CH. 20

THE EMPLOYMENT FUNCTION

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the ordinary supply curve is consonant with the methodsand objects of this book. In the first place, it expressesthe relevant facts in terms of the units to which wehave decided to restrict ourselves, without introducingany of the units which have a dubious quantitativecharacter. In the second place, it lends itself to theproblems of industry and output as a whole , as distinctfrom the problems of a single industry or firm in a givenenvironment, more easily than does the ordinary supplycurve—for the following reasons.

The ordinary demand curve for a particular com-modity is drawn on some assumption as to the incomesof members of the public, and has to be re-drawn if theincomes change. In the same way the ordinary supplycurve for a particular commodity is drawn on someassumption as to the output of industry as a whole andis liable to change if the aggregate output of industryis changed. When, therefore, we are examining theresponse of individual industries to changes in aggregateemployment, we are necessarily concerned, not with asingle demand curve for each industry, in conjunctionwith a single supply curve, but with two families ofsuch curves corresponding to different assumptions asto the aggregate employment. In the case of theemployment function, however, the task of arrivingat a function for industry as a whole which will reflectchanges in employment as a whole is more practicable.

Fof let us assume (to begin with) that the propensityto consume is given as well as the other factors whichwe have taken as given in Chapter 18 above, and thatwe are considering changes in employment in responseto changes in the rate of investment. Subject tothis assumption, for every level of effective demand interms of wage-units there will be a correspondingaggregate employment and this effective demand willbe divided in determinate proportions between con-sumption and investment. Moreover, each level ofeffective demand will correspond to a given distribution