80 THE GENERAL THEORY OF EMPLOYMENT BK. II

changes in the amounts saved are no more “forcedsavings” than any other changes in the amounts saveddue to a change in circumstances; and there is nomeans of distinguishing between one case and another,unless we specify the amount saved in certain givenconditions as our norm or standard. Moreover, aswe shall see, the amount of the change in aggregatesaving which results from a given change in the quantityof money is highly variable and depends on many otherfactors.

Thus “forced saving” has no meaning until wehave specified some standard rate of saving. If weselect (as might be reasonable) the rate of saving whichcorresponds to an established state of full employment,the above definition would become: “Forced savingis the excess of actual saving over what would be savedif there were full employment in a position of long-period equilibrium”. This definition would make goodsense, but a sense in which a forced excess of savingwould be a very rare and a very unstable phenomenon,and a forced deficiency of saving the usual state of affairs.

Professor Hayek’s interesting “Note on the De-velopment of the Doctrine of Forced Saving ”1 showsthat this was in fact the original meaning of the term.“Forced saving” or “forced frugality” was, in thefirst instance, a conception of Bentham’s; and Benthamexpressly stated that he had in mind the consequencesof an increase in the quantity of money (relatively tothe quantity of things vendible for money) in circum-stances of “all hands being employed and employed inthe most advantageous manner ”.2 In such circum-stances, Bentham points out, real income cannot beincreased, and, consequently, additional investment,taking place as a result of the transition, involvesforced frugality “at the expense of national comfortand national justice”. All the nineteenth-century

1 Quarterly Journal of Economics, Nov. 1932, p. 123.

2 Loc. cit. p. 125.