Economic essays

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Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Elasticity of supply as a determinant of distribution / Paul H. Douglas

Collection:: Economics Books

ELASTICITY OF SUPPLY AS A DETERMINANT OF DISTRIBUTION 77 the supply curve of Factor X, i.e., at given prices or returns the amount of X which will be offered and (5) the supply curve of Y. The final equilibrium will result from the interaction of all these forces. To construct a valid theory of distribution, we must then build on marginal productivity (and for that economics will be forever grateful to Professor Clark); but we must build out beyond it to determine the effects of varying sets of supply schedules. Ultimately indeed economists should set themselves the task of determining inductively the actual supply schedules of the factors and if possible of their productivities as well. As will be intimated later on, this is by no means the hopeless task that most economists have feared it to be. 3. The Conscious or Unconscious Use of Supply Schedules in Economic Theory It is the purpose of this paper to draw out some of the theoreti- cal consequences in the process of distribution which result from differing sets of elasticities of supply of the factors of production and to indicate some of the lines of inductive investigation which should be followed if we are to determine them quantitatively. Before proceeding to this analysis however, it may be worth while to point out that in practice virtually every theory of distribution which has aimed to explain the long-run tendencies has in fact rested its case upon some assumptions of the probable behavior of the supply of the factors consequent upon changes in their rate of remuneration. Thus the mercantilists believed that the real wages of the workers should be lowered and not increased. This followed from their belief that an increase in wages would cause a corre- sponding decrease in the number of hours the laborers would work since the latter would now be able to secure the same standard of living with fewer hours of work. A decrease in real wages would therefore cause the workers to put in more hours of work in order to maintain their former position. Thus the public policy advocated by this group proceeded from their belief that the supply curve of labor was negatively elastic and that this elasticity was equal to unity. ! For a review of mercantilistic doctrine on this point, see E. S. Furniss, The Position of the Laborer in a System of Nationalism, and an article by T. E. Gregory in Volume I. of Economica.

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