Income = Output?

[Harry Veeder <eo200@xxxxxxxxxxxxxxxxxxx>]

Gunnar Tómasson wrote:
<snip>
>
> "I sympathise, therefore, with the pre-classical doctrine that everything is
> produced by labour [Of course!], aided by what used to be called art and is
> now called technique, by natural resources which are free or cost a rent
> according to their scarcity or abundance, and by the results of past labour,
> embodied in assets, which also command a price according to their scarcity or
> abundance.  It is preferable to regard labour, including, of course, the
> personal services of the entrepreneur and his assistants as the sole factor of
> production, operating in a given environment of technique, natural resources,
> capital equipment and effective demand.  This partly explains why we have been
> able to take the unit of labour as the sole physical unit which we require in
> our economic system, apart from units of money and of time."
>
> Amen!
>
> As for those who would contend otherwise, let them attempt to make their case
> - and, in so doing, come to recognize that there is NO refuting Keynes' lucid
> conclusion.
>
> Gunnar


I accept the pre-classical doctrine, but translating the doctrine into
mathematics is a delicate matter. If one embraces the doctrine, then the
assumption that income is equivalent to output logically implies labour is
exclusively motivated by output.

Harry Veeder


> ----- Original Message -----
> From: Robert Williams <mailto:vic93@xxxxxxxxxxxx>
> To: Gunnar Tómasson <mailto:gunnar.tomasson@xxxxxxxxxxx>
> Sent: Friday, September 26, 2003 8:19 PM
> Subject: Re: US Trade Deficit As 'World Engine Of Growth'?
>
> I wonder if this is why Keynes measured all things in labour units with the
> insistence that one distribution of labour would produce one unique level of
> output because of the labour that went into it.
> Bob Williams
> It ignores the implications for monetary economics of Keynes' "conviction"
> that one must "commence [by] identify[ing] income with the value of output."
>
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