ch. 17 PROPERTIES OF INTEREST AND MONEY 235

perfectly inelastic). The money-rate of interest, bysetting the pace for all the other commodity-ratesof interest, holds back investment in the productionof these other commodities without being capable ofstimulating investment for the production of money,which by hypothesis cannot be produced. Moreover,owing to the elasticity of demand for liquid cash interms of debts, a small change in the conditions gov-erning this demand may not much alter the money-rateof interest, whilst (apart from official action) it is alsoimpracticable, owing to the inelasticity of the produc-tion of money, for natural forces to bring the money-rate of interest down by affecting the supply side. Inthe case of an ordinary commodity, the inelasticity ofthe demand for liquid stocks of it would enable smallchanges on the demand side to bring its rate of interestup or down with a rush, whilst the elasticity of itssupply would also tend to prevent a high premium onspot over forward delivery. Thus with other com-modities left to themselves, “natural forces,” i.e. theordinary forces of the market, would tend to bring theirrate of interest down until the emergence of full employ-ment had brought about for commodities generally theinelasticity of supply which we have postulated as anormal characteristic of money. Thus in the absenceof money and in the absence—we must, of course, alsosuppose—of any other commodity with the assumedcharacteristics of money, the rates of interest wouldonly reach equilibrium when there is full employment.

Unemployment develops, that is to say, becausepeople want the moon;—men cannot be employed whenthe object of desire (i.e. money) is something whichcannot be produced and the demand for which cannotbe readily choked off. There is no remedy but topersuade the public that green cheese is practically thesame thing and to have a green cheese factory (i.e. acentral bank) under public control.

It is interesting to notice that the characteristic