Re: Postulates of classical economics

[dimitris konstantareas <dimit@xxxxxxxx>]

Please note the problem of the zip-file was fixed; apologies for the
inconvenience. 
The paper in this file presents the incredible way Keynes' case was
closed back in the mid 1970's.
It is for those that they unaware of that.
At 01:21 PM 10/14/2002 -0400, you wrote:

> Paul Davidson recently said that
> Keynes  ??didn?t explicitly insist that we can?t draw the same labor
> supply curve as the classical economists do?. True, he did not insist,
> but I would like to draw the reader?s attention to his reply to Leontief
> in the 1937 QJE, on the labor supply issue. Leontief criticized Keynes
> for contradicting ?the orthodox homogeneity assumption?. In his reply,
> Keynes accepted the validity of Leontief?s observation but rejected 
> ?orthodox? homogeneity or ?the orthodox homogeneity postulate?-as defined
> by Leontief. This shows that Keynes? own labor market model does
> not employ the classical labor supply function. 
> A very good reason for which Keynes raised a comprehensive objection to
> the classical theory of labor supply is that under this theory the
> ?second postulate? holds good, in equilibrium. And Keynes who argued that
> classical equilibrium, with voluntary or frictional unemployment, is only
> ??a limiting point of the possible positions of equilibrium?, he no doubt
> introduced his General Theory as an equilibrium analysis of
> the ?general case?. 
> Had Keynes claimed ?unemployment disequilibrium? (Leijonhufvud 1968) then
> a homogeneous labor supply could fit with the rest of his system. Thus,
> when such a supply is employed doubts can be raised as have been raised,
> as to what Keynes meant by the term equilibrium. That is, orthodox
> homogeneity in Keynes? system is an intruder that prevents the reader
> from taking Keynes literally and seriously on key terms of the General
> Theory, and, thereby, on the ?subject? and object of it. Yet, the
> "intrusion" begun immediately after Leontief's 1936 paper.
> The other related big reason to orthodox homogeneity that has placed the
> investigation of Keynes? case on the wrong path and has led from
> unsatisfactory to incredible conclusions on Keynes as a logician
> cum economist is explored in my ?Keynes and the classics?
> I, that can be downloaded from:
> http://www.yorku.ca/dimit
>
>