The State is the centre of Public Finance. The State requires money and services for the performance of its functions. The first question is what is the nature of the State, and what are its functions ? To answer this we shall have to borrow a little from Political Science. The best recent authorities on Political Science seem to answer the question, " What is the State ? " with a more or less expanded but not essentially modified restatement of Aristotle's famous dictum : " It is manifest that the State is one of the things that exist by nature, and that man is by nature a political animal." The State is an organism into which the individual is born, and through which alone he can hope to reach his highest development. Upon its existence, and the perfection with which it performs its functions, depends the degree of social organisation possible. The State seems to be God-given to enable society to organise on a grand scale for the accomplishment of practical ends far beyond the reach of the individual, — ends upon which the welfare of the individual depends.1

The two opposing theories as to the proper sphere of the State, Individualism and Socialism, stand for two grand truths. The one for the truth that the individual, if he is to accomplish his manifest destiny, must be allowed or assured room enough for the free exercise of his powers so as to develop them, and to expand. Such individual development is necessary for the advance of The second, that the State affords the individual the surest means of obtaining the assistance of his fellows, so necessary to his own complete manhood. The way of reconciling these two theories is pointed out in the Christian doctrine that true freedom consists in perfect obedience to the law. Anything short of perfect obedience to the highest law is failure to attain the highest freedom.

The constant intrusion of the State on fields of activity previously given to the individual result of the constant increase in the separation of employments, necessitating more extensive organisation. As the individual becomes more and more dependent for the completeness of his own life on his fellows and their faithful performance of the duties assigned to them, the organisation of the State becomes correspondingly more perfect. As regards this increasing importance of organisation, the following will fairly summarise the practice of advanced nations. It is impossible to approve on a 'priori grounds of every intrusion of the State into fields hitherto set aside for the individual. Only when such intrusion does not lessen individual power, energy, ambition, and ability to advance, is it permitted. And only when it promises definitely to increase the importance of the individual, in the long run, is it desirable. The burden of proof is therefore in each concrete case thrown upon the persons who would have the State advance into new fields. There is no absolute limit to, but only a general presumption against, the assumption of new functions by the State.

1 Cf. Kidd, Social Evolution ; for detailed analysis of the nature of important modern states see Burgess, Political Science and Comparative Constitutional Law.