THE OBJECTS OF GOVERNMENTAL SPENDING

[Sidenote: THE STATE’S CLAIM]

Why does the Government take our money? Because government costs money, and cannot be had without it. Taxation is the price that we pay for government and protection. Most of us do not want, or need, to be governed ourselves. Respect for law, or for the duties and customs that law embodies, is so engrained in us by centuries of tradition, that the presence of the policeman on his beat is a fact that never influences our conduct. But if we do not need to be governed ourselves, we very much need other people to be governed and prevented from attacking us or our belongings. Protection of our persons and property, from home and foreign foes, is the first and most important business of government; and the chief reason that it can give if we ask it “Why should we pay taxes?” is this: “Because, if you don’t, you will be in danger of losing everything that you have got.”

Government does so much in these days besides its first elementary task of protecting us from one another and from outward foes, that we are apt to forget that this is its original business. But as the point is very important, as we shall see later, it is well to get it fixed into our heads by reading the plain words in which it is set forth by John Locke. In Chapter I of his _Essay concerning the True Original Extent and End of Civil Government_ he says:

“Political Power then I take to be a Right of making Laws with Penalties of Death, and consequently all less Penalties, for the regulating and preserving of Property, and of employing the Force of the Community in the Execution of such Laws, and in the Defence of the Commonwealth from Foreign Injury, and all this only for the Publick Good.”

In Chapter VIII of the same Essay we find:

“The only Way whereby any one divests himself of his natural Liberty and puts on the Bonds of civil Society, is by agreeing with other men to join and unite into a Community, for their comfortable, safe, and peaceable living amongst one another, in a secure Enjoyment of their Properties, and a greater Security against any that are not of it.”

And in Chapter IX the matter is summed up thus:

“The great and _chief End_ therefore, of Mens uniting into Commonwealths and putting themselves under Government, _is the Preservation of their Property_.”

Locke did not leave the object of government on this merely businesslike foundation. He did not really mean that we only submit to being governed in order that we may grow rich and fat and enjoy our riches without fear of burglars or marauding foes. He says in another passage that the End of Government is the Good of Mankind. This is a more inspiring ideal, but we shall all acknowledge that it cannot be secured unless man’s material wants are satisfied, and that as society is at present constituted, this cannot be done unless property is protected. Some day mankind will perhaps grow into a race of beings who will work for the pleasure of working, and not mind who takes and uses the stuff that they make and grow. There are already many more of such people than old-fashioned economists admit. But in considering present-day problems, we have to take human nature as it is, and nations cannot at present increase their wealth, and so their power to secure the Good of Mankind, unless those who increase it are secured in the enjoyment of it.

Protection of the property of the citizens being thus the original, and still a very important, duty of the State, it follows that the State, in order to carry it out, can make any claims that it pleases on the services and property of the citizens. The State, as Professor Bastable tells us, “is entitled to claim all the services and property of its subjects for the accomplishment of whatever aims it prescribes to itself. When stated in so rigid a form,” he adds, “the proposition is likely to awaken dissent, and yet, from the strictly legal and administrative point of view, it is a commonplace since the time of Austin.”[1] (Austin was a great authority on law, who lived and wrote in the first half of the nineteenth century.) It is true enough, as Professor Bastable suggests, that the average British paterfamilias may be startled into an indignant denial of the great law that the State has a right to take all his work and all his goods. But a few moments’ thought would convince him that the proposition is quite sound in logic, since the State cannot do its business if all the citizens are to be able to decide how much, or how little, they are to give, in work or in goods, to its support; and he would also comfort himself with the reflection that, however logical be this power of the State, it cannot be exercised beyond a certain point. On paper, the State may be able to set us all to work for it, but it cannot make us work hard or well unless we are willing to do so. On paper, the State may be able to take all our property, but if it did, then it would not be worth any one’s while to get property. The citizens would cease to accumulate property, that is, to leave the world richer than they found it. Either the State would have to accumulate on its own account, which it could only do if the citizens were willing to work for it, or it would find that it had come to a standstill.

[Sidenote: TAXPAYERS’ STRIKE]

Professor Bastable’s proposition, though absolutely true as a principle, is thus modified by the very real power of the citizen to refuse to produce either the work or the property that the State has the power to take. This power of the overtaxed citizen to strike effectively against taxation is no fanciful suggestion of what might possibly happen. It has happened. Under the Roman Empire taxation was enormously heavy, for the support of the Army, the Imperial Court, and “the great number of clerks made necessary by the bureaucratic form of government.” It was also extremely oppressive, since the senatorial class, the Army, Professors of Rhetoric, and the Clergy, were largely freed from it, and so the whole burden fell on the curials, that is, owners of twenty-five acres of land, or its equivalent.

