this machinery,
described as excessive, is set working, some one will have the power
to consume whatever is produced, and since we know that human wants
are insatiable, too much cannot be produced. This crude and
superficial treatment, which found wide currency from the pages of
Adam Smith and McCulloch, has been swallowed by later English
economists, unfortunately without inquiring whether it was consistent
with industrial facts. Since all commerce is ultimately resolvable
into exchange of commodities for commodities, it is obvious that every
increase of production signifies a corresponding increase of power to
consume. Since there exists in every society a host of unsatisfied
wants, it is equally certain that there exists a desire to consume
everything that can be produced. But the fallacy involved in the
supposition that over-supply is impossible consists in assuming that
the power to consume and the desire to consume necessarily co-exist in
the same persons.

In the case of a glut of cotton goods due to an increased application
of machinery, the spinners and manufacturers have the power to consume
what is produced, while a mass of starving, ill-clad beings in Russia,
East London--even in Manchester--may have the desire to consume these
goods. But since these latter are not owners of anything which the
spinners and manufacturers wish to consume or to possess, the exchange
of commodities for commodities cannot take place. But, it will be
said, if the Lancashire producers desire to consume anything at all,
those who produce such articles of desire will have the power, and
possibly the desire, to consume more cotton goods, or at any rate the
desire to consume something produced by other people who will have
both power and desire to consume cotton goods. Thus, it will be said,
the roundabout exchange of commodities for commodities must be brought
about. And this answer is valid, on the assumption that the Lancashire
producers desire to consume an equivalent of the goods they produce.
But let us suppose they do not desire to do so. The reply that since
human wants are insatiable every one with power to consume must have
desire to consume, is inadequate. In order to be operative in the
steady maintenance of industry the desire to consume must be a desire
to consume _now_, to consume continuously, and to consume to an extent
corresponding with the power to consume.

Let us take the Lancashire trade as a test case. Eviden