INCOME AND CAPITAL

think of the income stream not so much as flowing toits enjoyers as flowing from its various sources . 6

Capital value is income capitalized and nothing else.Income flows from, or is produced by, capital goods andhuman beings, so that the capital value is also the valueof capital goods. The income is credited to (and outgo orcost debited to) these goods and (or including) humanbeings.

As every bookkeeper knows, most of the items of in-come (positive or negative) take the form of moneypayments. (These are not a stock of money, which is al-ways capital but a flow of money.) Some are operationspaid for—events in the productive process, such as grind-ing, spinning, weaving, hoisting, hauling, plowing; othersare events of consumption, such as eating food, wearingclothes, hearing music, or seeing a play at the theatre;while still others are within the human mind, such as en-joyments or their opposite, labor effort or discomfort.

It might seem that in sorting and combining such a

“Possibly it would help to adjust our mental attitudes to this changedpoint of view if we could change the name of income to outcome, oroutput. Income suggests coming toward us while outcome suggestscoming from the source. Thus the outcome from a farm is the net valueof its crops; the outcome from a railway company is its dividends, etc.

Under this new procedure, we credit each item of income as out-come from its source and debit every negative item. Negative items ofincome are outgo. If we could change this name also, we would call itingo, or input.

It is a mere clerical matter of bookkeeping thus to credit to itssource every service rendered as so much outcome (or income) anddebit it with every disservice rendered, as so much ingo (or outgo).

Having suggested these new terms, however, so that the student maymentally, or literally by lead pencil, substitute them for the old, I shallhereafter, for simplicity, adhere uniformly to the original terminology,using the term income even when we are thinking merely of its comingfrom its capital source while the recipient is forgotten.

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