CH. 16 OBSERVATIONS ON NATURE OF CAPITAL 219

particular the costs of bringing borrowers and lenderstogether and uncertainty as to the future of the rateof interest, which we have examined above, set a lowerlimit, which in present circumstances may perhaps beas high as 2 or 2^ per cent, on long term. If thisshould prove correct, the awkward possibilities of anincreasing stock of wealth, in conditions where therate of interest can fall no further under laissez-faire ,may soon be realised in actual experience. Moreoverif the minimum level to which it is practicable to bringthe rate of interest is appreciably above zero, there isless likelihood of the aggregate desire to accumulatewealth being satiated before the rate of interest hasreached its minimum level.

The post-war experiences of Great Britain and theUnited States are, indeed, actual examples of how anaccumulation of wealth, so large that its marginalefficiency has fallen more rapidly than the rate of interestcan fall in the face of the prevailing institutional andpsychological factors, can interfere, in conditions mainlyof laissez-faire , with a reasonable level of employmentand with the standard of life which the technicalconditions of production are capable of furnishing.

It follows that of two equal communities, having-the same technique but different stocks of capital, thecommunity with the smaller stock of capital may beable for the time being to enjoy a higher standard oflife than the community with the larger stock; thoughwhen the poorer community has caught up the rich—as, presumably, it eventually will—then both alike willsuffer the fate of Midas. This disturbing conclusiondepends, of course, on the assumption that the pro-pensity to consume and the rate of investment are notdeliberately controlled in the social interest but aremainly left to the influences of laissez-faire.

If—for whatever reason—the rate of interest cannotfall as fast as the marginal efficiency of capital wouldfall with a rate of accumulation corresponding to what