The second cause is the distorted balance which grows up in every boom between different branches of industrial activity.  When trade is good, we invariably build ships, produce machinery, erect factories, make every variety of what are termed “constructional goods” upon a scale which is altogether disproportionate to the scale upon which we are making “consumable goods” like food and clothes.  And that condition of things could not possibly endure for very long.  If it were to continue indefinitely, it would lead in the end to our having, say, half a dozen ships for every ton of wheat or cotton which there was to carry.  You have there a maladjustment, which must be corrected somehow; and the longer the readjustment is postponed, the bigger the readjustment that will ultimately be inevitable.  Now that means, first on the negative side, that, when you are confronted with a trade depression, it is hopeless to try to cure it by looking for some device by which you can give a general stimulus to all forms of industry.  Devices of that nature may be very useful in the later stages of a trade depression, when the necessary readjustments both of the price-level and of the relative outputs of different classes of commodities have already been effected, and when trade remains depressed only because people have not yet plucked up the necessary confidence to start things going again.  But in the early stages of a depression, an indiscriminating stimulus to industry in general will serve only to perpetuate the maladjustments which are the root of the trouble.  It will only put off the evil day, and make it worse when it comes.  The problem is not one of getting everybody back to work on their former jobs.  It is one of getting them set to work on the right jobs; and that is a far more difficult matter.

On the positive side, what this really comes to is, that if you wish to prevent depressions occurring you must prevent booms taking the form they do.  You must prevent prices rising so much, and so many constructional goods being made during the period of active trade; and I am not going to pretend that that is an easy thing to do.  It’s all very well to say that the bankers, through their control of the credit system, might endeavour to guide industry and keep it from straying out of the proper channels.  But the bankers would have to know much more than they do about these matters, and, furthermore, the problem is not merely a national one—­it is a world-wide problem.  It would be of little use to prevent an excess of ships being built here, if that only meant that still more ships were built, say, in the United States.