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A TREATISE ON MONEY

BK. Ill

Meanwhile the savers are individually richer bythe amount of their savings, but the producers of con-sumption-goods, who have sold their current output ata lower price than they would have got if the savingshad not taken place, are poorer by an equal amount.Thus in such circumstances the saving, instead ofresulting in an increase of aggregate wealth, hasmerely involved a double transference—a transferenceof consumption from the savers to the general bodyof consumers, and a transference of wealth to thesavers from the general body of producers, bothtotal consumption and total wealth remaining un-changed. Thus, in Mr. Robertson’s language, thesaving has been “abortive”. There is no increaseof wealth in any shape or form corresponding to theincrease of saving; — the saving has resulted innothing whatever except a change and change-aboutbetween those who consume and between those whoown titles to wealth. The saving has been balancedby the losses of the entrepreneurs who produce con-sumption-goods.

If, on the other hand, investment has taken placepari passu with saving, the equilibrium of consumers’expenditure and producers’ available output willbe maintained at the pre-existing price-level. For ifthe investment takes the form of an increase offixed capital or of working capital unaccompanied byan increase of employment, balanced by an equalvolume of saving, the producers’ output of avail-able goods will be reduced by the act of investmentto the same extent as the consumer’s expenditureon such goods is reduced by the act of saving ; andif the investment takes the form of an increase ofworking capital, accompanied by an increased volumeof employment and an increased remuneration of thefactors of production, balanced by an equal volumeof saving, the reduction of consumers’ expenditureby the savers will be exactly balanced by an equal