Here all the conditions are reversed, and Saving as a safeguard against future contingencies is an absolute necessity both of individuals and of nations. Instead of our economic unit being the world as a single political and economic whole - as in the millennial or ideal stage of civilization - we have now not only a number of nations existing in more or less antagonism to each other, but each nation and each individual in each nation having to face his or its economic future alone, and stand or fall by his or its own economic exertions. Saving, accordingly, is not only an economic but a sociological necessity both of individual and national prudence and self defence; - a necessity for the individual, as a provision for his old age and for his family, or for worldly ambition, social advancement, or the love of power; a necessity for the classes in a nation, as a means of keeping their position and authority in the State, or of attaining to a share of the good things in the world at present denied them; and a necessity for the nation as a whole as a means of preserving its independence, resisting the aggressions of other nations, or aggressing on them in turn.

And accordingly the question which now arises is as to what effect this sociological necessity of Saving, which under existing conditions is a necessity of self-preservation, has on the economic situation. Do these savings increase the aggregate economic wealth of the world (as distinct from that of any particular nation) or not? The orthodox Economists will of course reply at once, certainly they do; for has it not been the very core and essence of their teaching for the last hundred years, that the way in which the wealth of the world is to be increased is by producing as much as it can, and consuming as little, and so saving as much of it as is possible? Is not the increase of capital the increase of wealth, according to them, and is it not one of the fundamental principles of their science that this increase of capital is the result of saving, - and therefore the more of it the better! This is unmistakeably the orthodox teaching, but I will venture to affirm that the precise opposite is the truth, and that saving, however necessary and beneficent from a sociological or political point of view, is from an economic one a pure derogation and loss; and that far from increasing the wealth production of the world, it decreases it; and decreases it moreover precisely in proportion to the extent to which the saving is carried.

And the reason for this must now be obvious from what we have already said. For the first effect of this saving on the part of individuals and of nations is to make each national wheel run more slowly than it otherwise would do. For as the savings of nations against each other can consist only of gold or credit notes redeemable in gold; and as the essence of these credit savings is that they are a postponed consumption, or. in other words, the refraining from consuming to-day as much as you otherwise would do, in order that you may consume at some future time; and further as the floating aggregate of these credits, individual and national, are a perpetual postponement of much of what otherwise would be consumed, enjoyed, and reproduced, each day and every day; - it follows that the fixed capital of each and every nation will, in order to adapt itself to the diminished consumption which the continuous saving involves, throw its products on to the wheel in less quantities; and so the wealth of the world instead of being increased by the saving, as the orthodox Economists contend, will be decreased.

So much so, indeed, that should all the world in a fit of political or individual panic turn misers to-morrow, in the interests of themselves, their families, or the nations to which they belong, no more wealth, it is evident, would be produced and reproduced than these nations of misers would consent to consume; in the same way as if all the world in an access of religious mania or fanaticism were to turn hermits, the cultivation of the land would fall into decay, manufactures, except of the barest necessities, would cease, and the world would live, like the Buddhist monks, on a little rice or bread and herbs. And the consequence would be, that while the wheel of religion might go as merrily round as the rotatory calabash of the Thibetans, the wheel of wealth would slow down almost to the stopping point; and the Orthodox Economy which with its doctrine of universal saving was to-have increased the wealth of the world and to have worked out its economic salvation, would have palpably undone itself, and in the eyes of gods and men have metaphorically cut its own throat; quite as much so, indeed, as if on a cry of fire arising in a theatre all the occupants were to make a rush for the doors at once, and so all alike be crushed and strangled by that very anxiety of each to save himself which at the first blush would seem to be the only means of their common salvation.

Now this is the paradox of Saving on which the orthodox Economists have impaled themselves; for if the aim of an Applied Science of Political Economy is to show us how to increase the stock of material wealth which is continually being produced, consumed, enjoyed, and reproduced, and not how to reduce it to the barest minimum on which human beings will consent to exist; - it is evident, is it not, that there must be something wrong somewhere with their Gospel of Saving which when carried out consistently over the world as a whole, would end in the destruction and non-production of material wealth rather than its conservation and increase. For the doctrines of the orthodox Political Economy with their corollaries, are nothing if not cosmopolitical; and would be renounced even by their own professors were they not believed to hold good for the world as a whole. The truth is, that the 'fallacy and paradox in whose toils the orthodox Economists have entangled themselves, is the same in essence as that into which the celibates of old fell when they imagined that because their doctrine was right and proper for themselves in the midst of a world of gross sensualists outside their doors, it must hold also for the whole world; whereas, of course, had it been carried out inflexibly and universally (and that was what their propaganda aimed at), it would have ended by unpeopling the world altogether! And this is precisely the error into which the orthodox economists have fallen.