Note 174 — Chapter VIII · ToC

Against this we may set the possibility of a fall in the rate of interest at which manufacturers may be able to borrow capital in order to set up improved machinery. Where an economy can be effected in this direction, the displacement of labour due to the introduction of machinery may not be so large—i.e., it will pay a manufacturer to introduce a new machine which only "saves" a small amount of money, if he can effect the change at a cheap rate of borrowing. (Cf. Marshall, Principles of Economics, 2nd edit., pp. 569, 570.)