84 THE GENERAL THEORY OF EMPLOYMENT BK. II

also increases aggregate wealth fails to allow for thepossibility that an act of individual saving may reacton someone else’s savings and hence on someone else’swealth.

The reconciliation of the identity between savingand investment with the apparent “free-will” of theindividual to save what he chooses irrespective of whathe or others may be investing, essentially depends onsaving being, like spending, a two-sided affair. Foralthough the amount of his own saving is unlikely tohave any significant influence on his own income, thereactions of the amount of his consumption on theincomes of others makes it impossible for all individualssimultaneously to save any given sums. Every suchattempt to save more by reducing consumption will soaffect incomes that the attempt necessarily defeats itself.It is, of course, just as impossible for the communityas a whole to save less than the amount of current invest-ment, since the attempt to do so will necessarily raiseincomes to a level at which the sums which individualschoose to save add up to a figure exactly equal to theamount of investment.

The above is closely analogous with the propositionwhich harmonises the liberty, which every individualpossesses, to change, whenever he chooses, the amountof money he holds, with the necessity for the totalamount of money, which individual balances add upto, to be exactly equal to the amount of cash which thebanking system has created. In this latter case theequality is brought about by the fact that the amountof money which people choose to hold is not inde-pendent of their incomes or of the prices of the things(primarily securities), the purchase of which is thenatural alternative to holding money. Thus incomesand such prices necessarily change until the aggregateof the amounts of money which individuals choose tohold at the new level of incomes and prices thus broughtabout has come to equality with the amount of money