ncome to the
state. The financial burden of the war, as the full measure of it dawned
upon our minds, seemed to betoken a universal bankruptcy. But the sequel
is going to show that the finance of the war will prove to be a lesson
in the finance of peace. The new burden has come to stay. No modern
state can hope to survive unless it meets the kind of social claims on
the part of the unemployed, the destitute and the children that have
been described above. And it cannot do this unless it continues to use
the terrific engine of taxation already fashioned in the war.
Undoubtedly the progressive income tax and the tax on profits and
taxation of inheritance must be maintained to an extent never dreamed of
before.

But the peace finance and the war finance will differ in one most
important respect. The war finance was purely destructive. From it came
national security and the triumph of right over wrong. No one would
belittle the worth of the sacrifice. But in the narrower sense of
production, of bread winning, there came nothing; or nothing except a
new power of organization, a new technical skill and a new aspiration
towards better things. But the burden of peace finance directed towards
social efforts will bring a direct return. Every cent that is spent upon
the betterment of the population will come back, sooner or later, as
two.

But all of this deals as yet only with the field of industry and conduct
in which the state rules supreme. Governmental care of the unemployed,
the infant and the infirm, sounds like a chapter in socialism. If the
same regime were extended over the whole area of production, we should
have socialism itself and a mere soap-bubble bursting into fragments.
There is no need, however, to extend the regime of compulsion over the
whole field. The vast mass of human industrial effort must still lie
outside of the immediate control of the government. Every man will still
earn his own living and that of his family as best he can, relying first
and foremost upon his own efforts.

One naturally asks, then, To what extent can social reform penetrate
into the ordinary operation of industry itself? Granted that it is
impossible for the state to take over the whole industry of the nation,
does that mean that the present inequalities must continue? The
framework in which our industrial life is set cannot be readily broken
asunder. But we can to a great extent ease the rigidity of its outlines.
A legislative c