CH. 24

CONCLUDING NOTES

379

in which private self-interest will determine what inparticular is produced, in what proportions the factorsof production will be combined to produce it, and howthe value of the final product will be distributed be-tween them. Again, if we have dealt otherwise withthe problem of thrift, there is no objection to beraised against the modern classical theory as to thedegree of consilience between private and public advan-tage in conditions of perfect and imperfect competitionrespectively. Thus, apart from the necessity of centralcontrols to bring about an adjustment between thepropensity to consume and the inducement to invest,there is no more reason to socialise economic life thanthere was before.

To put the point concretely, I see no reason tosuppose that the existing system seriously misemploysthe factors of production which are in use. There are,of course, errors of foresight; but these would not beavoided by centralising decisions. When 9,000,000men are employed out of 10,000,000 willing and ableto work, there is no evidence that the labour of these9,000,000 men is misdirected. The complaint againstthe present system is not that these 9,000,000 menought to be employed on different tasks, but that tasksshould be available for the remaining 1,000,000 men.It is in determining the volume, not the direction, ofactual employment that the existing system has brokendown.

Thus I agree with Gesell that the result of filling inthe gaps in the classical theory is not to dispose of the“Manchester System”, but to indicate the nature of theenvironment which the free play of economic forcesrequires if it is to realise the full potentialities of pro-duction. The central controls necessary to ensure fullemployment will, of course, involve a large extensionof the traditional functions of government. Further-more, the modern classical theory has itself calledattention to various conditions in which the free play of