Page:The Economics of Unemployment.djvu/50

investment would then become practicable, profitable, reputable, and desirable for larger and larger sections of the wage earners and would come under the same motivation that has prompted the industrial saving of the middle classes. Able to make sufficient and secure provision for old age, for dividends as a supplement to current earnings, and for the advantageous launching of their children, they would acquire and practise these new habits. Indeed, the steadily growing devotion to various forms of insurance among the British wage earners is already tending in this direction.

At first sight it might seem that this displacement of the easy automatic saving of the rich by the more calculated thrift of the workers would involve a higher social cost in the rate of interest to be paid. But when it is remembered that the supply price of any goods or services is measured by the cost not of the cheapest but of the dearest part of the supply, it will be evident that no rise in rate of interest need occur in consequence of the derivation of a larger share of new capital from working-class savings. For the price paid for savings has always been that needed to evoke not the large saving of the rich but the smaller savings of those who save with greatest sacrifice, the so-called 'marginal saver.' Now as the result of more equal distribution and better security the 'marginal saver' should be quite as well off and more easily induced to save. Therefore, equalisation might tend to lower not to raise the remuneration of saving, i.e. the rate of interest. While, therefore, the process of equalising incomes, by transferring some