CHAPTER 18

The General Theory of Employment Re-stated

i

We have now reached a point where we can gather to-gether the threads of our argument. To begin with,it may be useful to make clear which elements in theeconomic system we usually take as given, which arethe independent variables of our system and which arethe dependent variables.

We take as given the existing skill and quantity ofavailable labour, the existing quality and quantity ofavailable equipment, the existing technique, the degreeof competition, the tastes and habits of the consumer,the disutility of different intensities of labour andof the activities of supervision and organisation, aswell as the social structure including the forces, otherthan our variables set forth below, which determinethe distribution of the national income. This does notmean that we assume these factors to be constant; butmerely that, in this place and context, we are not con-sidering or taking into account the effects and conse-quences of changes in them.

Our independent variables are, in the first instance,the propensity to consume, the schedule of the marginalefficiency of capital and the rate of interest, though, as wehave already seen, these are capable of further analysis.

Our dependent variables are the volume of employ-ment and the national income (or national dividend)measured in wage-units.

The factors, which we have taken as given, influence245