SAVING AND INCREASED EMPLOYMENT 75
true, the “ saving ” which employs labour to build a factory
and stock it with machinery will cause as much employment
as the same amount of spending, though not more
employment, as J. S. Mill sought to maintain. Moreover,
in the one case, when the money is “spent” there is
nothing to show for it, in the other case there is a factory
and machinery. But when our theoretic friend goes on
to assume that this factory can be profitably worked, and
that the work it affords signifies a net increase of employment
both of labour and capital, he jumps to a conclusion
which is quite unwarranted. It can only be
profitably worked on one of two suppositions. It may by
successful competition obtain the orders which would have
gone to another factory, ousting from employment the
capital and labour there engaged. In this case it is clear
that no general increase of employment has taken place.
An individual has made good his “saving,” but has done
so by negativing the previous “ saving ” of some one else ;
the productive power of the community is increased, but
no more actual production than before is brought about.
The other supposition is that the demand for the class
of commodities which the factory makes will be greater
in the future, and that more capital and labour can
therefore be employed in the trade. So far as this
supposition is valid, the “saving” is socially useful, and,
indeed, necessary; but it should be plainly recognised that
the dependence of capital and labour for employment
upon a rising standard of consumption places an absolute
limit at any given time upon socially useful saving.
It is therefore not true that the existence of a general
desire for increased consumption is any sufficient guarantee
that too much saving will not take place. Even if it be
