The nature of capital and income

Bibliographic data

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.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Income

Collection:: Economics Books

110 NATURE OF CAPITAL AND INCOME [Cmar. VII Another but very similar attempt to escape the difficulties of double counting and of confusing capital and income is to specify, not that income must in a vague way be “regu- lar,” but that it must be such as to leave unimpaired the capital which yields it." Such a definition has the merit of connecting income with capital as its source, but it merely shifts the pretended attribute of uniformity from the income itself to its parent capital. In actual fact it is seldom true either that income flows uniformly or that capital remains at a constant level. To stipulate such uni- formity as a necessary limitation of income is to define, not the actual irregular income which exists in fact, but an ideal standard which we set up for reference. It cannot be denied that the term ‘income’ is sometimes used in the sense of such an ideal instead of in the sense of actual in- come; and we shall follow this usage so far as to call such an ideal by the name of “standard income.” What we insist on is that such standard income is not, and must not be confused with, the actual income which a man receives from his capital. It is simply the income which he would receive if he chose to keep his capital unimpaired and un- increased. If a man has his capital invested in the form of a house which yields him rent, this actual rent, less any actual expenses for repairs, taxes, etc., is his income from that house, even though the house may be depreciat- ing in value. The ideal or standard income whi h the house might yield without depreciation will be somewhat lower than this actual income, the difference being what is called amortization. This is not the place to discuss amortization and the rela- tions subsisting between standard and real income. These topics will be fully discussed in Chapter XIV. We are at present concerned with actual, not ideal, income; so ! This specification is characteristic of Hermann, Schmoller, and many others. See Kleinwichter, Das Einkommen und seine Verteilung, pp. 22-23.

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