Page:The Economics of Unemployment.djvu/83

consumption, in a word, a quickening of the process of over-production and depression.

Now if the manufacture of credit thus aggravates the maladjustment of production and consumption by raising profits more than wages, it seems to follow that any possible use of credit as a remedy for actual unemployment must turn upon a reversal of this action. If the State is to assist in healing and reducing unemployment by the use of public credit, this credit must be applied to purposes where its expenditure goes as much as possible into wages, as little as possible into profits, rents, interest, or high salaries. It might at first sight seem that this condition would be best fulfilled by a policy of doles to the unemployed. And, indeed, the first effect of treatment by doles, or by contributory funds to which the workers have contributed a smaller proportion than their ordinary wages bear to the rest of the national income, is favourable in that it places a larger share of the total purchasing power in the hands of the working-classes who will apply it in consuming a larger share of the available consumptive goods than they could otherwise. Something would thus be done temporarily towards adjusting the rate of consumption to that of production by letting out more quickly the surplus stocks of finished goods which have been congesting the economic system. But such temporary subsidies to labour cannot make any real contribution towards that permanently right adjustment between production and consumption which would keep both processes functioning at a higher level. The stimulus it can afford to actual current production is slight, and the