It will better illustrate the ideas of this treatise if, instead of applying them to hypothetical cases, we consider very briefly, in their light, certain well-known episodes in the history of prices.

It has been usual to think of the accumulated wealth of the world as having been painfully built up out of that voluntary abstinence of individuals from the immediate enjoyment of consumption which we call thrift. But it should be obvious that mere abstinence is not enough by itself to build cities or drain fens. The abstinence of individuals need not increase accumulated wealth; it may serve instead to increase the current consumption of other individuals. Thus the thrift of a man may lead either to an increase of capital wealth or to consumers getting better value for their money. There is no telling which, until we have examined another economic factor.

Namely, enterprise. It is enterprise which builds and improves the world's possessions. Now, just as the fruits of thrift may go to provide either capital accumulation or an enhanced value of money income for the consumer, so the outgoings of enterprise may be found either out of thrift or at the expense of the consumption of the average consumer. Worse still, not only may thrift exist without enterprise, but as soon as thrift gets ahead of enterprise, it positively discourages the recovery of enterprise and sets up a vicious circle by its adverse effect on profits. If enterprise is afoot, wealth accumulates whatever may be happening to thrift; and if enterprise is asleep, wealth decays whatever thrift may be doing.