Sec.6. Individual and Social Saving.  This conclusion is important:  but there is an obvious misinterpretation against which it will be well to guard.  It is customary for social moralists to preach thrift and saving as a public duty, and to impart to their appeals a special note of urgency in times like the present, when, as the result of the havoc of the war, destitution is widespread over Europe.  Now obviously these advisers do not mean to recommend something which will impoverish the world next year and the year after and the benefit of which will accrue only in a distant future:  it is the immediate urgency of the world’s needs which is rather the substance of their case.  Nor would it be right to conclude that these wise men are the victims of a delusion, and advocate a course, the consequence of which they do not understand.  The explanation of the paradox is simple.  The more the community as a whole saves now, the less in the near future will be the aggregate consumable income of the whole community:  but not of the remainder of the community, exclusive of the savers.  It is the saver who must wait, whose consumption must be postponed to perhaps a distant future; but at no time does his saving result in a smaller income of consumable goods for other people.  The aggregate consumable income of the near future will be diminished, but it may be better distributed, and it may consist of things of a different kind.  For consumers’ goods, we must remember, comprise champagne and motor cars as well as food and clothes; and, if a rich man saves, it may be purely articles of luxury, the production of which will shortly be diminished.  Moreover, if his saving has the effect of transferring purchasing power to impoverished people, like those in Central Europe, it will not be devoted to a distant future; it will very likely be devoted to quite immediate ends.  In other words, it may not result in any “creation of capital”; it may not represent any saving on the part of the community as a whole.  A relatively rich man waits, and a relatively poor man anticipates his income to a corresponding extent; and it is precisely this that is so urgently desirable in a time of widespread poverty and chaos.

This is no matter of hair-splitting, and making plain things obscure.  While it is always better for the rest of us that an individual, who can afford to save, should save rather than spend (though it might be better for us still if we could have his money to spend ourselves) and while this is the more important the greater is the poverty which generally prevails; yet, as a community we cannot save so much, we ought not to save so much, when we are impoverished as when we are prosperous.  It is vital to appreciate this truth, because, as we shall see, by no means all the saving of the world is done by individuals.  There are many forms of “collective saving,” which take place in actual fact; still more which we