Europe,
it will not be devoted to a distant future; it will very likely be
devoted to quite immediate ends. In other words, it may not result in
any "creation of capital"; it may not represent any saving on the part
of the community as a whole. A relatively rich man waits, and a
relatively poor man _anticipates_ his income to a corresponding
extent; and it is precisely this that is so urgently desirable in a
time of widespread poverty and chaos.

This is no matter of hair-splitting, and making plain things
obscure. While it is always better for the _rest_ of us that an
individual, who can afford to save, should save rather than spend
(though it might be better for us still if we could have his money to
spend ourselves) and while this is the more important the greater is
the poverty which generally prevails; yet, as a community we cannot
save so much, we _ought_ not to save so much, when we are impoverished
as when we are prosperous. It is vital to appreciate this truth,
because, as we shall see, by no means all the saving of the world is
done by individuals. There are many forms of "collective saving,"
which take place in actual fact; still more which we are often urged
to undertake. And it is of practical importance to realize that the
very considerations, which call most urgently for individual thrift,
forbid a great indulgence in such projects. A time of national poverty
is not a time when it is suitable for the State to embark on large
schemes of capital development: we require our resources for more
immediate ends. Faced with such problems, our practical sense may no
doubt suffice to keep us straight; but it is apt to do so at the
expense of a complete inversion of the real issues. If, for instance,
we call for Governmental retrenchment on what we deem extravagant
policies of housing and education, we usually speak as though they
represented the profligacy of a spendthrift as contrasted with the
saving that is indispensable. The truth is rather that these policies
represent a saving, an investment for future purposes, which may
conceivably be greater (this must not be taken as representing my
personal opinion) than the community can properly afford. This is
another instance of what I mean by looking at the problem of capital
the right way up.

Sec.7. _The Necessity of Interest_. It is only now that we are in a
position to appreciate the true functions of a rate of interest, and
the nature of its claims to be