“When the curials were bankrupt and could no longer pay the taxes, they attempted in every way to escape from their class. Some of them succeeded in rising into the senatorial ranks; many of them deserted their lands and became slaves, or entered the Army or the Church. The Emperors, trying to prevent this, often seized the curial who had run away and compelled him to take up his old burden again.”[2]

[Sidenote: GOOD TAXATION PAYS]

This fact, of the taxpayers’ power to strike, is very relevant to modern problems of finance, because it may come into play long before there is any question of the State’s taking the whole of our goods. As soon as the pressure of taxation begins to be heavy, the danger has to be ever present in the mind of the statesman who is responsible, that he may, by his present exactions, be preventing the future growth of the country’s wealth, and so making the task of his successors difficult, if not impossible. Taxation that is resented, beyond a certain point, will be evaded or avoided. The tax-gatherer can only work to his own satisfaction if he carries the sense of the taxpayers with him. Hence it is of the utmost importance, not only that our rulers should tax well, but that the citizens should understand about taxation, recognize it as good when it is good, and pay it cheerfully when it is equitable and well distributed.

“All taxes are confiscation,” said Mr. Joseph Hume in the House of Commons in 1833.[3] In the original sense of the word confiscation, which meant “putting into the Treasury,” this is clearly a platitude. But as it now is generally taken to mean an arbitrary appropriation, these words sum up a fallacy about taxation which has to be exorcised and expelled before the fiscal arrangements of any nation can be comfortable either for the taxer or the taxed. In fact, taxation is, or ought to be, the process by which the State takes money from us, in proportion to our ability to pay, to spend on the defense of our property from home or foreign enemies, on the defense of the national honor, if need be, on the increase of the material and other resources of the country, and on the public health.

If this be a true description of taxation, taxation is a process to which we must all submit gladly. All the objects for which the money so taken from us, with one exception, will literally pay us, if they are carried out. That exception is the defense of the national honor, and he would be a craven skinflint who would grudge money well spent on that. Defense of our property clearly pays us. So does the increase of the country’s resources, because it will make the burden of taxation lighter. If our particular income does not increase, but that of others does, and if taxation is taken in proportion to our ability to pay, we shall have to pay less in proportion. Public health pays us because it lessens infectious and contagious disease, and so keeps down our doctors’ bills.

But if this description of taxation be untrue, it is our business to make it true, and this can only be done if everybody gives careful thought to the matter, so that if our rulers make mistakes, there shall be a strong body of well-informed opinion to criticize and correct them; and also so that we may learn that it is not the object of every citizen to pay as little in taxes as possible, because if that spirit is abroad, the fiscal machinery of the country will never run smoothly and well; we have to learn to judge whether taxes are fair from the point of view of the nation as a whole, and when we recognize them as fair, to pay them gladly and readily. In time of war this readiness to pay is produced, sometimes, by patriotic enthusiasm. In the early days of the present war, taxpayers wrote to the British Chancellor of the Exchequer expressing the pleasure with which they paid income tax. If we could be sure that money taken in taxes was taken fairly, and used well for the national benefit, that pleasure ought at all times to be present when we pay it.

It has been said that a nation gets the Government that it deserves, and Public Finance is certainly a department in which the pressure of enlightened public opinion can do much. But we shall never learn to get our Public Finance on a sound and businesslike basis until we understand our own domestic expenditure better. When we recognize the responsibility that is attached to the use of our own money, we shall be able to begin to see that our rulers make good use of the money of the nation. As long as there is a common tendency among the citizens to waste their incomes on fripperies and vulgarities in obedience to fashion and convention, and to invest their savings in wild-cat speculations in the hope of getting wealth without trouble, we need not expect the national finances to be as well husbanded as they might be. The sum of the national wisdom, in finance as in other things, may be a little greater than the aggregate wisdom of all the citizens, but cannot lead it by much.

