Page:The Economics of Unemployment.djvu/42

rated, for it is impossible to continue taking out more consumables than are passed through the productive processes. A nation may let down its productive plant, and stocks of materials or semi-manufactured articles, in order to over-consume for a brief spurt, as we did in the emergency of war; but even this national over-consumption was only rendered possible by the belligerent nations drawing upon the surplus accumulations of the neutral world. The world as a whole would be pulled up very soon in any collective refusal of its inhabitants to make the necessary provision for future production.

There might, indeed, be under-saving, in the sense of a refusal to save enough lo realise the enlargements and improvements of the machinery of production that are required to furnish a larger output of commodities for a higher standard or a growing population.

Such a society might be said to over-spend and under-save, though it would not strictly speaking live beyond its income. Such under-saving on the part of society would mean a retardation or even a paralysis of economic progress.

This, indeed, presumably is what our economists consider would be the natural result of a process of equalisation of incomes. As under this condition the proportion of savings to consumption would be reduced, the growth of capital, and therefore the progress of production would be checked. And this seems true on one assumption, viz. that the total income to be spent or saved is not directly affected in its dimensions by the process of 'equalisation.' Suppose,