68 HOW TO PAY FOR THE WAR

Movement were to be successful in increasing theamount of the voluntary savings by (say) another£100 million, making £800 million altogetherinstead of £700 million, then the excess of spend-able incomes is reduced to £550 million or about17 per cent above the available supply at pre-war prices. In this case we can reach equilibriumwith a rise in prices only 17 per cent (instead of20 per cent) in excess of the rise in wages andother costs.

Thus an increase in voluntary savings is entirelybeneficial. There is nothing to be said against it,except its inadequacy. The question for the indi-vidual is whether he would prefer to become £2richer by deferment of pay, and have no inflationof prices or become £1 richer by voluntary savings,and suffer inflation with its evil social consequences.For the individual (unless he belongs to the profit-making class) the answer is surely obvious. He iscertain to gain by the system of deferment. Itis like asking him whether he would prefer tohave a compulsory rule of the road with fewaccidents and no traffic congestion, or a volun-tary rule with many accidents and much trafficcongestion.

For the Treasury and for future taxpayersthe answer is not so obvious. A system of de-ferment of pay—and equally, a system of highlysuccessful voluntary savings—will leave us witha larger national debt measured in terms of realvalue, than if we adopt the method of imper-fectly successful voluntary savings supplementedby inflation. For inflation is a mighty tax-gatherer.