Going back to our description of what taxation is, or ought to be, we see at once that even if every one were to agree to it as stated, there are several expressions in it about which agreement is not likely to be reached as long as the present framework of society stands. In the first place, the question of ability to pay is full of pitfalls and difficulties which will be discussed in a later chapter. First of all, we have to try to get something like a clear conclusion about the objects on which the State is entitled to spend our money, when it has taken it, and on this there has been, is, and always will be, a good deal of divergence of opinion. As stated above, and with reservations and restrictions to be noted later, I venture to think that, in these days, most taxpayers would give at least a hesitating and guarded consent to the scope of State expenditure. But there was a time when it would have been thought to be much too wide, and many people now will think it much too narrow. The _via media_ is a dull and unromantic path, but it has a certain safety.

[Sidenote: HERBERT SPENCER’S VIEW]

Herbert Spencer may be taken as an extreme example of those who would limit the spending of the State. To him it seemed that the State should spend nothing except on public justice and defense. He was the uncompromising apostle of personal freedom, and he believed that only through it could progress and development, of the individual and of the nation, best be achieved. He had an unconquerable objection to anything like discipline or government, so strong that, when a lad of thirteen, he walked home from Bath to Derby rather than stay at school. He walked forty-eight miles in one day, forty-seven on the second, and twenty-five on the third, without sleep, and with very little food.[4] In his youth he did not even admit that the Government should spend money on external defense. Either he believed that a mercenary army and navy, hired by private subscription, would suffice to keep out enemies, or else he took the extreme pacifist view that an unarmed nation need not fear attack. But, in his later years, he abandoned this view, and admitted national defense as a proper object of government expenditure. He still, however, thought that the Postal Service would have been much more cheaply and efficiently managed if it had been left to private enterprise, which is quite possibly true, though it is hardly likely that postal facilities would have been so well distributed. He “advanced the doctrine that, as we trust the grocer to furnish us with pounds of tea, and the baker to send us loaves of bread, so we might trust Heaton & Sons or some of the other enterprising firms of Birmingham to supply us with sovereigns and shillings at their own risk and profit.”[5] He even contended that sanitation was not a proper object of collective activity, and records with obvious pleasure how the early efforts at drainage, being defective, sometimes produced disease. It need not be said that education was a matter which every citizen should, and could best, provide for himself or his children. He is never tired of laughing at our belief in the power of the State to do anything.

“Conceiving [he says], the State-agency, as though it were something more than a cluster of men (a few clever, many ordinary, and some decidedly stupid), we ascribe to it marvellous powers of doing multitudinous things which men otherwise clustered are unable to do. We petition it to procure for us in some way which we do not doubt it can find, benefits of all orders; and pray it with unfaltering faith to secure us from every fresh evil. Time after time our hopes are balked. The good is not obtained, or something bad comes along with it; the evil is not cured, or some other evil as great or greater is produced.... This emotion which is excited by the forms of governmental power, and makes governmental power possible, is the root of a faith that springs up afresh however often cut down. To see how little the perennial confidence it generates is diminished by perennial disappointment, we need but remind ourselves of a few State performances in the chief State Departments.”[6]

He then proceeds to give several examples of administrative ineptitude, the most tragical and absurd, perhaps, of which was the fact that it took two centuries (1593 to 1795) for the British Admiralty to adopt the use of lemon-juice as a protection for the crews of its warships against scurvy.

“And what [he asks] has been the effect of this amazing perversity of officialism? The mortality from scurvy during this long period had exceeded the mortality by battles, wrecks, and all casualties of sea-life put together!”

Such an example of a waste of gallant lives by the imperviousness of the official mind to new ideas goes a long way towards proving Spencer’s contention that Governments, or some Governments, are not as capable as private individuals or companies of doing anything which can, on other grounds, be left to the latter. And we need not turn back over the pages of ancient history to find such examples of departmental fatuity. During this very war there have been plenty of them in England, though we may hope that loss of the lives of her fighters has not been thus criminally involved.

