CH. 18 THE GENERAL THEORY RE-STATED

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this struggle is likely, as employment increases, to beintensified in each individual case both because thebargaining position of the worker is improved andbecause the diminished marginal utility of his wageand his improved financial margin make him readierto run risks. Yet, all the same, these motives willoperate within limits, and workers will not seek amuch greater money-wage when employment improvesor allow a very great reduction rather than suffer anyunemployment at all.

But here again, whether or not this conclusion isplausible a priori, experience shows that some suchpsychological law must actually hold. For if competi-tion between unemployed workers always led to avery great reduction of the money-wage, there wouldbe a violent instability in the price-level. Moreover,there might be no position of stable equilibrium exceptin conditions consistent with full employment; sincethe wage-unit might have to fall without limit until itreached a point where the effect of the abundance ofmoney in terms of the wage-unit on the rate of interestwas sufficient to restore a level of full employment.At no other point could there be a resting-place . 1

(iv) Our fourth condition, which is a condition notso much of stability as of alternate recession and re-covery, is merely based on the presumption thatcapital-assets are of various ages, wear out with timeand are not all very long-lived; so that if the rate ofinvestment falls below a certain minimum level, it ismerely a question of time (failing large fluctuations inother factors) before the marginal efficiency of capitalrises sufficiently to bring about a recovery of invest-ment above this minimum. And similarly, of course,if investment rises to a higher figure than formerly,it is only a question of time before the marginalefficiency of capital falls sufficiently to bring about

1 The effects of changes in the wage-unit will be considered in detail inChapter 19.