Page:The Economics of Unemployment.djvu/41

consumption is simply the final link in a chain of economic processes, each of which should be kept in accurate proportion to the preceding ones, unless stoppage and waste are to occur. This is quite evident if the series of processes comprising the production, sale and consumption, of any single commodity such as bread, or boots, is taken under survey. Having regard to the current condition of the arts of industry, there will be a just balance both between the productive power applied at the respective stages of production on the one hand, and between the quantity of purchasing power applied to buy the bread or boots, and the quantity applied to maintain and improve the productive processes as a whole, upon the other hand. And what applies to any kind of commodity applies to commodities in general. In the use of the current income there must exist, at any time, an economically right proportion between expenditure in withdrawing commodities from the retail shops for consumption, and expenditure in maintaining and enlarging the plant and materials functioning in each stage of production. Or, putting it otherwise, saving and investment for enlargement of production are only economically valid on condition that the enlarged production is accompanied or soon followed by a proportionately enlarged consumption. In the last resort the rate of saving (in this sense) must bear an accurate proportion to rate of spending. This proportion of saving may be exceeded by any person or group, or even (within limits), any nation, but it must be kept by industrial society as a whole. Any attempt on the part of the whole society to live beyond its income is soon frust-