ised standard of
consumption. This argument, of course, assumes that ignorance or fraud
have not caused a misdirection of investment. There is no evidence to
indicate that the vast sums invested in 1869-72 in railway enterprise
could have found any safer or more remunerative investment. It is the
overflow of "savings," after all capital economically needed to carry
on the work of production to supply steady current wants has been
secured, that flows into the hands of speculative company-promoters.
Such savings are not diverted from safe and useful forms of
investment, they are "savings" which ought never to have been
attempted, for they have no economic justification in the needs of
commerce, as is proved by results.

Sec. 4. The direct causal connection between the increased productive
power of modern machinery and trade depression clearly emerges from a
comparison of the fluctuations in the several departments of industry
in different industrial countries. As modern machinery and modern
methods of commerce are more highly developed and are applied more
generally, trade fluctuations are deeper and more lasting. A
comparison between more backward countries largely engaged in raising
food and raw materials of manufacture for the great manufacturing
countries is sometimes adduced in support of the contention that
highly-evolved industry is steadier. But though Mr. Giffen is
undoubtedly correct in holding that depressions are often worse in
countries producing raw materials than in manufacturing
countries,[156] this is only true of raw-material producing countries
which produce for export, and which are therefore dependent for their
trade upon fluctuations in demand for commodities in distant markets
whose movements they are least able to calculate or control.
Irregularity of climate, disease, and other natural causes must be a
constant source of fluctuation in the productivity of agriculture. But
those non-manufacturing countries which are little dependent upon
commerce with manufacturing nations, and which are chiefly
self-supporting, will of necessity retain a larger variety of
agriculture and of other primitive industries, and will therefore be
less at the mercy of some climatic or other injury than a country more
specialised in some single crop or other industry. The specialisation
impressed upon a backward country by commerce with advanced industrial
countries, confining it to growing cotton or wheat or sheep or win