vernment; there
would have been merely a transfer of buying power from individuals to
the State. The process would have been gradual, there need have been
no acute dislocation, but as the cost of the war increased, that is to
say, as the Government needed more and more goods and services for its
prosecution, the community would gradually have shed one after another
the extravagances on which it spent so many hundreds of millions in
days before the war. As it shed these extravagances the labour
and energy needed to produce them would have been automatically
transferred to the service of the war, or to the production of
necessaries of life. By this simple process of monetary rationing all
the frantic appeals for economy, and most of the complicated, tangled
problems raised by such matters as Food Control or National Service
would have been avoided.

But, it may be contended, this is setting up an ideal so absurdly
too high that you cannot expect any modern nation to rise up to it.
Perhaps this is true, though I am not at all sure that if we had had a
really bold and far-sighted Finance Minister at the beginning of the
war he might not have persuaded the nation to tackle its war problem
on this exalted line. At least it can be claimed that our financial
rulers might have looked into the history of the matter and seen what
our ancestors had done in big wars in this matter of paying for war
costs out of taxation, with the determination to do at least as well
as they did, and perhaps rather better, owing to the overwhelming
scale of modern financial problems. If they had done so they would
have found that both in the Napoleonic and the Crimean wars we paid
for nearly half the cost of the war out of revenue as they went on,
whereas in the present war the proportion that we are paying by
taxation, instead of being 47 per cent., as it was when our sturdy
ancestors fought against Napoleon, is less than 20 per cent.[1]
Why has this been so? Partly, no doubt, owing to the slackness and
cowardice of our politicians, and the apathy of the overworked
officials, who have been too busy with the details of finance to think
the problem out on a large scale. But it is chiefly, I think, because
our system of taxation, though probably the best in the world,
involves so many inequities that it cannot be applied on a really
large scale without producing a discontent which might have had
serious consequences on our conduct of the war.

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