FIRST APPROXIMATION

dude also the alloy of misconception. Thus, the phrase“capital seeking investment” means that capitalists haveproperty for which they desire, by exchange, to substituteother property, the income from which is more remote.It does not mean that there is any hard and fast linebetween invested and uninvested capital, much less doesit mean that the inanimate capital has of itself any powerto seek investment. Again, the phrase “saving capital outof income” means not spending—reserving money whichwould otherwise be spent for immediate enjoyable in-come in order to exchange it or invest it for remoterincome; it does not mean the creation of new capital,though it may lead to that. Many needless controversieshave centered about the phenomenon of saving chieflybecause neither saving nor income was clearly defined. 4

From what has been said it is clear that by buyingand selling property an individual may change the con-formation of his income stream precisely as though hewere specifically lending or borrowing. Thus, suppose aman’s original income stream is $1000 this year and $1500next year, and suppose that he sells the title to this in-come stream, and, with the proceeds buys the title toanother income stream yielding $1100 this year and$1395 next year. Although this man has not, nominally,borrowed $100 and repaid $105, he has done whatamounts to the same thing; he has increased his incomestream of this year by $100 and decreased that of nextyear by $105. The very same diagrams which were used

‘Thus, by saving, some writers understand that capital necessarilyincreases, and hence the income stream is made to ascend; others, likeCarver ( loc. cit., p. 232), apply the term broadly enough to include thecase where a descending income is simply rendered less descending.The latter view harmonizes with that here presented. Saving is simplypostponing enjoyable income.

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