82

THE  PROBLEM  OF  THE  UNEMPLOYED

capital  unemployed  in  our  manufactures,  if  we  find  them
wastefully  employed  in  our  distributing  industry,  it  can  only
mean  an  undue  diminution  of  consumption,  or,  in  other
words,  an  attempt  to  establish  as  “  savings  ”  a  larger
number  of  forms  of  capital  than  are  economically  required
to  assist  in  maintaining  current  or  prospective  consumption.
These  results  of  over-saving  are  not,  of  course,  made
manifest  at  once.  So  long  as  the  over-saving  is  being
stored  in  new  plant  or  machinery  and  so  long  as  this
new  plant  is  engaged  in  turning  out  increased  supply  of
goods,  there  is  no  reduction  of  employment  and  no  fall
of  general  prices.  It  is  when  the  admitted  glut  of  goods
checks  further  investment  and  over-saving  can  find  no
vent  that  prices  fall,  production  is  slackened  and  unemployment ­
  shows  itself.
The  failure  to  give  proper  recognition  to  the  obvious  fact
that  the  quantity  of  serviceable  forms  of  capital  at  the  several
stages  of  production  is  absolutely  limited  by  the  rates  at
which  consumable  goods  are  drawn  out  of  the  industrial
machine,  arises  from  the  refusal  to  consider  industry  from
the  social  organic  standpoint.  Because  an  individual  or
a  class  of  individuals  can  “save”  without  any  other  limit
than  that  imposed  by  the  necessity  of  living,  it  has  been
wrongly  supposed  that  the  same  rule  holds  good  of  a
whole  community.  This  blind  individualistic  conception
of  industry  was  aided  by  the  recognition  of  the  moral
and  material  value  which  attaches  to  the  exercise  of
effectual  thrift  by  individual  members  of  a  society,  and
which  within  the  limits  imposed  by  the  aggregate  consumption ­
  must  be  recognised  as  necessary  and  beneficial  to
society.  Although  the  famous  dictum  of  Adam  Smith
that  “  the  study  of  his  own  advantage  naturally,  or  rather