far exceeded the accepted measurements of 'unemployment.' Under the stimulus of high consumption the system showed hitherto undisclosed powers of productivity. War production involved, indeed, an excessive and often injurious strain upon the human factor; and war-consumption is the worst of all consumptions, destroying as it does the potential instruments of future production. But so manifest was the stimulation of production under the spur of extravagent consumption, as to evoke the thought that a higher normal range of consumption than actually prevails might maintain a higher normal level of production, thus averting the waste of cyclical depressions. If, say, consumption could be maintained at three-fourths of the high war standard, and could be applied productively to enhance the future efficiency of the human instrument, instead of being applied destructively, it would seem that trade fluctuations might disappear, by a policy which would not merely avert unemployment (outside the minor requirements of economic elasticity), but would furnish the economic conditions for a continually increasing productivity, with a corresponding rise in the general standards of consumption.
This is the thesis I propose to establish in these chapters. For convenience of readers, I will reduce it to a series of dogmatic propositions.
Full regular employment of the factors of production demands the maintenance of a proper proportion between the production of consumable commodities and that of capital goods, that proportion varying, of course, with changes in methods of production. In other
