“ For a poor community will be prone to consume by far the greater part of its output, so that a very modest measure of investment will be sufficient to provide full employment; whereas a wealthy community will have to discover much ampler opportunities for investment if the saving propensities of its wealthier members are to be compatible with the employment of its poorer members. ”
John Maynard Keynes, The General Theory of Employment, Interest and Money (1936). copy citation
| Author | John Maynard Keynes |
|---|---|
| Source | The General Theory of Employment, Interest and Money |
| Topic | investment output |
| Date | 1936 |
| Language | English |
| Reference | |
| Note | |
| Weblink | http://gutenberg.net.au/ebooks03/0300071h/printall.html |
Context
“Moreover the richer the community, the wider will tend to be the gap between its actual and its potential production; and therefore the more obvious and outrageous the defects of the economic system. For a poor community will be prone to consume by far the greater part of its output, so that a very modest measure of investment will be sufficient to provide full employment; whereas a wealthy community will have to discover much ampler opportunities for investment if the saving propensities of its wealthier members are to be compatible with the employment of its poorer members. If in a potentially wealthy community the inducement to invest is weak, then, in spite of its potential wealth, the working of the principle of effective demand will compel it to reduce its actual output, until, in spite of its potential wealth, it has become so poor that its surplus over its consumption is sufficiently diminished to correspond to the weakness of the inducement to invest.”
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