[Sidenote: THE OTHER SIDE]

But when all this is admitted, there are still several things to be said on the other side of the question. A nation in which governmental action has long been restricted and resented must not complain too loudly if the Government, when it is suddenly told to do things, does them badly. In countries where a trained bureaucracy has long been encouraged to do much, its efforts are likely to compare better with those of private enterprise. The efficiency of the German governmental machine is probably much exaggerated; but any one who travelled on the German State-owned railways had no reason to complain of their comfort or of their punctuality. In those respects they seemed to me, from a certainly very limited experience, to compare well with England’s much-vaunted railway system, which, in some respects, was unquestionably a disgrace to private enterprise. Any one who travelled much on Sundays on the suburban lines of England’s leading railways cannot have failed to marvel at the utter contempt for public convenience with which they conducted their service. They stimulated the public desire to travel by cheap tickets--I am speaking, of course, of days before the war--but made no attempt to provide accommodation for it; a few slow trains, disgracefully unpunctual and more disgracefully overcrowded, were the only means afforded to jaded Londoners who sought for a few hours of fresh air on the day of rest. Why the public submitted to it was a mystery. If the railways had then been in the hands of the Government there would have been a clamorous outcry against mismanagement by jacks-in-office. As it was companies--“with nobody to be kicked, or soul to be damned”--that were at fault, there was never a murmur. In America, that other home of individual enterprise, the unpunctuality of the railroads is often astonishing. I once travelled--it is some years ago--from Pittsburg to New York on Christmas Eve. The locomotive was attacked by a malady called “hot box” and the train was four hours late. It was full of unfortunate holiday-makers who had connections to make in New York, so as to get home in time for the Christmas gathering, but they all seemed to accept it as something in the nature of things, and not a matter that called for protest or complaint.

We had better admit that in this half-baked world of ours, in which progress is only at the beginning of its journey, and man is only just beginning to learn the use of his powers over Nature, not many things are yet very well done either by Governments or by private enterprise, and the only way for them to get done better is by every one of us trying to do his own little job just as well as ever he can. In some countries Governments do things better than anybody else. In others, it is otherwise. In England it is safe to say that Government has not yet distinguished itself as a practical worker. It has done great things in the war, but chiefly with the help of men who came in from outside; and whether the public’s experience of governmental activity during the war will, or will not, encourage it to give Government more to do when the war is over, is a very open question.

[Sidenote: HUXLEY ON SPENCER]

Moreover, even if Herbert Spencer’s view of the ineptitude of governmental action were as completely proved as he believed, there are still some things which have to be done by a public authority, as even he would probably have admitted if he had lived to this day. His notion of private companies competing for the business of draining towns, and only cleansing those neighborhoods in which they could get enough customers to make it worth their while, is now commonly recognized as a fantastic example of overdriving a principle. Huxley, in his great _Essay on Administrative Nihilism_, attacks the Spencerian position in the following well known passage:

“Suppose, however, for the sake of argument, that we accept the proposition that the functions of the State may be properly summed up in the one great negative commandment, ‘Thou shalt not allow any man to interfere with the liberty of any other man’--I am unable to see that the logical consequence is any such restriction of the power of Government as its supporters imply. If my next-door-neighbor chooses to have his drains in such a state as to create a poisonous atmosphere, which I breathe at the risk of typhus and diphtheria, he restricts my just freedom to live just as much as if he went about with a pistol, threatening my life; if he is to be allowed to let his children go unvaccinated, he might as well be allowed to leave strychnine lozenges about in the way of mine; and if he brings them up untaught and untrained to earn their living, he is doing his best to restrict my freedom, by increasing the burden of taxation for the support of gaols and workhouses, which I have to pay.”[7]

Since the days when these two giants threw mountains of arguments at one another, it need not be said that Huxley’s view has prevailed, and more than prevailed. It has wiped out the Spencerian doctrine, and it has been carried to lengths which Huxley himself might well consider absurd if he were still alive. The popular cry in England is now for the Government to do everything. An extraordinary example, as it happens, is chronicled in the paper of this day on which I am writing, Sunday, February 18th, 1917. To-day’s _Observer_ records how--

“at a meeting of the Southend Townsmen’s Association it was suggested that the Minister of Labor should be asked to encourage the production of food by the closing of the churches on Sunday morning, and so enabling a greater amount of labor to be available. The suggestion had reference to the large number of Southend business men and clerks who are away from home all the week, and have only Sunday mornings on which to look after their gardens.”

[Sidenote: THE PREVALENT TENDENCY]

This astonishing paragraph was headed “Church-goers’ Neglected Gardens,” and seems to indicate an extraordinary state of mind prevalent in a suburb inhabited by people who may be taken as average specimens of the dwellers in Greater London. Because people work all through the week, and can only dig in their gardens on Sundays, it is proposed, in order to enable them to do so, to get the Minister of Labor to close the churches. In a land that calls itself free and is engaged in a great battle for freedom, it is really astounding that a body of Southend citizens should have seriously thought (1) that as long as the churches were open, their frequenters had no freedom of choice about staying in their gardens and growing food, and (2) that it was the business of the Government to help them to do so by depriving all the other members of the various congregations, who have all the week to dig in, of their freedom to seek ghostly consolation by attending divine worship.

