SAVING AND SPENDING [To the Editor o g the SPECTATOR.]
Sin,—Your continued interest in the problem of Saving and Spending prompts me to suggest that you are rather less than fair to Mr. Hobson in summarising his proposals as merely a recommendation to spend more during a depression.
His explanation of cyclic depressions is " a normal tendency to apply to the production of capital-goods a proportion of the aggregate productive power that exceeds the proportion needed, in accordance with existing arts of industry, to supply the consumptive-goods which are purchased and consumed." (The Economics of Unemployment, p. 147.) And this tendency, he argues, follows from the wide disparity of incomes between the rich and poor.
Obviously this tendency is continuously operative, and will not be counterbalanced by a mere effort to spend more during
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