CHAPTER I
INCOME AND CAPITAL 1
§1. Subjective, or Enjoyment, IncomeIncome is a series of events . 2
According to the modern theory of relativity the ele-mentary reality is not matter, electricity, space, time,life or mind, but events.
1 The Nature of Capital and Income (first published in 1906) was pri-marily intended to serve as a foundation for The Rate of Interest whichimmediately followed it. It was my expectation that the student wouldread the former before reading the latter.
But now, for the convenience of those who do not wish to take thetime to read The Nature of Capital and Income, I have written thisfirst chapter summarizing it. I have availed myself of this opportunityto redistribute the emphasis and to make those amendments in state-ment which further study has indicated to be desirable.
A friendly critic, Professor John B. Canning, suggests that The Na-ture of Capital and Income should have been called “The Nature ofIncome and Capital” and that the subject matter should have beenpresented in reverse order, inasmuch as income is the basis of the con-cept of capital value and is, in fact, the most fundamental concept ineconomic science.
While it might not be practicable to employ the reverse order insuch a complete presentation as I aimed to make in The Nature ofCapital and Income, I have, in this chapter, where brevity may justifysome dogmatism, adopted Professor Canning’s suggestions. This radicalchange in mode of presentation may induce some who have alreadyread that book to review it now in the reverse order employed in thischapter. I hope also that some who have not read it may be moved,after reading this chapter, to read The Nature of Capital and Income infull. I have tried, in this chapter, to confine myself merely to thoseconclusions most essential as a preliminary for proceeding to the con-sideration of the origins, nature and determinants of the rate of interest.
3 The first writer to employ the concept of events as fundamental ininterest theory appears to have been John Rae , whose book, originallypublished in 1834, is commented on elsewhere.
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