128 THE GENERAL THEORY OF EMPLOYMENT BK. III

than I should have expected. If single years are takenin isolation, the results look rather wild. But if theyare grouped in pairs, the multiplier seems to have beenless than 3 and probably fairly stable in the neighbour-hood of 2.5. This suggests a marginal propensity toconsume not exceeding 60 to 70 per cent.—a figurequite plausible for the boom, but surprisingly, and, inmy judgment, improbably low for the slump. It ispossible, however, that the extreme financial con-servatism of corporate finance in the United States,even during the slump, may account for it. In otherwords, if, when investment is falling heavily through afailure to undertake repairs and replacements, financialprovision is made, nevertheless, in respect of such wast-age, the effect is to prevent the rise in the marginal pro-pensity to consume which would have occurred other-wise. I suspect that this factor may have played asignificant part in aggravating the degree of the recentslump in the United States. On the other hand, it ispossible that the statistics somewhat overstate the de-cline in investment, which is alleged to have fallen offby more than 75 per cent, in 1932 compared with 1929,whilst net “capital formation” declined by more than 95per cent.;—a moderate change in these estimates beingcapable of making a substantial difference to the multi-plier.

VI

When involuntary unemployment exists, the mar-ginal disutility of labour is necessarily less than theutility of the marginal product. Indeed it may bemuch less. For a man who has been long unem-ployed some measure of labour, instead of involvingdisutility, may have a positive utility. If this isaccepted, the above reasoning shows how “wasteful”loan expenditure 1 may nevertheless enrich the com-

1 It is often convenient to use the term “loan expenditure” to includeboth public investment financed by borrowing from individuals and also