326 THE GENERAL THEORY OF EMPLOYMENT bk. vi

tration—the average level of output of to-day is 15 percent, below what it would be with continuous fullemployment, and if 10 per cent, of this outputrepresents net investment and 90 per cent, of it con-sumption—if, furthermore, net investment would haveto rise 50 per cent, in order to secure full employmentwith the existing propensity to consume, so that withfull employment output would rise from 100 to 115,consumption from 90 to 100 and net investment from10 to 15:—then we might aim, perhaps, at so modifyingthe propensity to consume that with full employmentconsumption would rise from 90 to 103 and net invest-ment from 10 to 12.

v

Another school of thought finds the solution of thetrade cycle, not in increasing either consumption orinvestment, but in diminishing the supply of labourseeking employment; i.e. by redistributing the existingvolume of employment without increasing employmentor output.

This seems to me to be a premature policy—muchmore clearly so than the plan of increasing consump-tion. A point comes where every individual weighsthe advantages of increased leisure against increasedincome. But at present the evidence is, I think, strongthat the great majority of individuals would prefer in-creased income to increased leisure; and I see nosufficient reason for compelling those who wouldprefer more income to enjoy more leisure.

VI

It may appear extraordinary that a school of thoughtshould exist which finds the solution for the tradecycle in checking the boom in its early stages by ahigher rate of interest. The only line of argument,along which any justification for this policy can be