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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Income

Collection:: Economics Books

Sec. 8] INCOME ACCOUNTS 137 of making sume deductions from the total money receipts. He also instinctively feels that not all of the disbursements should be thus deducted ; otherwise little or nothing would remain. The ordinary makeshift is to deduct the *“ business expenses,” — the $500 invested in stocks and bonds and the $500 for clerk hire. The remainder will then be $3000, which is, for practical purposes, a sufficiently close approximation to the true net income of $2800. Practically, therefore, either money receipts (less “busi- ness’’ expenses) or the sum of the net incomes from secu- rities and labor, are good makeshifts for true income. But even from a practical point of view they will not always serve, while as a matter of strict theory they are always wrong. They could be right only under the condition that all income, from whatever source, flowed through the cash drawer. If it were true that the net income from stocks and bonds, the net income from the lawyer’s practice, and, in like manner, the net income from every other source flowed into the cash drawer, while, on the other hand, the flow out of that drawer consisted exclusively of expenditures for each and every satisfaction as it occurred, then the flow of money through the cash drawer would serve as a true meas- ure of income, and the cash drawer might be called a sort of income meter. The flow into it would be money income and the eventual satisfactions obtained from it would be real income. The two would then also have the relation usually ascribed to them by economists. This case is practically realized in the case of a rentier, who simply re- ceives money from investments and spends it for imme- diate satisfactions, renting, let us say, not only a dwelling but its furniture as well, so that practically no part of his income can reach him except by passing through the money stage. But few people are in exactly this position, so that not all income passes through the meter. Some passes around it, as, for instance, the shelter derived from a man’s own house or the comforts from his own furniture, and hence

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