But if the carpet is cleaned by domestic servants or at steam scouring works, the value of the labour spent in cleaning it must be counted in separately; for otherwise the results of this labour would be altogether omitted from the inventory of those newly-produced commodities and conveniences which constitute the real income of the country.The work of domestic servants is always classed as "labour" in the technical sense; and since it can be assessed en bloc at the value of their remuneration in money and in kind without being enumerated in detail, its inclusion raises no great statistical difficulty.There is however some inconsistency in omitting the heavy domestic work which is done by women and other members of the household, where no servants are kept.
Again, suppose a landowner with an annual income of ?0,000hires a private secretary at a salary of ?00, who hires a servant at wages of ?0.It may seem that if the incomes of all these three persons are counted in as part of the net income of the country, some of it will be counted twice over, and some three times.But this is not the case.The landlord transfers to his secretary, in return for his assistance, part of the purchasing power derived from the produce of land; and the secretary again transfers part of this to his servant in return for his assistance.The farm produce the value of which goes as rent to the landlord, the assistance which the landlord derives from the work of the secretary, and that which the secretary derives from the work of the servant are independent parts of the real net income of the country; and therefore the ?0,000 and the ?00 and the ?0 which are their money measures, must all be counted in when we are estimating the income of the country.But if the landlord makes an allowance of ?00 a year to his son, that must not be counted as an independent income; because no services are rendered for it.And it would not be assessed to the Income tax.
As the net payments on account of interest etc.due to an individual-net, i.e.after deducting those due from him to others are part of his income, so the money and other things received net by a nation from other countries are part of its income.
7.The money income, or inflow, of wealth gives a measure of a nation's prosperity, which, untrustworthy as it is, is yet in some respects better than that afforded by the money value of its stock of wealth.
For income consists chiefly of commodities in a form to give pleasure directly; while the greater part of national wealth consists of the means of production, which are of service to the nation only in so far as they contribute to producing commodities ready for consumption.And further, though this is a minor point, consumable commodities, being more portable, have more nearly uniform prices all the world over than the things used in producing them: the prices of an acre of good land in Manitoba and Kent differ more tban those of a bushel of wheat in the two places.
But if we look chiefly at the income of a country we must allow for the depreciation of the sources from which it is derived.More must be deducted from the income derived from a house if it is made of wood, than if it is made of stone; a stone house counts for more towards the real richness of a country than a wooden house which gives equally good accommodation.Again, a mine may yield for a time a large income, but be exhausted in a few years: in that case, it must be counted as equivalent to a field, or a fishery, which yields a much smaller annual income, but will yield that income permanently.
8.In purely abstract, and especially in mathematical, reasoning the terms Capital and Wealth are used as synonymous almost perforce, except that "land" proper may for some purposes be omitted from Capital.But there is a clear tradition that we should speak of Capital when considering things as agents of production; and that we should speak of Wealth when considering them as results of production, as subjects of consumption and as yielding pleasures of possession.Thus the chief demand for capital arises from its productiveness, from the services which it renders, for instance, in enabling wool to be spun and woven more easily than by the unaided hand, or in causing water to flow freely wherever it is wanted instead of being carried laboriously in pails; (though there are other uses of capital, as for instance when it is lent to a spendthrift, which cannot easily be brought under this head).On the other hand the supply of capital is controlled by the fact that, in order to accumulate it, men must act prospectively: they must "wait" and "save," they must sacrifice the present to the future.
