ABSTRACT
This chapter describes the close inter-relation of partial equilibrium and perfect competition. To treat the labour market as being amenable to analysis by the apparatus of intersecting, mutually independent, demand and supply curves, was plainly to abuse the device of particular equilibrium. To scale up the method of particular equilibrium as a means of analysing as vast an aspect of things as the labour market is, of course, to be guilty of the 'fallacy of composition'. The internal inconsistency of particular perfectly competitive equilibrium illustrates that it is beside the point to rely unquestioningly on inferences which depend on the exact and formal fulfilment of mathematical conditions by the economic subject matter. That subject matter is in the first place a heuristic process and not a cut-and-dried presentation of established, unquestioned fact. But secondly, it is coarsegrained and essentially imprecise. Alfred Marshall was the economist who made clear by his bold practice that economics is an essentially imprecise subject.
