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

128 NATURE OF CAPITAL AND INCOME [Cmar. VII proper to regard it as outgo in the case of each single house; for the income account of the total mass of the commu- nity’s capital is simply the combined accounts of the individual elements. We cannot consistently do other- wise than regard all costs, whether recurrent or not, as outgo. In actual business there are usually many articles of the same kind, so that it is seldom necessary to reckon the net income from each individual article. Such articles may be conveniently lumped together. This we have just seen in the case of the houses of the loan association. As an- other example we may take the stock-in-trade of a mer- chant. This stock yields him income, not, as in the case of the house, by rent, but by sale; the difference between rent and sale being simply that rent consists of a series of contributions to income, whereas sale consists only of one. A stock of stoves, just as a stock of houses, yields income which is the sum of the net incomes from its individual constituents. But the stove dealer would find the book- keeping very troublesome were he to reckon in a separate account the net income from each individual stove which he buys and sells. He reaches the same final result for his stock as a whole (or rather, for each specific category of articles in his stock) by taking from his gross receipts obtained by selling stoves the year’s cost of replenishing his stock, the rent of his warehouse, salaries of clerks, and other outgo. Were he to arrive at this result by applying the same process to each individual stove, the individual results would, of course, vary widely; for a stove left over from last year (and therefore free from any item of cost in this year’s accounts), if sold this year, would give a large net income, while another stove, bought this year, but not sold until next, would only have debit items in this year’s account. But the sum of these irregular incomes from individual parts of the merchant’s stock will give a steady income for the whole.

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