chapter  3
16 Pages

THE BALANCE OF SPENDING AND SAVING

Though Sir W. Beveridge does not go so far as Mr. Keynes in his defence of inequalitY,1 he feels the same concern for saving under a more equal distribution. H If i11comes were so far equalised that all 5aving meant sacrifice of a keenly desired present good for a future one, it is extremely 'likely that no sufficient provision for new capital would be made at all." I And he adds, H There is, indeed, no probability of determining a priori how the national income can best be allocated between immediate consumption and investment in 'the means of f~ture production. In other words, there is no criterioll for saying beforehand what is over-saving and what is not." Though this last statement is true, it is not to the point. For though over-saving cannot with certainty be predicted, it can be ,detected when it has taken place, and its detective is trade depression. As for the fear of undersaving, it may, indeed, seem to be warranted by experience of the use by the manual workers of sudden increase of pay. But such increases coming as windfalls with no security of permanence are necessarily prone to abuse. In every grade of society 'lightly got' is lightly spent. The very

conserv8.ti~m of standards of con~umption, to which I have alluded, implie5 time for the wholesome assimilation of an increasing income. Working-class psychology is not opposed to saving from any absolute refusal to recognise and provide against future wants. The proportion of income which they save at present. is small. for quite intelligible reasons.