Page:The Economics of Unemployment.djvu/43

however, that this equalisation, with its increased pressure of demand for consumables, kept the machinery of production more fully and more quickly working to supply the increased outflow of consumables, this would constitute an actual increase of real income, by reason of the higher productivity of the capital and labour continuously under full employment. Under such circumstances, although a smaller proportion of the larger income might be saved, and a larger proportion consumed, the actual amount of saving might be as large as or even larger than before, and, being more fully utilised as capital, might maintain as high a rate of economic progress as before.

This is the thesis which I here maintain.

The waste of production actually experienced in our normal operation of industry, by slowing down and stoppages, represents an attempt to save and employ as capital a larger proportion of income than can function in supplying the reduced consumption. This is to be attributed to a maldistribution of income, which upsets the true balance between present and future consumption that would obtain in a well-constituted society.

A self-sustaining individual (were such possible) would balance as exactly as he could present labour against future enjoyment. So would any group whose earnings were strictly proportionate to efforts. Such group-economy would apply a certain proportion of its present toil to making more or better tools, so as to lighten future toil and make it more productive of consumables. But there would be no tendency to sacrifice so large a proportion of possible present