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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Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Capital and income

Collection:: Economics Books

268 NATURE OF CAPITAL AND INCOME [Cmar. XVI ness of these elements is introduced into the problem, the observer unconsciously shifts his ground from the “long run” to the true theory of chance. Chance is, then, an affair of human knowledge or igno- rance. According to this — the ignorance — theory, chance is not objective, but subjective. Outside of the mind, chance has no place. If a man holds a coin in his hand and, without letting it be seen, asks his neighbor what the “real” chance is that heads are up, will not the latter reply one half? But as a matter of fact the position of the coin is absolutely determinate. Either heads are up, or tails are up; there is no ambiguity. Without changing the coin, the holder opens his hand. He sees that heads are up. Without disclosing this fact to his neighbor he re- peats the question, “What is the chance that heads are up?” Will not the latter still reply, “One half”? To him, in his ignorance about the coin, the chances are exactly even; but to the man who holds the coin and whose eye has seen it, there is no uncertainty. He knows that heads are up. For him the element of chance has vanished because the element of ignorance has vanished. Chance exists only so far as ignorance exists; varies with different persons according to their comparative ignorance of the matter under consideration ; and is in fact a measure of ignorance. Of course the actual statistical record may afford an im- portant and sometimes the only basis for our degree of knowledge and ignorance. Practically it therefore often happens that we derive our estimate of chances from the behavior of events “in the long run.” It is thus that the chances of fire, shipwreck, and death are estimated by the insurance companies. But while statistics supply data for the forming of subjective estimates of chances, they do not, themselves, constitute chances; and even when they enter into the problem the insurance examiner does not follow them blindly. He always examines the special

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