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goods or of consumption-goods. The t im e occupied inbuilding a house may be no longer than the time occu-pied between ploughing the wheat-fields and eating aloaf of bread raised therefrom. That is to say, the twoprocesses employ the same amount of working capital,and it is only when they emerge from the process ofproduction in a finished form that the first adds to thevolume of net investment and therefore needs an actof saving to balance it. Thus when the collectivedecisions of the entrepreneurs are of such a characterthat they will result in investment running ahead ofsaving at some later date, the results will not beapparent until this later date is actually reached,when there will have been time for many reactionsto have been set up which cannot be immediatelyreversed.

The business of saving is essentially a steady pro-cess. If there are disturbances in the economic world,these by affecting prosperity may react on the rateof saving. But a disturbance will seldom or neverbe initiated by a sudden change in the proportion ofcurrent income which is being saved. Investment infixed capital, on the other hand, has been accustomedto proceed irregularly and by fits and starts. Weshall examine in Book VI. the nature and extent offluctuations of investment. It is sufficient for ourimmediate argument to claim the support of commonknowledge and experience for the conclusion that thedevelopment of disequilibria between the rates ofsaving and of investment under the existing economicsystem is nothing to wonder at.

Many writers on the Credit Cycle have emphasisedthe irregularity of the rate of investment in fixedcapital as being the major cause of disturbance . 1 Ifwe have in mind initiating causes this is probablytrue. But the most characteristic secondary phase ofa Credit Cycle is due to the growth of investment in

, 1 See Vol. ii., Chap. 27.