The story of Pittsburgh: Radium

The nature of capital and income

Bibliographic data

Multivolume work

Identifikator:: 1831622599

Document type:: Multivolume work

Title:: The story of Pittsburgh

Place of publication:: Pittsburgh

Publisher:: First National Bank

Year of publication:: 1919-1930

Collection:: Economics Books

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Volume

Identifikator:: 1831623226

URN:: urn:nbn:de:zbw-retromon-239786

Document type:: Volume

Title:: Radium

Volume count:: Vol. 1, nr. 7

Place of publication:: Pittsburgh

Publisher:: First National Bank

Year of publication:: 1921

Scope:: [ca. 18] Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Multivolume work

Structure type:: Chapter

Title:: Radium

Collection:: Economics Books

Skc. 4] INCOME ~ 407, difference between the case of the bread and that: of the” dwelling is purely one of degree. The uses of the bredd, fol- low the acquisition of the bread almost instantly, whereas’ 24 the uses of the dwelling are not completely ended until many years after the dwelling is acquired. From this difference in time comes a corresponding difference in value. The value of the use of the bread is practically identical with the value of the bread. A man will give ten cents to- day for a loaf if he expects its use (consumption) to-morrow to be worth ten cents. The value of the dwelling, however, will be less than the value of its prospective uses, owing to the fact that these uses are so remote in the future. If the dwelling is expected to last fifty years, and its shelter to be worth $1000 a year, this $50,000 worth of shelter will not by any means be worth $50,000 in advance, but only, say, $15,000. This “capitalized” value of the expected uses of the dwelling will be the value of the dwelling. In short, the bread and its uses are practically contemporane- ous and equal in value, whereas the dwelling and its uses are widely diverse in both particulars. Consequently it has not seemed worth while to economists to distinguish between the bread and its uses; whereas they could not help distinguishing between the dwelling and its uses. But in science, logical distinctions are inexorable, and their violation always brings retribution. It may be said in truth that if economists had been serupu- lous enough to distinguish a loaf of bread from its uses, they would have escaped most of the confusions which have so long enveloped the theory of income. Having once chosen as the income element the food instead of its use, economists have proceeded to do the same in the case of clothing and other moderately durable commodities. Naturally they have not known where to cease calling the concrete instrument income and begin calling its use income instead. In their hesitation they have in some cases ended by including both. By so doing they commit the fallacy

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