242 THE GENERAL THEORY OF EMPLOYMENT bk. iv

That the world after several millennia of steadyindividual saving, is so poor as it is in accumulatedcapital-assets, is to be explained, in my opinion, neitherby the improvident propensities of mankind, nor evenby the destruction of war, but by the high liquidity-premiums formerly attaching to the ownership of landand now attaching to money. I differ in this fromthe older view as expressed by Marshall with an un-usual dogmatic force in his Principles of Economics ,

p. 581:—

Everyone is aware that the accumulation of wealth is heldin check, and the rate of interest so far sustained, by the prefer-ence which the great mass of humanity have for present overdeferred gratifications, or, in other words, by their unwilling-ness to “wait”.

VI

In my Treatise on Money I defined what purportedto be a unique rate of interest, which I called the naturalrate of interest—namely, the rate of interest which,in the terminology of my Treatise , preserved equalitybetween the rate of saving (as there defined) and therate of investment. I believed this to be a developmentand clarification of Wicksell ’s “natural rate of interest”,which was, according to him, the rate which wouldpreserve the stability of some, not quite clearly specified,price-level.

I had, however, overlooked the fact that in any givensociety there is, on this definition, a different naturalrate of interest for each hypothetical level of employ-ment. And, similarly, for every rate of interest thereis a level of employment for which that rate is the“natural” rate, in the sense that the system will be inequilibrium with that rate of interest and that level ofemployment. Thus it was a mistake to speak of thenatural rate of interest or to suggest that the abovedefinition would yield a unique value for the rate ofinterest irrespective of the level of employment. I had