INCOME AND CAPITAL

He then refashions the food by means of mills, grindingmachinery, cook-stoves and other agencies, and by thelabor of human bodies, including his own.

Neither these intermediate processes of creation andalteration nor the money transactions following themare of significance except as they are the necessary orhelpful preliminaries to psychic income—human enjoy-ment. We must be careful lest, in fixing our eyes on suchpreliminaries, especially money transactions, we over-look the much more important enjoyment which it istheir business to yield.

Directors and managers providing income for thou-sands of people sometimes think of their corporationmerely as a great money-making machine. In their eyes,its one purpose is to earn money dividends for the stock-holders, money interest for the bondholders, money wagesand money salaries for the employees. What happensafter these payments are made seems too private a matterto concern them. Yet that is the nub of the whole arrange-ment. It is only what we carry out of the market placeinto our homes and private lives which really counts.Money is of no use to us until it is spent. The ultimatewages are not paid in terms of money but in the enjoy-ments it buys. The dividend check becomes income in theultimate sense only when we eat the food, wear theclothes, or ride in the automobile which are bought withthe check.

§2. Objective, or Real, Income (Our “Living”)

Enjoyment income is a psychological entity and cannotbe measured directly. We can approximate it indirectly,however, by going one step back of it to what is calledreal income. Real wages, and indeed real income in gen-

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