THE twin scourges that afflict the modern world--Depression and War--are not altogether unrelated. Bad as the Treaty of Versailles was, a steady improvement in international political relations could have been expected had we had the vision and courage to stop the Great Depression dead in its tracks and to move forward to higher levels of real income and employment.
The war now afflicting, directly and indirectly, the entire world cannot be explained by overly simplified dogmas running in terms of competitive capitalism and imperialistic rivalries. But it has, nonetheless, an economic basis--the inability of the great industrial nations to provide full employment at rising standards of real income. The disastrous economic breakdown of the thirties let loose forces which have set the world in flames. The ultimate causes of the failure to achieve a world order in the political sphere must be sought in the facts of economic frustration.
It is against the background of the past decade of economic and political futility that this book is written. It deals with the changing role of government, and particularly with fiscal policy as an instrument for regulating the national income and its distribution.
In June, 1939, it was my privilege to present a preliminary report on Fiscal Policy and Business Cycles to a conference of specialists in the fields indicated, called together under the