The Principles of Economics, with Applications to Practical ProblemsFetter, Frank A. (Frank Albert)
General
The Principles of Economics, with Applications to Practical Problems
Fetter, Frank A. (Frank Albert)
Economics
1. _Personal distribution, in economics, is the reasoned explanation of
the ways in which income is divided among the members of the community._
Before noting more exactly the ways in which distribution can and does
take place, it may be well to review briefly some definitions that have
been given in other connections. Distribution is bound up in practice
with production, but it can be thought of as a more or less distinct
problem. Functional distribution is the attribution of value to agents
or classes of producers, to land, machinery, and labor considered
impersonally as groups of productive agents. Personal distribution is
the actual apportioning of income to living persons. This theme now to
be dealt with is the more important practically, for the abstract
discussion of rent and interest is of use only as it helps to an
understanding of this vital human problem. It is well to recall also the
distinction between wealth income, money income, and psychic income. The
first is the objective aspect, the last is the subjective aspect, of
income; the second, money income, may be an expression, in money form,
of either of the others, but commonly of the former. The money
expression of psychic income can be only approximately attained.
[Sidenote: Personal affection and distribution]
2. _The individual's income is determined by a number of forces, only
part of which are primarily economic._ Many persons derive income
directly neither from property nor from labor. They neither toil nor
clip coupons, but they flourish in the favor of others--parent, husband,
wife, friends, patrons. So long as the good-will continues these persons
may be as well off as if they drew a salary or owned a bank. If a person
in control of goods shares them with another, it is a matter that
economists must recognize, but cannot well reduce to rules of value. It
is not the task of economists to explain why the impulses of generosity
arise, but only how they affect distribution. The economic problem of
distribution really ends where owner or worker secures his income.
Giving a part of it to some one else is essentially a form of
consumption, and only secondarily a mode of distribution; it is the way
chosen to spend the wealth income.
[Sidenote: Complex source of psychic incomes]
Public-domain text, read in full here on John Shaqi.
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