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THE  PROBLEM  OF  THE  UNEMPLOYED

§  g.  The  Right  Place  of  “Money  ”  as  an  Agent
in  Falls  of  Prices.
It  may  be  important  to  ascertain  how  far  scarcity  of
money  may  be  the  cause  which  induces  some  owners  of
demand-power  to  withhold  that  power.  This,  I  think,
is  the  point  where  monetary  influences  act.  If  all  exchange
were  of  commodities  with  commodities  direct,  it  is  clear
there  could  be  no  over-supply  and  that  the  alleged  power
of  supply  to  create  a  corresponding  effective  demand  would
be  always  valid.  The  possibility  of  withholding  Demand
only  arrives  with  the  use  of  some  forms  of  money,  bv
the  ownership  of  which  power  to  demand  may  be  held
in  solution  as  a  lien  upon  the  future.  In  other  words
the  use  of  money  is  a  necessary  condition  to  that  failure
of  demand  to  keep  full  pace  with  the  growth  of  supply
which  is  expressed  in  a  fall  of  prices.  But  no  proof  is
forthcoming  that  there  is  in  fact  anything  which  can  be
rightly  called  “scarcity”  of  money,  or  how  such  “  scarcity  "
increases  the  tendency  of  owners  of  demand-power  to
withhold  that  power.
Money  is  indeed  the  social  instrument  by  which  oversaving ­
  or  under-consumption  becomes  possible.  By  means
of  money  the  refusal  to  consume  may  be  practised  to  an
excess  for  certain  long  periods  of  time.  But  this  excess
is  not  shown  to  vary  with  quantity  of  money  in  a  community. ­

Over-saving  from  the  social  standpoint  is  seen  to  arise
from  the  effort  of  a  number  of  individuals  to  postpone  a
larger  quantity  of  their  power  to  demand  commodities
than  is  socially  useful  in  maintaining  forms  of  capital.
This  refusal  is  quite  consistent  with  the  amplest  supply