Page:The Economics of Unemployment.djvu/33

For a considerable export trade is indispensable for a people who must buy half of their food and much of their materials abroad. But this signifies that a world-depression, or any other world-problem, cannot finally be solved for any single country on its separate national policy. Cyclical depressions are the gravest of international diseases, and demand an agreed diagnosis and a common line of treatment—industrial, commercial and financial.

The general shrinkage of effective demand which constitutes a cyclical depression implies a failure of consumption to keep pace with production in the industrial world taken as a whole. There may be areas, whole countries, where production is active, as during the present depression. But their very activity is aggravating the depression elsewhere.

A period of depression is marked by under-consumption and under-production. But it is not a matter of indifference through which of these two gates of explanation we enter. The business world, employers and workers alike, are, as we have seen, strongly and variously committed to the belief that at any given time there is a limited market, in the sense of an effective demand insufficient to take all the goods they can produce, on terms enabling production to continue. In other words, the limited market signifies a normal tendency for consumption to fall below production. Every one knows that in ordinary times it is easier to buy than to sell, and that more and more economic activity is given to pushing wares and the arts of salesmanship, while an ever-increasing proportion of the