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and improving the public services concerned with their health, education, and other factors of personal efficiency, it will react in increased productivity.

In a word, it converts otherwise waste income into productive energy. This formal argument to prove that surplus unearned income must produce diseases in the economic system, and that the remedy must consist in diverting this surplus into nutriment for productive energy, ought to have been superfluous. But a narrow theory, based upon a false assumption of the economic virtues of unlimited saving, and used as a defence of the privileged classes against the demands of the workers on the one hand, and of the State upon the other, has obtained so strong a hold upon current economic thinking, that this direct and explicit refutation is necessary.

I claim to have established the two following propositions:

(1) That the proper provision against trade depressions and unemployment lies in strengthening the consuming powers of the community, so that effective demand for consumable goods may keep full pace with every increased productivity that arises from improvements in the arts of industry; and (2) that the strengthening of consumption is obtained by a better distribution of the product of industry.

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Controversial experience has, however, taught me that it is not enough to establish propositions by constructive argument, so long as certain deep-rooted implications of an opposing theory remain