THE THEORY OF INTEREST

discount and interest which constitute the raison d’etrefor the concepts which I have called capital and income.It is chiefly because savings do not enter into these dis-count relations on equal terms with other items of incomethat savings do not form a part of what I have called theincome concept. I do not think there are reasons of ter-minology alone sufficient to justify the inclusion of sav-ings in income. But, if savings are to be so included, someother term must be applied to take the place of what Ihave called income. The justification of these statementsmust rest on my books themselves and on later papersdevoted to this subject.

But it is held that even aside from the relation ofsavings and income, a concept of income as services isquite useless. Services are both heterogeneous and incom-mensurable. 9 They cannot be summated to constitute astock of services. They cannot be thrown together as ifall were alike.

An examination of my The Nature Of Capital and In-come (for example p. 121), will show that I do not treatall services as alike and capable of being added together.I have emphasized that miscellaneous services cannot beadded together until each is multiplied by its price andall are thus reduced to a common denominator.

This criticism of my theory of income seems to over-look the fact that, while enjoyable services (psychicincome) and objective services are themselves incom-^ mensurable, their values are not. Moreover, when thesummation is completely carried out, the values of thephysical elements cancel among themselves and leave asthe net result only the values of the psychical elements.

'Fetter, Interest Theories, Old and New, American Economic Re-view, Vol. IV, No. 1, March, 1914, pp. 68-92.

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