In section 2.1, Keynes presents two key critiques to the fundamental postulates of the general theory of value and production (see Chapter 2, Section I).
First, he points out that a decrease in real wages (i.e. decrease in purchasing power), for example due to an increase in prices of goods and services, does not necessarily result in a withdrawal of labor from the market, as might be expected in the course of wage bargaining if there is a decrease in money wages. Second, is that labor collectively and individually not equip to negotiate its real wage below a certain point.
- unresolved In this respect, is Keynes arguing that, as far as these bargaining dynamics are concerned, willing availability labor is more consciously correlated with fluctuations in money wages than in real wages?