be plunged in utter chaos. You could not say, "Let all proposals
involving capital expenditure be submitted to a central committee, who
shall compare them with one another in a sort of competitive
examination and, after deciding the number of applications they can
pass on the basis of the volume of resources which they can devote to
the future, award the places to those which head the list." Such a
prospect is a nightmare of officialism and delay. You would be driven
to formulate a simple, intelligible rule or measure, and leave that
rule to be applied by the unfettered judgment of innumerable men to
individual problems, as and when they arose. And for such a rule or
measure, you could not do better than a rate of interest; you would
have to lay it down that only those projects should be approved which
promised a return of 6 per cent, or whatever it might be. Even in
deciding what it should be, the limits of your choice would be
narrowly confined. If, for instance, you fixed on 1 or 2 per cent,
you would probably discover that you had not achieved your object,
that the undertakings for distant returns which passed this test,
still consumed far more resources than you could spare. You would be
compelled then to raise the rate until it had cut these enterprises
down within manageable limits. But, once more, what essentially would
you be doing? You would be using the instrument of the rate of
interest to adjust the demand for and supply of capital, though indeed
the interest might not be paid away as now to private individuals. You
would be reproducing by the method of deliberate trial and error, the
adjustments which occur automatically as things are, in the actual
world. Once again the most perfectly contrived Utopia would be
compelled to pay to the unorganized coöperation of our epoch the
sincerest flattery of imitation.