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 com- 
modities 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 re- 
ceipts and costs is of itself a sufficient proof of the in- 
adequacy 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 money- 
income to another concept common in economic litera- 
ture, 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