Men and wealth, the t great classes of economic agents, are severally and in com ation the sole source of all eco nomic incomes. The cor sponding classes of incomes are labor-incomes and wealth "ncomes.il The former of these io As has been done by many economists. Very commonly, also, men are spoken of in popular discussion as capital or as wealth—a very questionable terminology.
11 See definition of labor-incomes, ch. 18, sec. 1. It is well to observe that this term has, in certain interesting and valuable rural surveys, been used in a peculiar and restricted sense, that of the amount of clear gain that a farmer may fairly attribute to his own services (after mak ing due allowance for the usual rate of return on his total investment) in addition to the personal usance of his house, yard, and other wealth (horses, carriages, etc.) and to all the products of farm (food, fuel, etc.) that are consumed by himself and family. The term as thus under makes greater aggregate amount, made up, however, of many incomes, nearly all small. The great majority of the people of any country live mostly on labor-incomes, their own or from members of their family. This is true even if all the psychic incomes of personal service for one's self and family be overlooked, and only the more material forms of income, such as are ordinarily regarded in income statistics (material products and money wages) be reckoned. At the same time there is no family so destitute that a part of its psychic income is not obtained from the usufructs of durable wealth (uses of clothing, cooking utensils, furniture), and there are millions whose labor-income in the form of goods and money is sup plemented to a considerable degree by incomes from some wealth or claim upon other men. There are the agricultural workers, some of them land owners or partly land owners, and nearly all of them to some extent tool owners. There are many city dwellers owning their stores and manufacturing establishments in whole or in part, and many more owning houses; there are in America nearly nine million depositors in savings banks (many persons and families being duplicated). Millions of other persons hold, through mortgages, bonds and shares, claims on real estate, small businesses, or on corpora tions (later treated more fully under "capital"). There are the accumulated funds of insurance companies, fraternal orders and societies, owned collectively by members and policy holders. There are the psychic incomes shared by the masses
of the people in the use of schools, museums, libraries, build ings and all other enjoyable public property. The labor in come is thus in the case of individuals or families but the part of income which is due and attributable to the valuable efforts they have rendered to themselves or others. This form of in come stops when the man dies or fails to perform his work ; the income from wealth goes on. Thus families with equal stood is of course unsuitable for a more general economic application, and even in its special use, it unfortunately opens the way to some mis understanding of the results of the surveys.
incomes may receive them from sources of very different sta bility and duration.
§ 13. The wage system. A large part of the labor-incomes in society as it is at present are receivW in the form of wages. Indeed our present economic organization is often called "the wage system." By this is meant: an organization of industry wherein some men, in control of the material agents, buy at their competitive price the labor of other men. The wage sys tem implies a contract between employer and employed. The relation or bond between them is that of a wage payment, either in money or in kind. The wage system is a method of organization never found completely realized. A community made up entirely of independent small farmers, living each on his little patch of ground, could not have any essential feature of the wage system. Wherever are found considerable numbers of independent small farmers and other self-employ ing laborers, as is everywhere in large measure the case, the wage system does not exist in complete Some men with more or less wealth in every community are working for wages, while others are independent producers and are their own employers. Society not sharply divided into two classes, one controlling all he material equipment, the other with only their bare labor to sell. The wage system may be spoken of as prevailing to ay not as the exclusive, but as the typical, dominant, and slo increasing form of industrial organization, while side by side or along with it is found in dependent production.