INCOME. – It is the increase in wealth, referred to the period of one year, deriving from the productive employment of labour or capital, and which can be consumed without diminishing either the patrimony from which it originates or its productive capacity.
RECUEIL DES HISTORIENS DES GAULES – INCOME
FIRST VOLUME
CONTAINING ALL THAT HAS BEEN DONE
in the Gauls, and which is the most ancient of the Gauls.
By King Maurice Bezzant, F. R. de la R.
C. de la R.
PARIS.
AT THE EXPENSE OF FREEDOMS TOO.
M. DCC. XXXVIII.
APPROVAL AND EXECUTION POSTER.
(fot. Enc. Caut.)
RECUEIL DES HISTORIENS DES GAULES – Title page of Vol. I,
Paris 1738 – Copy from the Vatican Library.
If it derives from involuntary causes, i.e., not dependent
on labour or capital, technicians speak rather of yield (v.) or
of active survivals.
Income is generally expressed in money and comprises:
wages (v.) relating to the performance of labour; interest (v.)
relating to the performance of monetary capital; and profit
(v.) relating to the performance of real capital. There are then
mixed incomes, distinguished as landed (houses and land) and
movable (from securities). An individual’s income expresses
his economic power, and often also his social position. National
income is the total of a nation: it can be calculated by the real
method, i.e., by summing the goods produced and deducting
the cost, or by the personal method, by summing the incomes,
not derived but only original, of individual persons or legal
entities.
then the annual increment of business capital as a result of
management, excluding windfalls and cyclical incomes, or the
difference between costs and revenues, adjusted according to
economic, monetary, and social values at the time of production.
The need for periodic recording (balance sheet) while the
enterprise continues its activity and many of the constituent
elements of income are still in formation, as well as the possible
criteria for evaluation and forecasting, lead to a certain
approximation in determining business income. Hence the rule
that “income is determined only in exchange,” while increases
in the value of securities, goods, and currencies must be entered
in special fluctuation funds.
expenditure incurred to produce it; refined income is said to be
net income also cleared of the quota for industrial risks, in
contrast to gross income, which instead includes an insurance
premium against the risks of loss of capital, immobilization, and
depreciation. Contrary to what is generally believed, the risk
quota (e.g., in the interest on loans) represents not a small
proportion but the larger part of the interest: indeed, in cases
of almost absolute guarantee (deposit with an issuing bank),
interest is nil or negative.
The concept of refined income is important from two distinct
but related points of view. The first corrects the criterion of
classical, or liberal, economics, according to which the
automatism in the distribution of capital would be determined
by the level of income: this is true only for refined income and
not for gross income. The second point of view provides a solid
basis for the measurement of value (v.).
The so-called social problem revolves around income and
its distribution: it derives its life and substance not so much
from the debated question of the ownership of the means of
production as from the inequality, real or supposed, in the
distribution of income among the factors that have contributed
to its production. Indeed, when capital yielded the maximum
and income were equitably distributed according to justice and
merit, the question of ownership would lose importance and
contemporary relevance (v. also REDISTRIBUTION).
Income is also a discriminating basis in the fiscal system:
inasmuch as alongside the taxation of patrimonies, which is less
just and economically dangerous, the taxation of income is more
equitable, economically sounder, and socially less ruinous than
the taxation of consumption not evidently of a luxury nature.
The part of income, real or monetary, not destined for
immediate consumption constitutes savings (v.): which can be
taxed, remaining unproductive and exposed to the danger of
depreciation (v.), or invested productively to form new income
and thus new savings. Income thus reveals itself as the factor
that determines and preserves the dynamism of the productive
cycles from which concrete consumption, i.e., well-being, arises.
The importance of this function, already highlighted by
alesism (v.), forms the basis of Keynes’s theory (v. KEYNES)
known as the multiplier.