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 III. Capital and income

Collection:: Economics Books

Sec. 3] FOUR INCOME-CAPITAL RATIOS 187 latter; and that, whereas different qualities of land bear different rents, representing the difference in advantage between a particular grade of land and no-rent land, all parts of capital bear the same rate of interest. These errors come from unconsciously regarding the land in terms of quantity and the so-called “capital” in terms of value: in other words, from considering the income from land in the sense of value productivity, but that from capi- tal in the very different sense of value return. If, in mak- ing our comparisons, we abide consistently by either one of these ratios, the imagined distinction between rent and interest and between land and capital will vanish. It is quite true that the value productivity of land differs with different grades of land; but it is equally true that the value productivity of machinery, or of any other element of capital, so varies. New, high-grade, and efficient machinery bears exactly the same relation to machinery which is out of date and inefficient that fertile land bears to sterile. Similarly, different persons have different degrees of pro- ductivity, some having high and others low earning power. Tt was on this basis, in fact, that Francis Walker applied the Ricardian theory of rent to the explanation of entre- preneur’s profits. On the other hand, if we fix our attention on value return, we find it indeed true that the value return called the rate of interest on “capital” (however narrowly capital may be conceived) is uniform, but we find it equally true that the value return on land is also uniform; for land which yields a high rent will have a correspondingly high value, and, in consequence, the ratio of the rental to the value will be exactly the same as for lower grades. Other examples of confusion might be cited. We find some of them in the cruder theories of interest. The “naive” productivity theory," for instance, confuses phys- ! See Bohm-Bawerk, Capital and Interest, English translation, 1888, Pp. 120-141.

Access restriction

Copyright

fullscreen: The nature of capital and income

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation