Wohlfahrtzentrale der Stadt Barmen

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: The rates of long-run economic growth and capital transfer from developed to underdeveloped areas / Wassily Leontief, Harvard University - Cambridge, Mass. - U.S.A.

Collection:: Economics Books

150 NATURE OF CAPITAL AND INCOME [Cmae. IX These two items constitute the transfer between the stock of books of the dealer and the stock of books of the customer. The remaining two items constitute a transfer between the stocks of cash of the two men; the dealer debits his “ cash” and the customer credits his. When therefore an article of wealth changes hands, it occasions an element of income to the seller and an element of outgo to the purchaser, and therefore no income at all to society. The effect of canceling these items — the credit item of the seller and the debit item of the pur- chaser — is to free the income account of that article from all entanglements with exchange, to wipe out all money income, and to leave exposed to view what we have called the natural income of the article. Thus, books yield their natural income, not when the book dealer sells them, but when the reader peruses them. The sale is a mere pre- paratory service, a credit item to the book dealer and a debit item to the buyer. The fact of bookselling adds nothing to the income of society, but the reading of the book does. Again, a forest of trees yields no natural income, until the trees are felled and pass into then ext stage of logs. The owner of the forest may, to be sure, “realize” on the forest long before it is ready to be cut, by simply selling it to another; and to him the forest has then yielded income; but, as the purchaser has suffered an equal outgo, the forest has as yet yielded nothing to society. The principle that an article of capital yields, to society, no income except its natural income, is not altered when its ownership is divided nor when the part rights are bought and sold. Adam Smith regarded a rented house as bearing income in the form of rent, but a house occu- pied by the owner as bearing no income at all. The truth is nearly the reverse. Both houses yield income, and both incomes are of the same kind, viz. shelter. The rent of the rented house is, for society, not income at all. It is income to the landlord but outgo to the tenant, — outgo which he

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