116 NATURE OF CAPITAL AND INCOME [Cmae. VII
instruments is the entire group of instruments constituting
the entire capital of a community, the net total of their
services and disservices is the entire income of the community.
This is social income. If the group be the entire
property of an individual —the rights which he owns,
complete or partial, in instruments — the net total of the
services and disservices to which he is thus entitled constitutes
his income. This is individual income.
In science, the chief test of a definition is its adaptability
to analysis. Judged by this test, none of the current concepts
of income which we have passed in review can
claim to be adequate; for we have found them subject to
the confusions of capital and income, and of double counting.
A secondary test is that a working definition should
also fit into, or rather, give clear and consistent outlines
to the vague notions of income which we find ready made in
the actual world of business and accounts.
Of our own concept of income, as consisting exclusively
of services, we shall endeavor to show that it includes the
commercial bookkeeper’s concept of “money income” ;
that it is coextensive with the popular notions of income,
including what those notions include and excluding what
they exclude; that it affords a place for the usage by which
sinking funds are reckoned and justifies the phrase “living
beyond income”; that it avoids double counting automatically
and without the necessity for the exercise of judgment
in each special case; that it makes capital and income
strictly correlative but never in danger of being confused;
and last, but not least, that it lends itself readily io economic
analysis and serves as a foundation for the theory of interest.
The concept of income to be elaborated is similar to
several which have been put forward by other writers.
Tt is almost identical with that of Edwin Cannan! it
' See History of the Theory of Production and Distribution ; Elementary
Political Economy; and “What is Capital?” Economic Journal,
1897.
