immediate pleasure. The Flow so beneficial to all classes would never have been set up without
abstinence.91 It could not continue in its present magnitude but for the continued abstinence of each
one who has a right to dispose of wealth which is in course of production,— make a bonfire of it,
if he can get a momentary pleasure from that extravagance, or by some less simple, though more
familiar increase of unproductive consumption “eat up his capital.”
The consequences of an increase in unproductive consumption may be contemplated by
reversing the consequences of an increase in parsimony. The latter increase forms part of a larger
subject, economic progress. The progressive change in the volume of value and channels of
production cannot be understood until there has been attained what was the object of the preceding
paragraphs,—the clear idea of a steady flow in channels for a time unchanged.92 The study of this
stationary state is perhaps the part of economic science which principally deserves to be described
as theory of Distribution. In these pages it is not attempted to go far beyond the comparatively
narrow round of steady motion in fixed cycles of production and consumption. It must suffice to
indicate three species of progressive alteration in the economic mechanism. There is, first, a uniform
increase in the number of both capitalists and labourers, or, more generally, capital and labour, other
things being the same. This change presents no difficulty: it may be represented by an increase in
the depth of all the channels. Second, the rate at which the breadth of the channels diminishes as one
ascends from the littoral—in other words, the rate of interest—might be diminished. A limiting case
of this species is put by Mill when he supposes unproductive expenditure of capitalists to be “
reduced to its lowest limit.” Conceivably, this change might have no other effect than to reduce the
portions accruing to the capitalists—such as a 1 a ,1— a 2 a '2—to a minimum. The capitalists with new
eagerness bid against each other for the service of the labourers; but, if the latter do not give more
work for higher pay, the consequences might be a new equilibrium in which the same volume of
value is steadily rolled down the same channels of trade, though the portion which flies back to the
heights is a minimum. But, even if the quantity of value continued constant, it is hardly to be
supposed that the quality93 of the commodities which make up the amount would remain unchanged.
And, in fact, an increase of wages would probably be followed by an increase in the number and
efficiency of the wage-earning classes.94 And these results would favour the occurrence of a third
kind of progress which may, however, be considered as arising independently of the others; namely,
91. Compare Adam Smith. “By what a frugal man annually saves he not only affords maintenance
for an additional number of productive hands for that or the ensuing year, but, like the founder of
a workhouse, he establishes, as it were, a perpetual fund for the maintenance of an equal number in
an times to come.” Wealth of Nations, Book II, chap. iii. In our metaphor, talking up a new position
on the heights corresponds to this establishment of a perpetual fund.
92. On the nature of the steady flow with which we are concerned see Marshall Economic Journal,
Vol. VIII, p. 40, and Principles of Economy, sub voce “Stationary State.”
93. Cp. Mill, loc. cit.,—“there would no longer be any demand for luxuries on the part of
capitalists.”
94. Cp, Marshall, Principles, Book IV, ch. xiii.