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 I. Capital

Collection:: Economics Books

ii gH hi 64 NATURE OF CAPITAL AND INCOME [Crap IV it does not matter what purpose is behind it. A social club, an art gallery, or a hospital may have a capital. In one year a joint stock company with capital stock was proposed for the purpose of building the yacht for defend- ing the America Cup. If a private family should call it- self a joint stock company and draw up a balance sheet, entering all its property, house, furniture, provisions, ete., on one side, with the debts on the other, no business man, we imagine, would hesitate to call the balance of assets over liabilities, which is the total wealth-value of the family, by the name “capital.” As a business man said to the writer, “Capital isn't a part of wealth, but all a man has got, including his automobile.” “Is that cigar in your mouth capital?” he was asked. “No,” he said, hesitatingly; but this opinion he quickly reversed as in- consistent with his former statement, and admitted that a box of cigars and each cigar in it, or out of it, for that matter, were a part of his stock or reserve. The phrases “to capitalize” and “to live on capital,” as used by business men, imply that capital is simply a fund. When we “capitalize” an annuity of $5 a year at a given sum, as $100, we mean that $100 is the fund of ready-money equivalent of $5 flowing in annually. It does not matter what kind of goods the $5 of income or the $100 of capital represents. Again, when we say that a man is “living on capital,” we mean that he is using up his stock faster than he is replacing it. The reference is not to any particular part or kind of the stock. A wealthy New Yorker who ‘was recently forced to “live on capital” did so by selling his accumulations of art treas- ures; it would be the same if he had sold his stocks and bonds. So far, then, as popular and business usage is concerned, we have ample warrant for the definition of capital here accepted, and no warrant whatever for the definitions ordinarily found in economic text-books.

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