4 HOW TO PAY FOR THE WAR

allow a larger release. But unless we are to fallfar short of our maximum war effort, we can-not allow the amount of mere money in thepockets of the public to have a significant influence,unjustified by other considerations, on the amountwhich is released to civilians.

This leads up to our fundamental proposition.There will be a certain definite amount left overfor civilian consumption. This amount may belarger or smaller than what perfect wisdom andforesight would provide. The point is that itsamount will depend only to a minor extent onthe amount of money in the pockets of the publicand on their readiness to spend it.

This is a great change from peace-time exper-ience. That is why we find it difficult to facethe economic consequences of war. We havebeen accustomed to a level of production whichhas been below capacity. In such circumstances,if we have more to spend, more will be producedand there will be more to buy. Not necessarilyin the same proportion. Supply for immediateconsumption may not increase as much as demand,so that prices will rise to some extent. Never-theless, when men were working harder and earningmore, they have been able to increase their con-sumption in not much less than the same pro-portion.

In peace time, that is to say, the size of thecake depends on the amount of work done. Butin war time the size of the cake is fixed. If wework harder, we can fight better. But we mustnot consume more.