Page:The Economics of Unemployment.djvu/78

of saving should be directly proportionate to the rising volume of consumption. Any failure to save as much involves not only less production, but less consumption in the near future. Any attempt to save more than that proportion involves waste of the excess by unemployment, both production and consumption being less than would have been the case had the right proportion of saving to spending been preserved.

An accurate adjustment between production and consumption in a progressive society would not, of course, rule out all trade fluctuations. Considerable failures of world-harvests, affecting important foods and raw materials, might reduce the productivity of industry, by diminishing the supply of these prime products to the manufacturing, transport, and distributive trades, and by lowering the consumption and efficiency of labour. But every rise in the general standard of living, bringing into play more fully the law of substitution, every improvement of communications enlarging the variety of available sources of each supply, every improved provision for the storage and preservation of perishable goods, diminishes the influence upon industry of these natural variations. Though famine in such countries as China and Russia, and the simultaneous failure of the Indian and American cotton crop, might still have some influence in depressing world industry, no considerable depression in the modern world can be attributed to such a cause.

An important contributory cause of some modern depressions has been the excessive application of capital and business enterprise to certain fields of