162 THE GENERAL THEORY OF EMPLOYMENTBK. IV

only pretends to itself to be mainly actuated by thestatements in its own prospectus, however candid andsincere. Only a little more than an expedition to theSouth Pole, is it based on an exact calculation of benefitsto come. Thus if the animal spirits are dimmed and thespontaneous optimism falters, leaving us to depend onnothing but a mathematical expectation, enterprise willfade and die;—though fears of loss may have a basisno more reasonable than hopes of profit had before.

It is safe to say that enterprise which depends onhopes stretching into the future benefits the communityas a whole. But individual initiative will only beadequate when reasonable calculation is supplementedand supported by animal spirits, so that the thought ofultimate loss which often overtakes pioneers, as experi-ence undoubtedly tells us and them, is put aside as ahealthy man puts aside the expectation of death.

This means, unfortunately, not only that slumpsand depressions are exaggerated in degree, but thateconomic prosperity is excessively dependent on apolitical and social atmosphere which is congenial to theaverage business man. If the fear of a Labour Govern-ment or a New Deal depresses enterprise, this need notbe the result either of a reasonable calculation or of aplot with political intent;—it is the mere consequenceof upsetting the delicate balance of spontaneousoptimism. In estimating the prospects of investment,we must have regard, therefore, to the nerves andhysteria and even the digestions and reactions to theweather of those upon whose spontaneous activity itlargely depends.

We should not conclude from this that everythingdepends on waves of irrational psychology. On thecontrary, the state of long-term expectation is oftensteady, and, even when it is not, the other factors exerttheir compensating effects. We are merely remindingourselves that human decisions affecting the future,whether personal or political or economic, cannot