CH. 18

THE GENERAL THEORY RE-STATED

24.7

factors, namely, the psychological propensity to con-sume, the psychological attitude to liquidity and thepsychological expectation of future yield from capital-assets, (2) the wage-unit as determined by the bargainsreached between employers and employed, and (3) thequantity of money as determined by the action of thecentral bank; so that, if we take as given the factorsspecified above, these variables determine the nationalincome (or dividend) and the quantity of employment.But these again would be capable of being subjected tofurther analysis, and are not, so to speak, our ultimateatomic independent elements.

The division of the determinants of the economicsystem into the two groups of given factors and inde-pendent variables is, of course, quite arbitrary from anyabsolute standpoint. The division must be madeentirely on the basis of experience, so as to correspondon the one hand to the factors in which the changes seemto be so slow or so little relevant as to have only a smalland comparatively negligible short-term influence on ourquaesitum ; and on the other hand to those factors in whichthe changes are found in practice to exercise a domin-ant influence on our quaesitum. Our present object is todiscover what determines at anytime the national incomeof a given economic system and (which is almost thesame thing) the amount of its employment; which meansin a study so complex as economics, in which we cannothope to make completely accurate generalisations, thefactors whose changes mainly determine our quaesitum.Our final task might be to select those variables whichcan be deliberately controlled or managed by centralauthority in the kind of system in which we actuallylive.

11

Let us now attempt to summarise the argument ofthe previous chapters; taking the factors in the reverseorder to that in which we have introduced them.