104 NATURE OF CAPITAL AND INCOME [Caar. VII

dently only a part of all receipts and money-costs only
a part of all costs. In primitive communities, and even in
highly organized communities, the income of many persons
consists partly in the acquisition of goods other than
money. The clergyman receives, besides his salary, the
use of a parsonage; and domestic servants receive, besides
their wages, their food and lodging. Again, many goods
considered as constituting income are not acquired by
exchange at all, but produced by the individual himself.
It is usually recognized that a farmer’s income includes
not only what he gets in money by sale and barter, but
what he obtains “in kind,” — the products of his farm
consumed by his own family.
On the other side of the ledger there are many costs
which are not in money form, namely, sacrifices of commodities
 and labor in the process of acquisition. The
farmer’s crops cost him labor as well as wages. Again,
he may not pay money for his seed and fertilizer, but
sacrifice for these some of the products of his farm
instead.
While the acknowledged existence of non-monetary receipts
 and costs is of itself a sufficient proof of the inadequacy
 of the money-income idea, there is the further
objection that money-income itself exists, so far as it has
any existence, merely for the purpose of purchasing
other goods. The laborer’s wages are not his “real wages,”
but the means to them. He transforms his money-wages
into food, clothing, housing, and other uses. These, and
not the money which buys them, constitute his real income.
If we acknowledge this, we are led away from moneyincome
 to another concept common in economic literature,
 but still inadequate, namely, “real income.”

§3

“Real income” has been defined in various ways, and,
like income in general, is often not defined at all. So