CAPITAL EXPANSION, RATE OF GROWTH, AND EMPLOYMENT 147 I am not prepared to say whether we already are or shall soon be faced with a serious difference between s and o, though i doubt that it was an important problem in the past, except perhaps for the short boom years. My own guess is that we shall be more concerned with the disparity between ao and r, that is with the failure of income to grow t the required rate If, however, the difference between o and s becomes serious and in hibits investment, or if the junking process proceeds at a faster rate than is deemed socially desirable, the society will have at its disposal two methods not mutually exclusive:(1)the reduction of the pro- ty to (2)the speeding up of technological pi that the main emphasis will be placed on the latter. This paper attempted to analyze the relation between investment very at. rowth, and employment. The analysis was carried out on a very abstract and simplified level-a procedure which may be justified at the beginning of an investigation, but which must be corrected later In general, there is no such a thing as an absolutely good or bad ssumption: what may be safe in one kind of a problem can become fatal in another. Of the several assumptions made here that regarding depreciation is likely to cause the greatest difficulties, but it is by no means the only one. I hope to develop the whole subject further at a later date The central theme of the paper was the rate of growth, a concept which has been little used in economic theory, and in which I put much faith as an extremely useful instrument of economic analysis. One does not have to be a Keynesian to believe that employment is somehow dependent on national income, and that national income has something to do with investment. But as soon as investment comes in growth cannot be left out, because for an individual firm investment may mean more capital and less labor, but for the economy as a whole (as a general case) investment means more capital and not less labor.If both are to be profitably employed, a growth of income must take place. Washington, D. c