Auftragsdigitalisierung / The general theory... [27

CH. 2 POSTULATES OF THE CLASSICAL ECONOMICS 7It would follow from this that there are only fourpossible means of increasing employment:(a) An improvement in organisation or in foresightwhich diminishes“frictional” unemployment;(b) a decrease in the marginal disutility of labour,as expressed by the real wage for whichadditional labour is available, so as to diminish“voluntary” unemployment;(c) an increase in the marginal physical productivityof labour in the wage-goods industries(to useProfessor Pigou's convenient term for goodsupon the price of which the utility of themoney-wage depends);or(d) an increase in the price of non-wage-goodscompared with the price of wage-goods,associated with a shift in the expenditureof non-wage-earners from wage-goods tonon-wage-goods.This, to the best of my understanding, is thesubstance of Professor Pigou's Theory of Unemployment–the only detailed account of the classical theory ofemployment which exists.1IIIs it true that the above categories are comprehensivein view of the fact that the population generally isseldom doing as much work as it would like to do onthe basis of the current wage? For, admittedly, morelabour would, as a rule, be forthcoming at the existingmoney-wage if it were demanded.2 The classicalschool reconcile this phenomenon with their secondpostulate by arguing that, while the demand for labour1 Prof. Pigou's Theory of Unemployment is examined in more detail inthe Appendix to Chapter 19 below.2 Cf. the quotation from Prof. Pigou above, p. 5, footnote.

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