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ARE WE LIVING ON CAPITAL? 301
onus of proof that expenditure on armaments in time
of 'peace, to the extent of the actual expenditure of
different nations that we see, tends to a waste of
nati<.tnal capital, lies upon those who dwell upon the
mischief of the armaments themselves. I have never
yet seen, however, any attempt to show that the capital
of any great miHtary countries such as Germany,
France, or Russia, has been diminished, or even the
growth of capital greatly-checked, by such expenditure.
There is a constant assumption that great expenditure
on armaments must mean such a diminution of capital,
or check to its growth, and there is no attempt to prove
the case by actual experience.

The final conclusion on the whole matter is, that the
facts, when examined, hardly support the common talk
as to this country living on its capital in its transac-
tions with foreign countries, and as to nations wasting
and expending their capital by means of excessive
armaments. As to the former point, we have found
that the whole talk on this subject which we have been
criticising is sheer nonsense. The phenomena, when
examined, do not even suggest that we are living upon
our capital at all. As to the second point, the conclu-
sion is that nations in their armaments may go very
far indeed without trenching on their capital, and, in
particular, they may go very much further at the
present time than any nation is now doing. In former
times countries have gone through great wars and
great catastrophes, and have been found a few years
after to be in possession of much more capital than at
the beginning of the catastrophic period. At the present
moment nations are expending 4, 5, and, perhaps, in
some cases, 10 per cent. of their income upon arma-
ments, but such expenditures, however serious, do not
involve necessarily any waste of capital, because they
can be borne out of income. In some cases, in past
times, particularly in the case of this country during
the great war with France, the strain upon income was