It is easy to make too much of a wild example of this kind. Southend is not England, and probably the Townsmen’s Association is not Southend. In war-time the babbling busybody gets a chance, in associations and on committees, such as he never enjoyed before. But it will hardly be denied that this is only an extreme example of a tendency that is rife. It is high time that the British public considered this tendency seriously and reckoned its possible effects, if it goes unchecked, on the Government’s spending in the future. It need hardly be pointed out that the spread of governmental activity is bound to increase the cost of government, since everything that the Government does costs money, usually more than it would if it were done by private individuals or bodies managed thereby. It is very evident that the present tendency to leave everything to Government is due partly to the war, because war on its present scale demands something like dictatorship, and when it is necessary for victory that the whole resources of a nation shall be made available for purposes of defense, individual freedom takes a very different place in the scale of importance. So far, there is good reason for this tendency. But it was also very rife before the war, and was even then showing signs of running to extremes. This was natural and inevitable, because it was only a reaction against the extreme _laisser-faire_ or “leave-people-alone” policy, of which Herbert Spencer was perhaps the doughtiest champion.

This policy had been dominant in England in the early part of the nineteenth century. It was well summed up in the report of a Commission appointed by the House of Commons in 1810, quoted in Mr. and Mrs. Webb’s _History of Trade Unionism_, as follows:

“No interference of the legislature with the freedom of trade, or with the perfect liberty of every individual to dispose of his time and of his labor in the way and on the terms which he may judge most conducive to his own interest, can take place without violating general principles of the first importance to the prosperity and happiness of the community.”

[Sidenote: THE THONG AS PRODUCER]

Such was the view that was maintained by the economists who followed Adam Smith and carried much further than he did the revolt that he had led against the excessive interference by Government with trade and with the freedom of individual contract, which had marked the history of the earlier centuries when, for example, justices of the peace fixed wages, or tried to. Supporters of the extreme _laisser-faire_ school based their doctrine on the assumption--so true in an ideal world composed of ideally educated people, so pathetically untrue as things are--that everybody is the best judge of his own interest, and that if every one is left to pursue his own interest, the best interest of the community as a whole will somehow be secured. The practical result of the application of this doctrine, in a community in which employers had been taught that they served the common good by pursuing their own immediate interests, and the employed had often been taught nothing, was that children of five years were sent to work in factories, and in France, according to a report published in 1840 by Dr. Villermé, “the thong used for the punishment of children in the spinners’ trade appears as an instrument of production.”[8] The fact is, that very few of us ever know what is best to do for our interest. Most people go through life mechanically, and without thinking about it, choosing a profession for some quite illogical reason, or being pitchforked into a position without attempting to weigh it against other possibilities. Moreover, we are obliged to make up our minds about the matter, in most cases long before we have got a mind to make up. As for the doctrine that each man by pursuing his own interest helps to secure the common good, its truth is pleasantly illustrated by the millions nowadays earned by sellers of worthless medicines and printed trash, which rot the public stomach, bodily and mental. If the economists of the nineteenth century had foreseen the activities and success of the advertisers of the twentieth, they might have modified their optimism.

But there is no need to linger over the absurdities thought and written by the extremists of the _laisser-faire_ school. Peace with their ashes, for they did a great work in clearing away a mass of rubbish. It was not their fault that thongs were laid in the name of liberty on the backs of bairns who ought to have been playing hopscotch. Liberty is a goddess with many shapes, looking quite different to different observers. Abraham Lincoln observed that--

“with some, the word liberty may mean for each man to do as he pleases with himself and the product of his labor; while with others, the same word may mean for some men to do as they please with other men, and the product of other men’s labor.... The shepherd drives the wolf from the sheep’s throat, for which the sheep thanks the shepherd as his liberator, while the wolf denounces him for the same act, as the destroyer of liberty, especially as the sheep was a black one.”[9]

[Sidenote: ADAM SMITH ON SPENDING]

It has already been noted that the extreme limits imposed on Government activity and consequently on governmental expenditure, by Herbert Spencer and the economists who followed Adam Smith, were an exaggeration of the doctrine laid down by Adam Smith. He took a much more level-headed view of the matter. In his examination (in Chapter I, Book V, of the _Wealth of Nations_) of the expenses of the Sovereign or Commonwealth, he lays stress on his or its duty--

“of erecting and maintaining those public institutions, and those public works which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual, or small number of individuals, and which it therefore cannot be expected that any individual, or small number of individuals, should erect or maintain.”

