Page:The Economics of Unemployment.djvu/151

or is effective until great waste and damage have occurred.

For these periodic movements of over-accumulation of capital over-production, congestion of the machinery of industry, stoppages and unemployment, with their slow unloading of excessive stocks, there can be no real remedy except a removal of the surplus elements in large incomes which brought about the disproportion between saving and spending.

The progressive movement in the economic life of the industrial nations is, in effect, though not of clear purpose, largely directed to this end. The absorption of the unearned and unneeded incomes of the rich, partly by the rising wages and standards of living of the workers, partly by the needs of a modern State, tends to bring about that equalisation of incomes which is essential to a natural and right adjustment between the proportions of spending and saving in the aggregate income. This absorption of surplus and the higher rate of consumption it secures do not involve a deficiency of saving or a lack of capital for the enlarged needs of future consumption. The present depressions signify a feeble and wasteful operation of the excessive amount of capital brought into existence. The better distribution of income here envisaged, though involving a reduced proportion of saved income to spent, would not involve a less amount of saving. For the fuller and more regular working of the machinery of industry would produce a real income so much larger than the present that a smaller proportion of saving would yield a quantity of new industrial capital at least as large as hereto-