… is from page 15 of Edwin Cannan’s splendid November 13th, 1931, Sidney Ball Lecture – a lecture titled “Balance of Trade Delusions“:
The easiest and least thankless method of dealing with a very large income is to invest a large proportion of it, and even with moderate incomes the rule is that the bigger they are the larger is the proportion likely to be saved. Redistribute net income in the direction of taking from the rich and giving to the poor, and you are pretty certain to diminish savings.
DBx: Yes. And diminished savings brings about diminished production and improvement of capital goods and services – that is, diminished production of capital goods as well as diminished improvement and maintenance of existing capital goods. Compared to what they would otherwise have, workers have fewer and worse tools and infrastructure with which to work. In turn, diminished production and improvement of capital goods and services ensures that worker pay will be lower than it would have been without such a diminution of savings.