OBJECTIONS CONSIDERED

It may be objected that, at one stage in this process,income appears to be more closely related to the expendi-ture of money than to its receipt and, as such, seems outof keeping with the ordinary idea of income. This seem-ing contradiction between money income and enjoyableincome is readily resolved if we consider debits andcredits. When money is spent, the expenditure itself is,it is true, outgo to be debited to the commodities boughtwith it. But these commodities afterward render a returnin satisfactions. These satisfactions are certainly not ex-penditures, but receipts. Whether money spending isassociated with outgo or income is entirely dependent onwhether we fix attention on the loss of the money or thegain of the goods and services for which the money isspent.

These services, which constitute income, are related tocapital in several ways. As income services, they flowfrom, or are produced by human beings and the physicalenvironment. When I first came to the study of incomeand capital, I developed the concept of capital as a stockof wealth existing at an instant of time, and of income asa flow of wealth during a period of time, which concept Iadvanced in 1896. 9a I found it necessary in 1897 to modifymy concept of income, and so stated. 10 Since then I havefound no reason for further modification either of theconcept of capital as a stock of wealth existing at aninstant of time, or of the concept of income as a flow ofservices through a period of time, while the values ofthese are respectively capital value, and income value,often abbreviated into capital and income.

What is Capital? The Economic Journal, Vol. VI, Dec., 1896, pp.509-534.

10 The Role of Capital in Economic Theory, The Economic Journal,Vol. VII, Dec., 1897, pp. 511-537.

[457]