ted wealth. This is the main
determining factor in the social and economic structure of our time. It
is clear on our principle that it stands in quite a different position
from that of wealth which is being created from day to day. It can be
defended only on two grounds. One is prescriptive right, and the
difficulty of disturbing the basis of the economic order. This provides
an unanswerable argument against violent and hasty methods, but no
argument at all against a gentle and slow-moving policy of economic
reorganization. The other argument is that inherited wealth serves
several indirect functions. The desire to provide for children and to
found a family is a stimulus to effort. The existence of a leisured
class affords possibilities for the free development of originality, and
a supply of disinterested men and women for the service of the State. I
would suggest once again that the only real test to which the value of
these arguments can be submitted is the empirical test. On the face of
the facts inherited wealth stands on a different footing from acquired
wealth, and Liberal policy is on the right lines in beginning the
discrimination of earned from unearned income. The distinction is
misconceived only so far as income derived from capital or land may
represent the savings of the individual and not his inheritance. The
true distinction is between the inherited and the acquired, and while
the taxation of acquired wealth may operate, so far as it goes, to
diminish the profits, and so far to weaken the motive springs, of
industry, it is by no means self-evident that any increase of taxation
on inherited wealth would necessarily have that effect, or that it would
vitally derange any other social function. It is, again, a matter on
which only experience can decide, but if experience goes to show that
we can impose a given tax on inherited wealth without diminishing the
available supply of capital and without losing any service of value, the
result would be net gain. The State could never be the sole producer,
for in production the personal factor is vital, but there is no limit
set by the necessities of things to the extension of its control of
natural resources, on the one hand, and the accumulated heritage of the
past, on the other.

If Liberal policy has committed itself not only to the discrimination of
earned and unearned incomes but also to a super-tax on large incomes
from whatever source, the ground principle, a