tever figure is necessary to confine the demand to
that amount. Given the quantity of resources which you have available
for future needs, the meshes of the sieve must be made as narrow as is
necessary to confine the projects that pass through within those
limits. And so, indeed, it becomes necessary for any particular
business to pay for its capital interest at the market rate, not so
much to secure the saving of it as to secure its allocation from the
common pool.

Sec.10. _Interest and Distribution_. It is unavoidable that this interest
should accrue to whoever it is that supplies the capital. If the
capital were supplied, as it might conceivably be, collectively by the
community, the interest would accrue to the community, and all would
be well. But as things are, the capital is supplied mainly by the
savings of individuals, and largely by individuals confined to a
relatively narrow class. The profits of Capital have thus a vital
influence on the very serious matter of the distribution of wealth
between social classes. Now, as experience shows, there is no element
in profits which is capable of such radical change in so short a space
of time, as is the rate of interest. Even before the war it had become
hard for people in Great Britain to realize that 3 per cent Consols
had stood at 114 as late as 1896. "How blest," wrote two cynical
satirists of society in the same period:

"How blest the prudent man, the maiden pure,
Whose income is both ample and secure,
Arising from Consolidated Three
Per cent Annuities, paid quarterly."[1]

It is impossible to read those lines now without a sense of irony,
different from that which they were intended to convey.

Not only is the rate of interest now double what it was a generation
ago; we have no good reason to suppose that the present high level
will quickly be reduced. The havoc of the war, of which the
widespread poverty of Europe and the huge debts of Governments are but
two different aspects, makes it almost inevitable that the rate should
rule high in the present decade. This cannot but exercise a profound
influence, of a most disquieting character on the general level of
profits, and to a lesser extent (for here we must allow for the
effects of high taxation) on the distribution of real wealth between
social classes. Here we are on the threshold of tremendous issues. We
almost feel the earth quake beneath our feet. We hear the muffled roar
of far-reaching social c