TBANSACTIONS OF SECTION F. 849 



tliat foi' the purpose of goverumental grants and aids his needs are similar to his 

 neighbour's. And the plain man is right. How can we justify the use of State 

 credit for the purchase of lands in Ireland and fishing boats in Scotland if we are 

 not prepared to give similar aid to the poor of England who are similarly situated ? 

 If we grant judicial rents in the country why not in the towns, and if we fix by 

 • law one set of prices why not all prices ? 



We must not be content with looking at the immediate effects of legislation ; 

 we must consider also the secondary and more remote consequences. If a legis- 

 lator thinks that there are none of importance, let him read a chapter of Adam 

 Smith — in the original and not in the stale pemmican of popular dogmatism. 

 And if he still thinks that every law must be considered in isolation on its own 

 merits, that it is a temporary remedy for a passing emergency, then let him resign 

 his seat in Parliament ; he has mistaken his vocation ; in the name of common 

 sense and the happiness of the greatest number let him cease to be a legislator and 

 become a policeman. 



There is an old fable about the gradual entrance, little by little, of the camel 

 into the tent of the Arab. The British Government — I speak irrespectively of 

 parties, for with the frankness of my old masters in political economy I make 

 bold to say both are equally to blame — the British Government is beginning to 

 •find that the camel is getting too far into the tent. The admission of a single ear 

 is nothing to the admission of the hump, and the knees, and the rest of the beast. 

 Now the ear may be interpreted to mean the grant of a few thousand pounds to 

 Scottish fishers, the hump is universal old-age pensions at a cost of some fifteen 

 OT twenty millions a year, and for the knees you may take the nationalisation of 

 land at a cost of some two thousand millions, and for the whole beast you have 

 the complete Socialist programme. The conclusion that when the beast was in 

 the Arab was out needs no interpretation. 



Let us leave fables for something the exact opposite, namely taxes. It was a 

 favourite doctrine of the old economists that taxes are a burden and the visits of 

 the tax-gatherer are odious. This doctrine also is beginning to reassert itself. 

 The State can do nothing without money, and it generally does things in the most 

 expensive manner. Fortunately in this country we have not yet reached the 

 limits of tolerable taxation, but at the present rate of growth of Imperial and 

 local expenditure we are rapidly approaching those limits. Now, if there is one 

 position that has been firmly established in theory and confirmed by the abundant 

 experience of many nations, it is that excessive taxation is ruinous to a country. 

 We have to consider not only the net proceeds but the indirect cost in all its 

 forms, not only the mere cost of collection but the efiects on industry and on the 

 energies of the people. 



It may, of course, be replied that those who demand a large increase of ex- 

 penditure for public purposes do not propose to tax the poor, but only to take the 

 superfluities of the rich — to take, as is sometimes said, twenty shillings in the 

 pound from that part of every income which extends above 400/. a year. The 

 certain efiect of this kind of taxation would be that in a very short time nobody 

 would have more than 400^. a year, and the sources of taxation would dry up just 

 as people had become used to and dependent on governmental assistance. 



The general argument may be summarised in the favourite phraseology of the 

 •day. The utility of every increment of governmental work rapidly diminishes, 

 •and the disutility of every increment of taxation rapidly increases. Both proposi- 

 tions, I may add, were abundantly proved before the language I have just em- 

 ployed was invented, and the old language, if less scientific, conveyed a more 

 •emphatic condemnation. 



I will conclude by calling your attention to one more position of the classical 

 ■economists, and one that is the foundation of their whole system so far as they 

 <[eal with the principles of governmental action. They maintain that even if the 

 State could do something for individuals as cheaply and effectively as they could 

 do it for themselves, it is in general better to trust to individual effort. The 

 decisive consideration is the effect on the character and energies of the people. 

 Self-reliance, independence, liberty— those were the old watchwords — not State 



1893. 3 I 



