CH. 2 POSTULATES OF THE CLASSICAL ECONOMICS 9the supply of labour is a function of real wages alone,their supply curve for labour will shift bodily withevery movement of prices. Thus their method is tiedup with their very special assumptions, and cannot beadapted to deal with the more general case.

Now ordinary experience tells us, beyond doubt,that a situation where labour stipulates(within limits)for a money- wage rather than a real wage, so far frombeing a mere possibility, is the normal case. Whilstworkers will usually resist a reduction of money- wages,it is not their practice to withdraw their labour when-ever there is a rise in the price of wage- goods. It issometimes said that it would be illogical for labour toresist a reduction of money- wages but not to resist areduction of real wages. For reasons given below( p. 14), this might not be so illogical as it appears atfirst; and, as we shall see later, fortunately so. But,whether logical or illogical, experience shows that thisis how labour in fact behaves.

Moreover, the contention that the unemploymentwhich characterises a depression is due to a refusal bylabour to accept a reduction of money- wages is notclearly supported by the facts. It is not very plausibleto assert that unemployment in the United States in1932 was due either to labour obstinately refusing toaccept a reduction of money- wages or to its obstinatelydemanding a real wage beyond what the productivityof the economic machine was capable of furnishing.Wide variations are experienced in the volume ofemployment without any apparent change either in theminimum real demands of labour or in its productivity.Labour is not more truculent in the depression than inthe boom—far from it. Nor is its physical pro-ductivity less. These facts from experience are aprima facie ground for questioning the adequacy of theclassical analysis.

It would be interesting to see the results of astatistical enquiry into the actual relationship between