Page:The Economics of Unemployment.djvu/51

surplus income from the 'capitalist classes' to the workers, would have the effect of reducing the proportion of the aggregate income that was saved, some compensating movement in the stimulation of working-class saving would be set up. If the general effect of such a change were, as I contend might reasonably be expected, to maintain a higher and more continuous use of all factors of production, the smaller proportion saved from the greater product might yield enough new capital to maintain, in conjunction with a more efficient labour factor, even a higher rate of industrial progress than has hitherto been obtained.

But there is no reason for assuming that the process of equalisation of income means the absorption of all rents, monopoly profits, and other 'surplus,' in higher wages.

In every civilised country a growing proportion of this surplus is needed by the State for the efficient performance of an increasing number of public services, and is taken in national and local taxation. This claim of the State to its share in the general income may be justified upon the same grounds upon which the individual bases his claim, viz. that of a serviceable contribution to the production of the income. State work, properly performed, whether it be the primary work of justice and defence, the provision of means of communication, or the constructive social services of health, education, recreation, insurance, and the like, must be regarded as a factor in economic production, entitled to receive, and in fact taking, its necessary costs out of the national income it helps to produce. The notion of taxation as a forcible confiscation,