TRANSACTIONS OF SECTION F. 683 



•Subtractions are always made for certain amounts of outlay considered to 

 be necessary for obtaining the income, and then the income is what remains. 

 The fact that this process is illogical, since we cannot decide what is necessary 

 for obtaining the income till we know the magnitude of the income, is usually 

 overlooked. The idea at the bottom of the process seems to be so to calculate 

 income that persons should be able to spend their whole income in satisfying 

 their periodical wants, and yet continue to be as well off (and no better) in the 

 future as at the present moment. If they spend more than their income they will 

 be worse off. and if they spend less (or ' save ') they will be better off, provided, 

 of course, that what they save is well invested. 



The complete and systematic carrying out of this idea is made difficult by th? 

 short and uncertain duration of life, and still more of working life. In calculat- 

 ing incomes from most kinds of property we set before ourselves the ideal of 

 permanence into an indefinite futurity, whereas in calculating incomes dependent 

 on the life of the receiver we are content to think of his life alone ; and in calcu- 

 lating incomes derived directly from labour we are content to consider quite short 

 periods, such as a year, and do not even attempt to ' smooth ' the income over 

 working life, nor to subtract cost of education and training. 



When statisticians compute ' national incomes,' i.e., the total income of all 

 the persons living on a particular area, they add together all three sorts of 

 income. There is ordinarily a perpetual succession of life-annuitants and of 

 workers, so that receipts which are temporary to individuals may be permanent 

 enough to the 'people of the country.' The total income derived from property 

 is not a matter of simple arithmetic, nor even of elaborate accounting, but 

 very largely a matter of mere speculation, as no man can really foresee the 

 future, on which it depends ; but it may very likely be that errors in one direction 

 balance those in the other, so that the total may come out more nearly right 

 than a sum obtained by any other method. It should not be forgotten, however, 

 that the total income from property is calculated on the assumption that the 

 number of owners will remain unchanged. It is not true that the fact that the 

 whole of the inhabitants of an area are spending less than their aggregate income 

 proves that the whole of the inhabitants in the future will have more income 

 per head from property. Whether or no must depend partly on the variation 

 of population. 



Economists have assumed that the income in money represents the money 

 value of certain commodities and services and additions to capital, which they call 

 the ' real income ' ; but there is no such separate set of commodities and services 

 and things added to capital. Income can only be ascertained by valuation. Like 

 other conceptions dependent on valuation, it is of little or no use in dealing with 

 ' nations ' and society at large. It is not desirable to endeavour to change the 

 meaning of the term by throwing out alterations of capital and applying it to 

 material welfare actually enjoyed, since the term has at present a useful signi- 

 fication in regard to individuals, and is required in dealing with distribution. 



3. Report on the Amount and Distribution of Income beloiv the Income-Tax 

 Exemption Limit. — See Keports, p. 170. 



A. The Trade Cycle and Solar Activity. 

 By H. Stanley Jevons, M.A. 



The chain of causation connecting the trade cycle with oscillations of solar 

 energy may be traced through the weather and harvests. The energy received 

 bv the earth from the sun, whether in the form of radiant heat or of electrical 

 effects, oscillates in a period of variable length, averaging about 3'6 years. 

 Meteorologists have shown that there is in many localities a very marked varia- 

 tion of atmospheric temperature and pressure in the same period, which is a 

 partial measure of an actual climatic variation, making the weather alternately 

 favourable and unfavourable to the harvests. Statistics of crops show that the 

 alternation is in opposite senses in regions of continental and oceanic climate 



