ABSTRACT
The modern corporation has undermined the preconceptions of classical economic theory as effectively as the quantum undermined classical physics at the beginning of the twentieth century. An equally drastic reconstruction of economic theory is due and is, perhaps, in process. For economic theorizing, can distinguish between at least four basic types of nongovernmental production which differ as to who controls production and can imagine economic models, each made up of just one type of production. As long as economics dealt only with a pure atomistic economy, the scope of economic theory could be limited to the market mechanism and to a consideration of the ways in which individual behavior affected and in turn was affected by the market. The term employment theory is relatively new, but classical theory dealt with the problem of under-utilization of resources under the heading of Say’s law and in the equilibrium equations of Walras.
