Laws of Production and Laws of Algebra: The Humbug Production Function

Abstract

cizes us for not quantifying the effect of introducing our elasticities into consideration of Parker and Klein's questions (footnote 6). We avoided quantification because the effect was so large that it made Parker and Klein's questions meaningless, not because we wanted to stay at the level of generality adopted by Parker in his discussion of his assumptions.2 In addition, we found that our conclusions allowed us to suggest other implications of our findings. The pattern of slow adjustment to prices on the part of farmers is consistent with an interpretation of the Populist movement that sees the agricultural market out of equilibrium in the early 1890's. We do not wish as Professor Page appears to think to disassociate ourselves from this conclusion, but we did not want to claim it as a complete explanation of Populism either.3 The pattern of productivity change that shows up only dimly in our results is intriguing because it differs from the results of other investigators using other methods. We commented on it in the hope of encouraging further work. Our broader aim, in fact, was to encourage economic historians to use the tools of modern economics and econometrics in the analysis of historical questions. We agree that there is no substitute for accurate data and specification, and we continue to think we got as close to this ideal as we could within our budget constraint. We hope also that the controversy over wheat varieties will not obscure the real advances which can be made by the introduction of explicit estimates of the elasticity of supply of wheat into the discussion of late nineteenth century agriculture. 2 It should be noted also that Parker's awareness of some of the limitations of his assumptions does not mean that he did not use them in his research. His quantitative results came from his assumptions, not his reservations. 3 We said just this in the passage Page cites as well as in our original article. It is hard to see how this could have been misunderstood.

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