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 III. Capital and income

Collection:: Economics Books

228 NATURE OF CAPITAL AND INCOME [Cumar. XIV value of the hoyse when interest is at the same rate is $18,300, whereas the total income to be expected from it is about three times as much, or $50,000; that the value of the horse is a little over $500, whereas the total expected income is about $100 more, or $600 ; that the value of the suit of clothes is $28, whereas its total income is $30, of which $20 accrues the first year and $10, the second; and, finally, that the capital-value of the loaf of bread is 10 cents and the income expected from it is also 10 cents. In this limiting case there is practically no diminution on account of the interval of time to elapse between the time of valuing the instrument and the time of receiving its services, for the reason that this time is too brief. From the table we see clearly one reason that certain articles have been identified with income and others not. Bread has practically the same capital-value as income-value, so that, if a person were not accustomed to fine distinctions, he might think it unnecessary to diserimi- nate between the 10 cents which is the value of the use of the bread, and which is, therefore, income, and the 10 cents which is the value of the bread itself, and which is, therefore, capital. There is almost as much danger of such confusion in the case of clothing; for there is only a slight difference between the $30 which is the value of the use of the suit, and is therefore income, and the $28 which is the value of the suit, and is therefore capital. But as we pass to the more enduring articles, there emerges so wide a difference between the value of the use of an instrument and the value of the instrument itself, that there is no difficulty in dis- tinguishing between them. Accordingly we usually find in treatises on economics some distinction between the value of the use of a house ($50,000 in the foregoing table) and the value of the house itself ($18,300 in the table). But if the distinction is valid in one case it is valid in the others. The consequence of disregarding it we have already seen in Chapter VII.

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