are both involved. Economic and technical characteristics of the chemical engineering industries. economic statistics of the chemical engineering industries, cammercial feasibility of new technical pracesses, capital ratios and their application t o the chemical engineering industries, wage and raw materials ratios, economic and technical developn~entof chemical engineering projects, economic factors affecting plant location, plant design (brief survey), industrial management (brief survey), etc. Course I V S e m . 1-Credit 2 hrs. Chemical Engineering Cod Estimating. Application of accounting principles to chemical engineering. Budeetine: balance sheet, methods of calculatin~ - -. de~reciation. . production costs, etc 1 hr. Pnsonal Relations or Course V-Sem. 1-Credit Human Engineering. The adjustment of the young engineer t o varying economic conditions; importance of personality and character; relation between technical and human conditions. Course V I S e m . 1-Credit 1 hr. Introduction to Chemical Engineering Research. Develo~ment of the line of attack emdoved -~ . . in chemical enaineering ricearch including both economic and technical asp&. lnrestigation of the literature is strcssrd with special attention to abstracts, bibliogrzphirr, and patcnu.
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It is not believed that the courses described above require any particular comment. The first course serves not only to introduce the student to the subject,
but also includes some valuable information, much of which has a direct application in chemical engineering. Money and banking and business cycles are believed to be particularly important. The second course takes up marketing in considerable detail. The importance of this to the chemical engineers, engaged as research men, as salesmen, or as executives, is obvious. Foreign trade, business finance, and monopoly are also discussed briefly. The third course covers specifically that field where economics and technology meet which is often of so much importance to the engineer. It gives him some training in his attempt to find answers to problems like the following: (1) Does the present offer a good opportunity to stock up on raw materials or can it be done more advantageously later? (2) Is a certain new process developed by the research department practical, i. e., is it commercially feasible? (3) By means of the capital ratio deduce the technical conditions, i. e., labor-saving machinery, research, etc., existing in a certain chemical industry. (4) How do economic conditions affect the design of chemical plants? ( 5 ) How is the location of chemical plants governed by economic conditions? (6) How can one tell when the raw materials ratio is abnormally high in a given chemical industry? The importance of training in cost estimating is obvious. All engineers recognize the importance of being able to get up an accurate estimate of the initial cost or operating cost. The last two courses are also believed to be worth while. The importance of social adaptability to the technical graduate is now being recognized as perhaps it has never been recognized before. An introduction to research (economic and technical) is supported on the ground that while perhaps the undergraduate has little time to
devote to research, nevertheless, after he graduates and accepts a position, he is frequently called on to do work of this character. Those opposed to such a program as the one outlined above will immediately ask how is it possible to find time for the addition of economics to the cnrriculum. The answer is to require it in place of some of the cultural or elective work. Of the sixtyave institutions previously mentioned, 13.9 per cent. of the time was devoted to cultural subjects and 3.7 per cent. to electives. On the basis of a 140-hour curriculum, fourteen hours of economics would require only slightly more than half of the time now devoted to cultural subjects and electives. Even from the cultural standpoint, the economics would be of appreciable value. In the opinion of the writer, it is unlikely that this substitution would lead to serious loss in cultural value. According to our early ideas chemical engineering embraced primarily the fundamentals of chemistry. At this stage in its development frequently a little more mathematics and shop work were added to the existing course in chemistry. Later, it was recognized to include not only the fundamentals of chemistry but in addition the fundamentals of pure engineering (mechanical and electrical engineering), and the unit processes of chemical engineering. According to the plan which has been suggested economics likewise becomes of major importance. In thus developing a course consisting of the fundamentals of three great divisions, we believed that the average student will secure a grasp of his subject and a practical viewpoint toward his work which will be very beneficial. It is believed that such a course will offer the maximum service from the standpoint of opportunity, breadth of vision, and training.
