154. J. M. Keynes to Harrod , 24 July 1928 [a]

[Replies to 152 and 153 , answered by 155 ]

Tilton, Firle, Sussex

24 July 1928

My dear Roy,

Before I go into the points in either of your letters in detail, will you look through the enclosed note written by Frank Ramsey, to whom I showed your article?

I think he shows that a real difficulty arises in the definition of your particular demand curves. [1] His second point, arising out of this, is the same as the point I was trying to make, [2] but put more clearly. The upshot is, I think, that there are certain assumptions from which your conclusion would follow, but that you have not made them explicit, and, when you have, it may be found that they are not sufficiently in accordance with normal facts. Indeed, it seems to me clear that it cannot follow that business can always be transferred with advantage from small firms to large firms merely on the assumptions which you have made. I am not sure that Ramsey has put his point fully enough for it to be quite clear without the aid of conversation. But will you think it over?

He agreed with me in thinking the first part of the article very neat and nice.

Yours ever,

J M Keynes


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