The nature of capital and income

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Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Income

Collection:: Economics Books

Ee —— Skc, 2] INCOME 103 A good definition should always conform to two tests: it must be useful for scientific analysis; and it must harmonize with popular and instinctive usage. We shall see that the usual definitions of income fail in one or both of these requisites. Many fail to lend themselves to scien- tific analysis by committing the fallacy of double counting, others by confusing income and capital, while almost all fail to harmonize with popular usage by making out income larger or smaller than common sense would dictate. Like most familiar notions, the notion of income seems to the uninitiated clear enough without definition. But pitfalls which are unseen are for that very reason all the more dangerous. We shall point out a few of them by criticising, not the specific definitions of particular authors, but the general concepts of income which the reader is likely, more or less unconsciously, to have acquired. § 2 The concept of income which is the most common is that of ‘“money-income.” A business man’s ‘“money- income” means to him the money receipts from his busi- ness, less the money expenses of obtaining them. As applied to commercial affairs, this concept is nearly adequate, and in fact it coincides, as a special case, with the concept of income which we have adopted; for the services which a man’s business capital yields him usually consist exclusively of bringing him money, and the disserv- ices which it causes him, of taking money from him. Thus the net value of its services to him, or difference between the value of the services -and disservices, is simply the difference between the money brought in and the money taken away from him by his business. But while the concept of “money-income” is correct so far as it goes, it is far f om exhausting the complete in- come concept. As soon as we pass outside of commercial circles, we find cases in which money-receipts are evi-

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