Thus, in effect, he gives a free hand to the State to spend money on anything that will be advantageous to society, but will not yield a profit.

With regard to education, Adam Smith arrives at conclusions which were diametrically opposed to those of Herbert Spencer. He points out that in cases in which the state of the society does not place--

“the greater part of individuals in such situations as naturally form in them, without any attention of Government, almost all the abilities and virtues which that state requires, or perhaps can admit of,”

then--

“some attention of Government is necessary in order to prevent the almost entire corruption and degeneracy of the great body of the people.”

He goes on to show that, owing to the division of labor--

“the man whose whole life is spent in performing a few simple operations ... has no occasion to exert his understanding.... His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues. But in every improved and civilized society, this is the state into which the laboring poor, that is, the great body of the people, must necessarily fall, unless Government takes some pains to prevent it.”

A little later he shows that--

“the common people ... have little time to spare for education. The parents can scarce afford to maintain them even in infancy. As soon as they are able to work, they must apply themselves to some trade by which they can earn their subsistence. That trade too is generally so simple and uniform as to give little exercise to the understanding; while, at the same time, their labor is both so constant and so severe that it leaves them little leisure and less inclination to apply to, or even think of, anything else.... For a very small expense the public can facilitate, can encourage, and can even impose upon almost the whole body of the people, the necessity of acquiring those most essential parts of education.”

Here we have the Father of Economics, so often appealed to, by those who do not read him, as an out-and-out champion of _laisser-faire_, advocating compulsory education, at the public expense, nearly one hundred years before it was introduced in England.

It is perhaps even more interesting in these war-like days to note that Adam Smith thought that--

“even though the martial spirit of the people were of no use towards the defense of the society, yet to prevent that sort of mental mutilation, deformity and wretchedness, which cowardice necessarily involves in it, from spreading themselves through the great body of the people, would still deserve the most serious attention of Government; in the same manner as it would deserve its most serious attention to prevent a leprosy or any other loathsome and offensive disease, though neither mortal nor dangerous, from spreading itself among them.... The same thing may be said of the gross ignorance and stupidity which, in a civilized society, seems so frequently to benumb the understandings of all the inferior ranks of people. [Only the “inferior” ranks, Doctor?] The more they are instructed, the less liable they are to the delusions of enthusiasm and superstition which, among ignorant nations, frequently occasion the most dreadful disorders.... In free countries where the safety of government depends very much upon the favorable judgment which the people may form of its conduct, it must surely be of the highest importance that they should not be disposed to judge rashly or capriciously concerning it.”

I have dwelt at some length on ancient controversies concerning the limits of State action and consequently of State expenditure, because the question is a very burning one to-day, and if we see what our forbears thought about it, we may be helped to a right decision in our present difficulties. We have seen the extreme view that the State should do nothing but police and defense give way to a tendency--even among those who do not profess to be Socialists and to want the State to take over the whole business of production and distribution--to call on the State to interfere constantly in the private affairs of citizens; and looking back to the doctrine of Adam Smith, we find that he was in favor of State expenditure on education for those who could not afford it, on the cultivation of the martial spirit, on checking disease, and on the enlightenment of those classes which, in his opinion, especially needed it. I think it may fairly be claimed that the formula adopted earlier in this chapter may be taken as representing a safe compromise between the extreme views: that is, that the State should spend our money on the defense of our property from home and foreign enemies, on the defense of the national honor, on the increase of the material resources of the country, and on public health. At first sight, this formula would not appear to include education, old-age pensions, or unemployment insurance. But it would be very easy to show that all these objects of expenditure, in countries in which they are necessary, help the increase of the material resources of the country, to which nothing can be more important than a well-taught community, and a working class with a feeling of security and a knowledge that the State cares for its interests, and is prepared to spend money on its welfare. In fact, all really effective measures of social reform are directly beneficial to the whole community, on the coldest business considerations. Every man and woman who is not fit in mind and body to be self-supporting has to be supported, to a greater or less extent, by his or her neighbors; and so government spending that lessens the number of the unfit, by better care for the minds and bodies of those who are born into conditions which do not give them a fair chance, is a sound investment.