THEORYOFEMPLOYMENT
changesinmoney-wagesandchangesinrealwages。Inthecaseofachangepeculiartoaparticularindustryonewouldexpectthechangeinrealwagestobeinthesamedirectionasthechangeinmoney-wages。Butinthecaseofchangesinthegenerallevelofwages，itwillbefound，Ithink，thatthechangeinrealwagesassociatedwithachangeinmoney-wages，sofarfrombeingusuallyinthesamedirection，isalmostalwaysintheoppositedirection。Whenmoney-wagesarerising，thatistosay，itwillbefoundthatrealwagesarefalling；andwhenmoney-wagesarefalling，realwagesarerising。Thisisbecause，intheshortperiod，fallingmoney-wagesandrisingrealwagesareeach，forindependentreasons，likelytoaccompanydecreasingemployment；labourbeingreadiertoacceptwage-cutswhenemploymentisfallingoff，yetrealwagesinevitablyrisinginthesamecircumstancesonaccountoftheincreasingmarginalreturntoagivencapitalequipmentwhenoutputisdiminished。
If，indeed，itweretruethattheexistingrealwageisaminimumbelowwhichmorelabourthanisnowemployedwillnotbeforthcominginanycircumstances，involuntaryunemployment，apartfromfrictionalunemployment，wouldbenon-existent。Buttosupposethatthisisinvariablythecasewouldbeabsurd。Formorelabourthanisatpresentemployedisusuallyavailableattheexistingmoney-wage，eventhoughthepriceofwage-goodsisrisingand，consequently，therealwagefalling。Ifthisistrue，thewage-goodsequivalentoftheexistingmoney-wageisnotanaccurateindicationofthemarginaldisutilityoflabour，andthesecondpostulatedoesnotholdgood。
Butthereisamorefundamentalobjection。Thesecondpostulateflowsfromtheideathattherealwagesoflabourdependonthewagebargainswhichlabourmakeswiththeentrepreneurs。Itisadmitted，ofcourse，thatthebargainsareactuallymadeintermsofmoney，andeventhattherealwagesacceptabletolabourare[Page11]POSTULATES
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