probably have raised a storm of difficulty. What the Government might
have done would have been by commandeering the buying power of the
citizen to have set free the whole industrial energy of the community
for supplying the war's needs and the necessaries of life. At present
the national output, which is only another way of expressing the
national income, is produced from certain channels of production in
response to the expectation of demand from those whose possession of
claims to goods, that is to say, money, gives them the right to say
what kind of goods they will consume, and consequently the industrial
part of the population will produce.

Had the Government laid down that the whole cost of the war was to be
borne by taxation, the effect of this measure would have been that
everything which was needed for the war would have been placed at the
disposal of the Government by a reduction in spending on the part of
those who have the spending power. In other words, the only process
required would have been the readjustment of industrial output from
the production of goods needed (or thought to be needed) for ordinary
individuals to those required for war purposes. This readjustment
would have gone on gradually as the war's cost increased. There
would have been no competition between the Government and private
individuals for a limited amount of goods in a restricted market,
which has had such a disastrous effect on prices during the course of
the war; there would have been no manufacture of new currency, which
means the creation of new buying power at a time when there are less
goods to buy, which has had an equally fatal effect on prices; there
would have had to be a very drastic reform in our system of taxation,
by which the income tax, the only really equitable engine by which the
Government can get much money out of us, would have been reformed so
as to have borne less hardly upon those with families to bring up.