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.146 Besides this, there is a further subdivision of alternativesaccording as before the strike, wages in the given trade were or were notbelow the general level of wages (of course taking into account the netadvantages of different occupations).If they were, then, except for thereasons suggested above there need be no reaction, and the strike maymerely have expedited a rise that would inevitably have occurred sooneror later.If, however, wages were already at the normal level, then afterthe rise there is likely to be a reaction in consequence of an influx oflabour from other trades, the extent to which this happens and its rapid-ity depending on the effectiveness of competition.Under the third origi-nal hypothesis, there is again a subdivision of alternatives according asbefore the strike profits were or were not abnormally high in the trade inquestion.If they were, the rise in wages is likely to be maintained, al-though if competition is effective it may have to be shared with othertrades.If profits were not abnormally high, then capital and businesspower may move to other trades; and ultimately the question arises howfar either earnings of management or interest generally will tear reduc-tion without reacting seriously on the demand for labour.The above is of course not intended as an actual solution of thegiven problem, but only as an illustration in bare outline of the mannerin which it may be dealt with by the deductive method.We see how bythe aid of the deductive method an analysis can be given which willenable us to understand our whereabouts, so that if we wish to investi-gate any actual case we may know what are the special facts for which114/John Neville Keynesit is most important to look.There are other modifications of the deductive method in which useis made of mathematical symbols and diagrams.The nature of the aidthat can thus be afforded is discussed in the following chapter.Chapter VIIIOn Symbolical and Diagrammatic Methods inPolitical Economy§l.Mathematical character of political economy. Political economyis declared by Jevons to be essentially mathematical in character; and ifthe term mathematical is used in a broad sense so as to include all enqui-ries that deal with quantitative relations, the propriety of thus describ-ing the science admits of easy demonstration.For political economy isnot concerned simply with questions as to whether events will or willnot happen.It deals with phenomena whose quantitative aspect is offundamental importance, and one of its main objects is to determine thelaws regulating the rise and fall of these phenomena.Its principal theo-rems relate accordingly to the manner in which variations of one quan-tity depende on variation of another quantity.The quantitative, and therefore in a broad sense mathematical, char-acter of economic reasonings might be illustrated by opening almost atrandom any economic work that fairly covers the ground of the science.Thus Mill in his treatment of supply and demand as regulators ofvalue introduces conceptions that are strictly mathematical.He insists,for example, that the idea of a ratio between supply and demand is outof place, what is really involved being an equation.Other instances areafforded by his general treatment of the value of money, and his theoryof international values.In the latter case he employs undisguised math-ematical formulae.147 If further illustrations are wanted, it may be pointedout that all discussions concerning a measure of value, involving as theydo the conception of a unit, are intrinsically mathematical in character.Methods of measuring changes in the purchasing power of money mustalso of necessity be based upon mathematical considerations.The fact that political economy is essentially concerned with quan-titative relations, and therefore involves mathematical notions, needs tobe insisted upon, because to some economists the very idea of a math-ematical treatment of economic problems is not only repugnant, butseems even absurd; and further because the importance of seeking toThe Scope and Method of Political Economy/115make our economic conceptions quantitatively precise has not alwaysreceived due recognition.Something more than the above, however, isneeded in order to establish the position that economic knowledge canbe advanced by the explicit use of geometrical diagrams or mathemati-cal formulae.Simple quantitative.relations can after all be clearly ex-pressed in the forms of ordinary speech; and the need of careful quanti-tative analysis may accordingly be admitted, whilst there remains anunwillingness to have recourse to mathematical symbolism.We are thusstill left with a question of method demanding discussion; and the objectof the present chapter is briefly to enquire what is the nature of theadvantage, if any, to be derived from the use of mathematical formulaeand diagrams in economic reasonings.148§2.The employment of arithmetical examples [ Pobierz caÅ‚ość w formacie PDF ]