288 THE GENERAL THEORY OF EMPLOYMENT bk. v

However long the notice given to entrepreneurs ofa prospective change in demand, it is not possible forthe initial elasticity of employment, in response to agiven increase of investment, to be as great as itseventual equilibrium value, unless there are surplusstocks and surplus capacity at every stage of production.On the other hand, the depletion of the surplus stockswill have an offsetting effect on the amount by whichinvestment increases. If we suppose that there areinitially some surpluses at every point, the initial elas-ticity of employment may approximate to unity; thenafter the stocks have been absorbed, but before an in-creased supply is coming forward at an adequate ratefrom the earlier stages of production, the elasticity willfall away; rising again towards unity as the new posi-tion of equilibrium is approached. This is subject,however, to some qualification in so far as there arerent factors which absorb more expenditure as employ-ment increases, or if the rate of interest increases. Forthese reasons perfect stability of prices is impossiblein an economy subject to change—unless, indeed, thereis some peculiar mechanism which ensures temporaryfluctuations of just the right degree in the propensityto consume. But price-instability arising in this waydoes not lead to the kind of profit stimulus which isliable to bring into existence excess capacity. For thewindfall gain will wholly accrue to those entrepreneurswho happen to possess products at a relatively advancedstage of production, and there is nothing which theentrepreneur, who does not possess specialised re-sources of the right kind, can do to attract this gain tohimself. Thus the inevitable price-instability due tochange cannot affect the actions of entrepreneurs, butmerely directs a de facto windfall of wealth into the lapsof the lucky ones (mutatis mutandis when the supposedchange is in the other direction). This fact has, Ithink, been overlooked in some contemporary discus-sions of a practical policy aimed at stabilising prices.