CH. 10 THE MARGINAL PROPENSITY TO CONSUME 117

will be ten times the primary employment provided bythe public works themselves, assuming no reductionof investment in other directions. Only in the eventof the community maintaining their consumption un-changed in spite of the increase in employment andhence in real income, will the increase of employmentbe restricted to the primary employment provided bythe public works. If, on the other hand, they seek toconsume the whole of any increment of income, therewill be no point of stability and prices will rise withoutlimit. With normal psychological suppositions, anincrease in employment will only be associated with adecline in consumption if there is at the same time achange in the propensity to consume—as the result,for instance, of propaganda in time of war in favour ofrestricting individual consumption; and it is only in thisevent that the increased employment in investment willbe associated with an unfavourable repercussion on em-ployment in the industries producing for consumption.

This only sums up in a formula what should by nowbe obvious to the reader on general grounds. An in-crement of investment in terms of wage-units cannotoccur unless the public are prepared to increase theirsavings in terms of wage-units. Ordinarily speaking,the public will not do this unless their aggregate in-come in terms of wage-units is increasing. Thus theireffort to consume a part of their increased incomes willstimulate output until the new level (and distribution)of incomes provides a margin of saving sufficient tocorrespond to the increased investment. The multi-plier tells us by how much their employment has to beincreased to yield an increase in real income sufficientto induce them to do the necessary extra saving, andis a function of their psychological propensities .1 Ifsaving is the pill and consumption is the jam, the

1 Though in the more generalised case it is also a function of the physicalconditions of production in the investment and consumption industries re-spectively.