EFFECT  OF  UNDER-CONSUMPTION

95

where  the  demand  is  absolutely  reduced,  I  can  only  reply
that  it  simplifies  the  argument  and  makes  no  real  difference
in  its  validity.  If  we  assumed  the  “saving”  to  be  equally
distributed  among  all  trades,  then  at  the  end  of  the  year
all  trades  would  be  to  a  minor  degree  in  the  same  condition ­
  as  the  cotton  trade  is  according  to  my  illustration.
If  savers  were  mad  enough  to  continue  this  policy,
preferring  the  growing  ownership  of  useless  cotton-mills
to  the  satisfaction  of  consuming  commodities,  the  process
might  continue  indefinitely,  without  reducing  or  affecting
in  any  way  the  aggregate  employment  of  labour  and
capital.  It  would  simply  mean  that  a  number  of  persons
take  their  satisfaction  in  seeing  new  cotton-mills  rising  and
going  to  decay.
But  it  is  conceivable  that  in  the  second  year  of  oversaving, ­
  the  savers  instead  of  continuing  to  pay  people
to  put  up  more  mills  might  employ  people  to  operate  the
excess  of  cotton-mills,  lending  their  money  to  buy  raw
material  and  to  pay  wages.  Cotton  goods  which  ex
hypolhesi  can  find  no  markets  are  thus  accumulated.  If
the  savers  chose  to  take  their  pleasure  in  such  a  way,
they  might  go  on  indefinitely  without  the  aggregate  of
employment  of  capital  or  labour  being  affected.  If  they
continued  this  impolicy  for  a  twelvemonth,  we  should  say
that  whereas  in  the  first  year  they  saved  useless  mills,
in  the  second  year  they  saved  useless  cotton  goods.  In
neither  the  first  nor  the  second  year  is  there  any  net
increase  or  decrease  of  employment  due  to  the  new  policy
of  saving.  In  fact,  assuming  sanity  of  individual  conduct,
affairs  would  work  out  differently.  Admitting  an  attempt
to  work  the  surplus  mills,  the  actual  overproduction  of
goods  could  not  proceed  far.  Let  us  assume  savers  to