Page:The Economics of Unemployment.djvu/127

commodities. Sometimes it is so applied; but in that case no saving, or creation of new capital goods, takes place. Normally, however, some of the net income paid to producers for productive effort is not expended upon consumable commodities, but upon the purchase of new capital goods (i.e. it is saved and invested). But this does not in the least imply that some of the commodities produced cannot get purchased, because the money which might have bought them has been saved. So far as this saving is a normal, calculable process, it means that part of the productive process will be devoted, not to making consumable goods, but to making more capital goods that will be purchased and owned by the savers.

That income which is saved is spent in buying (i.e. paying people to make) a larger quantity of capital goods, materials, semi-manufactured goods, machines, fuel, etc., with a view to turning out an increased quantity of commodities at some future time.

I hold that the trouble comes from an under-consumption, or an over-saving, an attempt to save and utilise for future production a larger proportion of the aggregate income than can be saved and utilised. This disproportion between saving and spending I attribute to the unequal distribution of income, which leads to a large amount of automatic accumulation and investment of unearned and excessive wealth. The futile attempt of these idle savings to find a remunerative use in the economic system clogs that system and congests it, causing those periodic gluts and stoppages which economists disguise or decorate under the title 'cyclical depressions.'