104 THE GENERAL THEORY OF EMPLOYMENT BK. III

Several facts emerge with prominence from thistable. Net capital formation was very steady over thequinquennium 1925—1929, with only a 10 per centincrease in the latter part of the upward movement.The deduction for entrepreneurs’ repairs, maintenance,depreciation and depletion remained at a high figureeven at the bottom of the slump. But Mr. Kuznets’method must surely lead to too low an estimate of theannual increase in depreciation, etc.; for he puts thelatter at less than 1½ per cent per annum of the new netcapital formation. Above all, net capital formationsuffered an appalling collapse after 1929, falling in1932 to a figure no less than 95 per cent below theaverage of the quinquennium 1925—1929.

The above is, to some extent, a digression. But itis important to emphasise the magnitude of the de-duction which has to be made from the income of asociety, which already possesses a large stock of capital,before we arrive at the net income which is ordinarilyavailable for consumption. For if we overlook this,we may underestimate the heavy drag on the propensityto consume which exists even in conditions where thepublic is ready to consume a very large proportion ofits net income.

Consumption—to repeat the obvious—is the soleend and object of all economic activity. Opportunitiesfor employment are necessarily limited by the extent ofaggregate demand. Aggregate demand can be derivedonly from present consumption or from present pro-vision for future consumption. The consumption forwhich we can profitably provide in advance cannot bepushed indefinitely into the future. We cannot, as acommunity, provide for future consumption by financialexpedients but only by current physical output. In sofar as our social and business organisation separatesfinancial provision for the future from physical pro-vision for the future so that efforts to secure the former