" COMMON SENSE AND DEPRESSION " [To the Editor of
THE SPECTATOR] SIR,—In an otherwise kindly notice, published in your issue of March r7th, of my book, The Defeat of Poverty, your reviewer charges me with some sins of which, I think, I am hardly guilty. Is it quite fair to say that the " slowing growth of population is brushed aside as irrelevant " when I gave some pages to arguing that " the expanding demands of more acquisitive and fastidious inhabitants of the world of today may, surely, more than compensate for any possible decrease in their numbers "? It is true that I did not mention the " exhaustion of new openings for imperialism " ; but I mentioned something better for trade than imperialism, namely, " opportunities for opening up the East " (if ever we get real peace), which might " call for all the productive power which the industrial nations now command." Again, I am told that the rigidities of price and cost which have followed the humanitarian regulation of industry have never apparently occurred to me. In fact, they were mentioned on pages xr2 to xt5 in a chapter on Britain's Difficulties.
It is very likely true that when I turn to economic theory I am often " pathetically at sea " ; and I share this uncomfort- able position with many others, better qualified than I am to write about it. But your reviewer's example is not very helpful. She says that I deduce from Mr. Keynes's saving and investment theory that " it does not matter how much individuals save, since over-saving is impossible " ; but accord- ing to Mr. Keynes, as expounded by Mrs. Robinson, " for the community as a whole the rate of saving must be equal to the rate of investment " ; and if this is so, since capital expansion is a sure stimulus to consumption and production, the inference that I drew seems to be well founded.
Finally, and omitting (out of consideration, Sir, for your space) other misrepresentations, doubtless quite unintentional, why should I be accused of advocating " straightforward taxation " to pay for social betterment, when I have stated on page 274 my opinion that " the country is already taxed to the limit " and have pointed out on page 259 how much more comfortably expenditure is accepted when it is met by
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