ABSTRACT
In the foregoing chapters we have been dealing with two schools of expansionists, those favouring an expansion of the means by which production can be financed and those advocating an expansion of consumers’ purchasing power. There is a third school, which in a way occupies an intermediate stage between the advocates of credit expansion and those of purchasing power expansion. This school has come to be known under the name of the “spending school”. Its underlying principle is that the Government should encourage production and consumption by means of carrying out public works on a large scale. Like those in favour of credit expansion, the spending school desires to tackle the problem at the production end. On the other hand, the execution of public works constitutes a direct Government intervention, in which respect it is to a large degree similar to the expansion of purchasing power by Government action.
