40 THE GENERAL THEORY OF EMPLOYMENT BK. II

possess significance and validity within certain limits.But the proper place for such things as net real outputand the general level of prices lies within the field ofhistorical and statistical description, and their purposeshould be to satisfy historical or social curiosity, apurpose for which perfect precision—such as ourcausal analysis requires, whether or not our knowledgeof the actual values of the relevant quantities is com-plete or exact—is neither usual nor necessary. To saythat net output to-day is greater, but the price-levellower, than ten years ago or one year ago, is a proposi-tion of a similar character to the statement that QueenVictoria was a better queen but not a happier womanthan Queen Elizabeth—a proposition not withoutmeaning and not without interest, but unsuitable asmaterial for the differential calculus. Our precisionwill be a mock precision if we try to use such partlyvague and non-quantitative concepts as the basis of aquantitative analysis.

III

On every particular occasion, let it be remembered,an entrepreneur is concerned with decisions as to thescale on which to work a given capital equipment;and when we say that the expectation of an increaseddemand, i.e. a raising of the aggregate demand func-tion, will lead to an increase in aggregate output, wereally mean that the firms, which own the capitalequipment, will be induced to associate with it agreater aggregate employment of labour. In the caseof an individual firm or industry producing a homo-geneous product we can speak legitimately, if wewish, of increases or decreases of output. But whenwe are aggregating the activities of all firms, we cannotspeak accurately except in terms of quantities of em-ployment applied to a given equipment. The conceptsof output as a whole and its price-level are not requiredin this context, since we have no need of an absolute