CH. 8 THE PROPENSITY TO CONSUME: I 105

do not necessarily carry the latter with them, financialprudence will be liable to diminish aggregate demandand thus impair well-being, as there are many examplesto testify. The greater, moreover, the consumption forwhich we have provided in advance, the more difficultit is to find something further to provide for in advance,and the greater our dependence on present consumptionas a source of demand. Yet the larger our incomes,the greater, unfortunately, is the margin between ourincomes and our consumption. So, failing some novelexpedient, there is, as we shall see, no answer to theriddle, except that there must be sufficient unemploy-ment to keep us so poor that our consumption fallsshort of our income by no more than the equivalent ofthe physical provision for future consumption whichit pays to produce to-day.

Or look at the matter thus. Consumption is satis-fied partly by objects produced currently and partly byobjects produced previously, i.e. by disinvestment.To the extent that consumption is satisfied by thelatter, there is a contraction of current demand, sinceto that extent a part of current expenditure fails to findits way back as a part of net income. Contrariwisewhenever an object is produced within the period witha view to satisfying consumption subsequently, an ex-pansion of current demand is set up. Now all capital-investment is destined to result, sooner or later, incapital-disinvestment. Thus the problem of providingthat new capital-investment shall always outrun capital-disinvestment sufficiently to fill the gap between netincome and consumption, presents a problem which isincreasingly difficult as capital increases. New capital-investment can only take place in excess of currentcapital-disinvestment if future expenditure on consump-tion is expected to increase. Each time we secure to-day’sequilibrium by increased investment we are aggravatingthe difficulty of securing equilibrium to-morrow. Adiminished propensity to consume to-day can only be