348 THE GENERAL THEORY OF EMPLOYMENT bk. vi

weakness of the inducement to invest has been at alltimes the key to the economic problem. To-day theexplanation of the weakness of this inducement maychiefly lie in the extent of existing accumulations;whereas, formerly, risks and hazards of all kinds mayhave played a larger part. But the result is the same.The desire of the individual to augment his personalwealth by abstaining from consumption has usuallybeen stronger than the inducement to the entrepreneurto augment the national wealth by employing labour onthe construction of durable assets.

(4) The mercantilists were under no illusions as tothe nationalistic character of their policies and theirtendency to promote war. It was national advantageand relative strength at which they were admittedlyaiming. 1

We may criticise them for the apparent indifferencewith which they accepted this inevitable consequenceof an international monetary system. But intellectuallytheir realism is much preferable to the confused think-ing of contemporary advocates of an international fixedgold standard and laissez-faire in international lending,who believe that it is precisely these policies which willbest promote peace.

For in an economy subject to money contracts andcustoms more or less fixed over an appreciable periodof time, where the quantity of the domestic circulationand the domestic rate of interest are primarily deter-mined by the balance of payments, as they were inGreat Britain before the war, there is no orthodox meansopen to the authorities for countering unemploymentat home except by struggling for an export surplus and

1 “ Within the state, mercantilism pursued thoroughgoing dynamic ends.But the important thing is that this was bound up with a static conceptionof the total economic resources in the world; for this it was that created thatfundamental disharmony which sustained the endless commercial wars. . . .This was the tragedy of mercantilism. Both the Middle Ages with theiruniversal static ideal and laissez-faire with its universal dynamic idealavoided this consequence” (Heckscher, op, cit. vol. ii. pp. 25, 26).