THE AMOUNT that a nation can afford to devote to economic security is to a large extent relative. It varies with the type of compromise that can be made between capitalistic and socialistic principles. The nature of the compromise appears to depend upon (1) the pressures which different types of public opinion can exert, through organization or otherwise, in determining the security policies of the government and (2) upon the degree of understanding possessed by different social groups as to what sort of compromise is being made. Security expenditures are inevitably a political matter, but this statement is not meant in any lurid sense. (The political aspects of the relief situation may be more legitimate and subtle, on the whole, than is direct vote buying.) It means simply that the amount spent for social security is flexible and that, although there may be some limiting ceiling above which such expenditures can not extend, in practice the amount is largely determined by what the public is willing to pay and by the political pressures related to public opinion.
In spite of the fact that security expenditures are mainly determined by political pressures, there is a real limit to the size of these expenditures which is frequently discussed by those who determine financial policies. Clearly this limit is determined by the taxable capacity of a nation and by the effects of security finance upon business prosperity and national income. Since the