INCOME. - It is the increase of wealth, referred to the period of one year, deriving from the productive employment of labor 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
ET
DE LA FRANCE
VOLUME ONE
CONTAINING EVERYTHING THAT HAS BEEN DONE
The 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st of the 1st
F. D. MARTIN BOURG, Été de la France
AT THE EXPENSE OF THE ASSOCIATED BOOKSELLERS
M. DCC. XXXVIII
ARTIC APPROPRIATION DE L'ARTIC
(phot. Enc. Catt.)
RECUEIL DES HISTORIENS DES GAULES - Title page of vol. I, Paris 1738 - Copy from the Vatican Library.
If it derives from involuntary causes, that is, not dependent on labor or capital, technicians speak rather of income from property (v.) or of capital gains.
Income is generally expressed in money and comprises: wages (v.) relating to the performance of work; interest (v.) relating to the provision of monetary capital; and profit (v.) relating to the provision of real capital. There are also mixed incomes, and a distinction is made between those from land (houses and land) and those from movable property (from securities). An individual's income expresses his economic power, and often also his social position. National income is the total income of a nation: it can be calculated by the real method, that is, by summing the goods produced and deducting their cost, or by the personal method, by summing the incomes, not derived but only original, of individual natural or legal persons.
Some understand income as a typically business fact: it is then the annual increase of the firm's capital as a result of management, that is, excluding capital gains and cyclical incomes: or the difference between costs and revenues, to be adjusted on the basis of economic, monetary and social values at the time of production. The necessity of a periodic recording (balance sheet) while the enterprise continues its activity and many of the constituent elements of income are still in the process of formation, as well as the possible criteria of valuation and forecasting, bring about a certain approximation in determining business income. Hence the rule that "only in exchange is income determined," while increases in the value of securities, goods and foreign exchange must be recorded in special fluctuation funds.
Net income is the definitive one, that is, purged of every expense incurred to produce it: refined income is the net income purged also of the share for industrial risks, as opposed 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 share (for example, in the interest on loans) represents not a small percentage, but the greater part of the interest: in fact, in cases of almost absolute guarantee (deposit with a bank of issue), the interest is nil or negative.
The concept of refined income is important from two points of view, distinct but connected. 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 allows a solid basis to be given to the measurement of value (v.).
Around income and its distribution revolves the so-called social problem: it draws 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 contributed to producing it. When, in fact, capital yielded the maximum, and income were distributed equitably according to justice and merit, the question of ownership would lose importance and relevance (v. also REDISTRIBUTION).
Income is also a discriminating basis in the tax regime: inasmuch as, alongside the taxation of wealth, which is less just and economically dangerous, the taxation of income is more equitable, economically sounder and socially less ruinous even than the taxation of consumption that is not evidently luxurious.
The part of income, real or monetary, not destined for immediate consumption constitutes savings (v.): which can either be hoarded, remaining unproductive and exposed to the danger of devaluation (v.), or invested productively to form new income and therefore new savings. Income thus reveals itself as the factor that determines and preserves the dynamism of the productive cycles from which, in concrete terms, consumption, that is, well-being, springs. The importance of this function, already brought to light by halloism (v.), forms the basis of the Keynesian theory (v. KEYNES) known as that of the multiplier.