CH. 16 OBSERVATIONS ON NATURE OF CAPITAL 211

consumption could be turned over to preparing for thefuture consumption. Not that they necessarily wouldbe, even in this case, on a scale equal to the amount ofresources released; since the desired interval of delaymight require a method of production so inconveniently“roundabout” as to have an efficiency well below thecurrent rate of interest, with the result that the favour-able effect on employment of the forward order forconsumption would eventuate not at once but at somesubsequent date, so that the immediate effect of thesaving would still be adverse to employment. In anycase, however, an individual decision to save does not,in actual fact, involve the placing of any specific for-ward order for consumption, but merely the cancellationof a present order. Thus, since the expectation ofconsumption is the only raison d'itre of employment,there should be nothing paradoxical in the conclusionthat a diminished propensity to consume has cet. par. adepressing effect on employment.

The trouble arises, therefore, because the act ofsaving implies, not a substitution for present consump-tion of some specific additional consumption whichrequires for its preparation just as much immediateeconomic activity as would have been required bypresent consumption equal in value to the sum saved, buta desire for “wealth” as such, that is for a potentialityof consuming an unspecified article at an unspecifiedtime. The absurd, though almost universal, idea thatan act of individual saving is just as good for effectivedemand as an act of individual consumption, has beenfostered by the fallacy, much more specious than theconclusion derived from it, that an increased desire tohold wealth, being much the same thing as an increaseddesire to hold investments, must, by increasing thedemand for investments, provide a stimulus to theirproduction; so that current investment is promotedby individual saving to the same extent as presentconsumption is diminished.