324 THE GENERAL THEORY OF EMPLOYMENT bk. vi

investment, assuming the existing propensity to con-sume, so great that it would eventually lead to a stateof full investment in the sense that an aggregate grossyield in excess of replacement cost could no longer beexpected on a reasonable calculation from a furtherincrement of durable goods of any type whatever.Moreover, this situation might be reached compara-tively soon—say within twenty-five years or less. Imust not be taken to deny this, because I assert that astate of full investment in the strict sense has never yetoccurred, not even momentarily.

Furthermore, even if we were to suppose that con-temporary booms are apt to be associated with a mom-entary condition of full investment or over-investmentin the strict sense, it would still be absurd to regard ahigher rate of interest as the appropriate remedy. Forin this event the case of those who attribute the diseaseto under-consumption would be wholly established.The remedy would lie in various measures designed toincrease the propensity to consume by the redistributionof incomes or otherwise; so that a given level of em-ployment would require a smaller volume of currentinvestment to support it.

IV

It may be convenient at this point to say a wordabout the important schools of thought which maintain,from various points of view, that the chronic tendencyof contemporary societies to under-employment is tobe traced to under-consumption;—that is to say, tosocial practices and to a distribution of wealth whichresult in a propensity to consume which is unduly low.

In existing conditions—or, at least, in the conditionswhich existed until lately—where the volume of invest-ment is unplanned and uncontrolled, subject to thevagaries of the marginal efficiency of capital as deter-mined by the private judgment of individuals ignorant