Page:The Economics of Unemployment.djvu/38

together with the labour and business ability that could operate them. They simply represent a surplus or excess of former savings, which cannot get used without delay and waste for the productive end for which they were designed.

I am aware that long before this many readers will be bursting with impatience, because they think I am ignoring what seems to them other and truer explanations of depression, resting upon the play of psychological-financial forces. Now, without denying the important part taken by these forces in exaggerating the fluctuations of concrete industry and commerce, I propose to show that they are secondary and not primary causes, and have no initiatory and independent influence. Having this intention, I must first complete the chain of reasoning by which I trace the under-production and under-consumption, which are the chief factors of a depression, to the normal tendency to save a larger proportion of income than can effectively and continuously function as capital.

I have referred to a natural conservatism in the arts of consumption in part explanation of the failure of consumption to keep full pace with the more progressive arts of production. But this natural tendency is strongly reinforced by inequalities in the distribution of income, which place a larger proportion of the aggregate incomes in the possession of comparatively small classes, who, after satisfying all their economic desires, have large surpluses for automatic saving and investment. The great bulk of the saving, normally applied to capital purposes in this and other industrially