Public Finance in the World Crisis.

Because of the existence of the notion that individuals spend money more wisely than do public authorities, public finance has tended to be strictly limited in its functions, it has been regarded as little more than a supplementary agent of private enterprise. The state has been expected to employ public funds for the protection of life and property and for furnishing only those services which individuals could not reasonably hope to enjoy through private enterprise. The major part of the total national income has been deliberately left to be spent privately. In spite of these conceptions, public finance has been continually expanding as the functions of the state have developed. To the strictly protective functions of the laissez faire state, there have been added in the course of time a great many constructive social and economic functions aiming at a correction of some of the most obvious shortcomings of the processes of production and distribution of wealth under private management. This increasing intervention of the state in the economic sphere has been observed in some countries since the World War, and has been practically universal since the beginning of the present crisis. The amount of intervention has varied, in some states it has extended to the point where a substantial control over the operation of industry is involved.