230 THE ECONOMIC EFFECTS OF
ciples of thrift, to the removal or at least to the depression of
the stimulus to private enterprise, to the acceleration of that
spurious form of enterprise which we have, with probably little
justification, labelled speculation, and to an attitude of depen-
dence upon government initiative in development which has
gone far to undermine the economic virility of the Common-
wealth. That this is a hard saying, as painfully obvious to the
present writer as to the most unreflective patriot, need not be
doubted ; but so conclusive is the evidence that it is ‘worthy of
all acceptation’.
In its political aspect the situation we have described leads
to many evils that are, of course, fundamentally economic.
Under a party system of government such as that which
characterizes British communities, unrestricted borrowing
facilities tend to be translated into experimental social legisla-
tion which, however praiseworthy in a social sense, is economi-
cally unjustifiable. The capital wherewithal for the indulgence
of political whims is too fatally accessible ; there is, in effect, an
apparently unrestricted supply of cloth for cutting coats of
many unserviceable patterns.! But the primary evil is to be
detected in the possibility which is held out to political parties
of bargaining for power with borrowed money. That this con-
dition is inseparable from our present financial organization,
and that other communities in a similar stage of development
bo that of Australia have done likewise, is beside the question.
If, as we believe, there is a good case presented for an economic
examination of the Australian position in common with all
other borrowers in the same category, the hostile critic is likely
to prove in the end the best friend.
The purely economic dissection based upon the evidence
accumulated in the preceding pages would be directed towards
a solution of the following problems. What are the purely
economic tendencies to be observed as a result of long-continued
external borrowing ? Which of them are adverse to prosperity,
and, particularly, to the maintenance of the high standards of
living to which we have become accustomed? On balance,
* ‘No readier or more dangerous mode of increasing debt can be found than the
execution of public works that are not economically productive. Vague assertions
of indirect benefits should not be allowed to conceal the fact that “improvements”
of this kind should be paid out of income, and cannot be regarded as investments
In the proper sense of the term.’—Bastable, op. cit., p. 627.