ABSTRACT
In earlier times, before the 1930s collapse, it was assumed that market forces would keep the economy at its natural full-employment level, at least over the long run. Short-run deviations were temporary and automatically corrected, without any need for government intervention. Prices, of course, were seen to be determined in competitive factor markets governing labor and capital as well as in competitive goods markets. The distribution of the given total output is therefore determined by relative factor prices and their “marginal productivity,” or their successive contributions to total output. Whereas classical supply-siders emphasize their classical roots, Ture attributes the conceptual origin of supply-side economics to “the neoclassical theoretical traditions.” Monetarist, or neoclassical supply-siders, believe in the inherent stability of the market system, if not tampered with. The incentive, or work-effect, model of taxation is simple in its complexity. Work is onerous. Given a choice people would rather not.
