252 THE GENERAL THEORY OF EMPLOYMENT bk. iv

employment had been reached; while a decrease ofinvestment would set moving a cumulative decreaseof effective demand until no one at all was employed.Yet experience shows that we are generally in an inter-mediate position. It is not impossible that there maybe a range within which instability does in fact prevail.But, if so, it is probably a narrow one, outside of whichin either direction our psychological law must un-questionably hold good. Furthermore, it is also evidentthat the multiplier, though exceeding unity, is not, innormal circumstances, enormously large. For, if itwere, a given change in the rate of investment wouldinvolve a great change (limited only by full or zeroemployment) in the rate of consumption.

(ii) Whilst our first condition provides that amoderate change in the rate of investment will not in-volve an indefinitely great change in the demand forconsumption-goods our second condition provides thata moderate change in the prospective yield of capital-assets or in the rate of interest will not involve anindefinitely great change in the rate of investment.This is likely to be the case owing to the increasing costof producing a greatly enlarged output from the existingequipment. If, indeed, we start from a position wherethere are very large surplus resources for the productionof capital-assets, there may be considerable instabilitywithin a certain range; but this will cease to hold goodas soon as the surplus is being largely utilised. More-over, this condition sets a limit to the instability result-ing from rapid changes in the prospective yield ofcapital-assets due to sharp fluctuations in businesspsychology or to epoch-making inventions—thoughmore, perhaps, in the upward than in the downwarddirection.

(iii) Our third condition accords with our experi-ence of human nature. For although the struggle formoney-wages is, as we have pointed out above, essenti-ally a struggle to maintain a high relative wage,