They had observed that an individual increased his wealth by producing as much as he could and saving as much of the proceeds as possible, either in the money he received from his customers or in their credits redeemable in money; they had observed, too, that nations became rich by producing as much as they could, and, in their trade with foreign nations, saving as much of the proceeds as possible in the shape of gold or foreign bills redeemable in gold; and they jumped to the conclusion that as a nation was only the sum total of its individuals, and the world at large the sum total of its nations, that therefore the same law held for the world as a whole as for the separate nations and individuals that composed it. And imagining that in this they had struck on a large and safe generalization, they proceeded to formulate it in their well-known doctrine that 'to produce as much as possible and save as much as possible' of what was produced, was the universal law of the Applied Science of Political Economy, - true alike of the individual, of the nation, and of the world as a single economic whole.

And so indeed it would have been had it been a true law; for the very essence of a scientific law is that it shall hold true universally, whatever be the size, range, or scope of the class of facts that properly fall under it, - whether, as in the present case, it be an individual, a nation, a number of related nations, or the world as a single whole. But if we examine it, we shall find that it was not a true law; - not even of the way in which an individual increases his wealth. Nor is this to be wondered at, for in the original constitution of their science they had illegitimately suppressed, as we have seen, one entire factor in the phenomena which the laws of wealth have to explain, - namely the factor of Consumption. What we have now to do, therefore, is to reintroduce this element of consumption, and see if by its aid we can discover what that true law is, which shall apply equally to an individual, a nation among other nations, or the world as a whole.

In the first place, then, when we say that an individual man increases his wealth by producing as much as he can, and saving as much as he can, it would seem that the formula for the increase of wealth for the individual, at any rate, were quite simple, - namely to 'produce and save.' And so, indeed, it is as a mere shorthand statement for practical purposes, and so long as we do not use it as a scientific law from which logical deductions are to be drawn. But it will be observed that in this shorthand formula, the orthodox Economists have quietly dropped and suppressed as if it did not exist, the most important part of the transaction, - namely the sale of the product. So that the formula, when we want to use it as part of a Science, and not merely as a compendious working formula for everyday life, will have to be amended. Instead of 'produce and save,' it will now have to run ' produce, sell, and save;' or in other words (for the sale involves that someone intends to consume) 'produce, consume, and save.' But this as we have seen is the true law for the increase of wealth of the world as a whole; the only difference being that while in the case of the individual, the consumption has to be done by other people, in the case of the world as a single whole the consumption is done by the same people as those who produce.

Now it is the same with a particular nation in trade relations with other nations. For although the shorthand formula here again is 'produce and save,' the scientific law is, ' produce, consume, and save;' the suppressed factor of consumption, which is as essential to the saving as the production itself, being done by the other nations. So that whether the saving, or increase of wealth, be that of an individual, a nation among other nations, or the world as a whole, in all cases alike it follows one and the same law, which is 'produce, consume, and save,' and so is in harmony with our original symbol of the Wheel of Wealth, where production turns around into consumption, and the saving or increase comes out of the revolutions and alternations of both; and not, as with the orthodox Economists with their symbol of a Stick, where the increase of wealth of an individual, a nation, or a world, is figured as resulting from producing as much as possible, cutting as little as possible off its end, as it were, for consumption, and then carrying the rest forward as the saving; thereby not only confirming them in their delusion that their shorthand formula of 'produce and save' is a true scientific law. and that they may therefore suppress the factor of consumption with impunity, but running them as well, - when their doctrine is pushed to its logical consequences, - into the absurdity that if all the world were to consume as little and save as much as possible, and so fulfil to the letter the apostolic injunction of the orthodox Economists, we should have not a world of civilized men with lands cultivated to the highest point, machinery and the division of labour taking the place of hand labour, and the greatest possible amount of wealth produced, consumed, enjoyed and reproduced; but instead, land lying uncultivated, machinery non-existent, and the world a world as of Red Indians or misers living on roots and herbs, and crouching to warm themselves over the few sticks with which they made themselves a fire!

Summing up this chapter, then, we may say that had the Orthodox Economists not been deceived by appearances into suppressing one of the essential elements of their Science, but had admitted frankly that in all cases whatever an increase of wealth can only come out of a continuous process of production and consumption, there would have been no paradox to perplex the student's mind; but by taking a short cut, and suppressing the middle factor of consumption, they have tried to make an essentially three-legged table stand on two legs alone, - with the result that when left to itself, it upsets and brings down with it all the secondary laws, corollaries, and 'fundamental propositions' which they have first deduced from it and then piled upon it! In thus labouring a point which to the practical business man has only to be stated to be accepted almost as a platitude, my justification must lie in the fact that it is to this suppression of the essential factor of Consumption that all those fallacies of the orthodox Economy are due which have made it as a professed science not only false in one point but, as we shall see more and more as we proceed, false in all.

But before 1 can leave with safety and confidence the paradox which this suppressed factor involves, - in the form of the abstract discussion we have just given, - it will be necessary to exhibit its workings in the concrete, as seen in the way in which savings are made and wealth increased in the actual intercourse of nations in trade relations with each other. And to this we will proceed in our next chapter.