"The Paradox of Saving," Profits, Interest and Investment: and Other Essays on The Theory on Industrial Fluctuations. London: Routledge & Kegan Paul, 1939.

Excerpt:

“The assertion that saving renders the purchasing power of the consumer insufficient to take up the volume of current production, although made more often by members of the lay public van by professional economists, is almost as old as the science of political economy itself. The question of the utility of “unproductive” expenditure was first raised by the Mercantilists, who were thinking chiefly of luxury expenditure. …

But while this idea has found a greater popularity in the quasi-scientific and propagandist literature than perhaps any other economic doctrine  hitherto, fortunately it is not succeeded as yet in depriving saving of its general respectability, and we have yet to learn that any of the numerous monetary measures intended to counteract its supposedly harmful effects have been put into practice. On the contrary, we have recently witnessed the edifying spectacle of a “world saving day,” on which central bank governors and ministers of finance fight with each other in attempting to disseminate the virtue of saving as widely as possible throughout their respective nations. And even though there are those who demand an increase in the currency on the grounds that there is an increased tendency to save, it is hard to believe that the presidents of central banks at any rate will prove very ready listeners.”

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