204 THE GENERAL THEORY OF EMPLOYMENT bk. IV

is increasing faster than M, the rate of interest willrise, and vice versa. But it may fluctuate for decadesabout a level which is chronically too high for fullemployment;—particularly if it is the prevailingopinion that the rate of interest is self-adjusting, sothat the level established by convention is thought tobe rooted in objective grounds much stronger than con-vention, the failure of employment to attain an optimumlevel being in no way associated, in the minds eitherof the public or of authority, with the prevalence ofan inappropriate range of rates of interest.

The difficulties in the way of maintaining effectivedemand at a level high enough to provide full employ-ment, which ensue from the association of a conven-tional and fairly stable long-term rate of interest with afickle and highly unstable marginal efficiency of capital,should be, by now, obvious to the reader.

Such comfort as we can fairly take from more en-couraging reflections must be drawn from the hopethat, precisely because the convention is not rooted insecure knowledge, it will not be always unduly resistantto a modest measure of persistence and consistency ofpurpose by the monetary authority. Public opinioncan be fairly rapidly accustomed to a modest fall in therate of interest and the conventional expectation of thefuture may be modified accordingly; thus preparingthe way for a further movement—up to a point. Thefall in the long-term rate of interest in Great Britain after her departure from the gold standard provides aninteresting example of this;—the major movementswere effected by a series of discontinuous jumps, as theliquidity function of the public, having become accus-tomed to each successive reduction, became ready torespond to some new incentive in the news or in thepolicy of the authorities.