CH. 14 THE CLASSICAL THEORY OF INTEREST 185

practical importance. For the economic principle,on which the practical advice of economists has beenalmost invariably based, has assumed, in effect, that,cet. par., a decrease in spending will tend to lower therate of interest and an increase in investment to raiseit. But if what these two quantities determine is, notthe rate of interest, but the aggregate volume of em-ployment, then our outlook on the mechanism of theeconomic system will be profoundly changed. Adecreased readiness to spend will be looked on inquite a different light if, instead of being regarded as afactor which will, cet. par., increase investment, it is seenas a factor which will, cet. par., diminish employment.