378 THE GENERAL THEORY OF EMPLOYMENT bk. vi

main to individual initiative, there are wide fields ofactivity which are unaffected. The State will have toexercise a guiding influence on the propensity to con-sume partly through its scheme of taxation, partly byfixing the rate of interest, and partly, perhaps, in otherways. Furthermore, it seems unlikely that the influenceof banking policy on the rate of interest will be sufficientby itself to determine an optimum rate of investment.I conceive, therefore, that a somewhat comprehensivesocialisation of investment will prove the only meansof securing an approximation to full employment;though this need not exclude all manner of com-promises and of devices by which public authority willco-operate with private initiative. But beyond this noobvious case is made out for a system of State Socialism which would embrace most of the economic life of thecommunity. It is not the ownership of the instrumentsof production which it is important for the State toassume. If the State is able to determine the aggregateamount of resources devoted to augmenting the instru-ments and the basic rate of reward to those who ownthem, it will have accomplished all that is necessary.Moreover, the necessary measures of socialisation canbe introduced gradually and without a break in thegeneral traditions of society.

Our criticism of the accepted classical theory ofeconomics has consisted not so much in finding logicalflaws in its analysis as in pointing out that its tacitassumptions are seldom or never satisfied, with theresult that it cannot solve the economic problems ofthe actual world. But if our central controls succeedin establishing an aggregate volume of output corre-sponding to full employment as nearly as is practicable,the classical theory comes into its own again from thispoint onwards. If we suppose the volume of outputto be given, i.e. to be determined by forces outside theclassical scheme of thought, then there is no objectionto be raised against the classical analysis of the manner