80 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK 
in wages will stimulate a further flow of such labor and this 
lessened pressure upon natural resources in the backward areas 
will give rise to a further increase in population and hence to a 
filling of the reservoirs upon which the industrialized sections 
may draw. 
There are several extraordinary features in such theories as 
those advanced by Taussig and Kleene. Not the least is the 
fact that Taussig, who has been such an unsparing critic of the 
residual theory of wages of General Francis A. Walker should 
nevertheless have constructed a very similar explanation as his 
own. Furthermore, the tendency of both to regard the supply of 
the other factor, in Taussig’s case labor and in Kleene’s case 
capital, as not being related to the price it receives is crucially 
defective. Finally, the curious belief of both that the supply 
curve of a factor does not 
have any influence on the 
processes of distribution 
unless itis virtually paral- 
lel to the base (i.e., of 
almost infinite elasticity) 
and that if there is no 
such supply curve bar- 
gaining strength alone 
determines what the final 
result will be, is a serious 
misapprehension of the 
economic process. The 
economic process is in fact 
one in which equilibrium 
is attained through the 
interactions of various forces—of supply curves as well as of total 
and marginal products. As we shall see, supply curves of what- 
ever description affect the result, and do not by any means need 
to be of infinite elasticity. 
\ 
1. Various Types of Supply Curves and the Meaning of 
Elasticity of Supply 
We shall secure a clearer concept of the influence of the forces 
of supply if we first examine the various types of supply curves 
that may conceivably operate and explore the meaning of rela- 
tive elasticity. An absolutely inelastic supply, which tends to