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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28&
For example, in the consumer classification the category
clothing’ includes the principal products of five industries:
textiles, clothing, other manufacturing, transport and distri-
bution. For this reason we carry out our analysis of consumers’
demand in two parts: first, an analysis of this demand in terms
of consumers’ categories; and second, a conversion from these
categories into commodity categories and hence into demands
on industries.
Class 4 relates to government purposes. Like private con-
sumers, government departments habitually classify their ex-
penditure in a manner different from that used for industrial
products. But this time it is not a shopping list that is used
but a classification by purposes: health, education, defence
and so on. In order to form any view of future demands for
these purposes we must work with this classification, but in
order to relate these demands to demands on industries we
must convert them into a commodity classification.
It is for these reasons that we have four classes of produc-
tion accounts. As a consequence we have an elaborate account-
ing system which many people may regard as tedious and
‘echnical. So, in principle, it is. But in principle does not
mean in practice, and a realistic representation of the actual
world inevitably requires such technicalities.
I shall not continue with a list of classes and the reasons
for adopting them; all such details can be found in [8].
Instead, I shall mention one part of the existing structure that
we hope to change and a number of directions in which we
nope to develop.
The change will come not in the structure itself but in the
numerical value of the entries. As I have mentioned, we divide
capital expenditures between replacements and extensions. In
SAM, replacements are calculated by reference to past capital
expenditures and to the life-spans of different kinds of asset,
which are assumed to be fixed. We know perfectly well, how-
ever, that while there may be an average life-span for any
I] Stone - pag. 38
