The Stability of the System as a Whole

Abstract

The Classical conception of a System of Economic Freedom, which I have been discussing in the preceding chapters, clearly rested on an important assumption, namely that, in the long run at any rate, available resources would be reasonably fully employed. I say in the long run for I do not believe that any competent Classical Economist would have urged that, if there were sudden or large changes in demand, there would be an instant response; whatever may be said by those who have never read them with any attention, the members of that school were not unaware that shifts took time. I say also reasonably fully employed. Again I do not think that any Classical Economist would have expected that, in conditions subject to incessant change of seasons of technique and taste, there would be an unemployed percentage — of zero — or something only very narrowly removed from zero, as has occurred in more than one area in the period of inflationary pressure since the Second World War.