ABSTRACT
The difference between Mr. Keynes’s new theory of economic equilibrium and the “orthodox” classical scheme is fundamentally a difference in assumptions, or rather in one basic assumption. While the two divergent points of view come to a clash more specifically in the discussion concerning the shape of the supply function for labor, the theoretical issue involved is much more general in its scope. In the present note I shall first of all try to redefine the contested principle in precise terms, then interpret its relevant theoretical implications, and finally make an attempt to examine the arguments which Mr. Keynes raises against the “orthodox” solution of the problem and in favor of his own standpoint. I shall confine myself to the strictly theoretical problems.
