Capital Gains in Economic Theory and National Accounting

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Capital Gains in Economic Theory and National Accounting

Author:: Steindl, Josef

Scope:: Typoskript, 13 Blätter, mit handschriftlicher Ergänzung auf Seite 1 sowie handschriftlicher Paginierung (beides nicht vom Verfasser)

Year of publication:: 1992

Language:: English

Note:: Der vorliegenden Text wurde post mortem (1998) mit geringfügigen Änderungen publiziert.

Topic:: Economic history,economic theory,current developments

JEL Classification:: E22 [Investment, Capital, Intangible Capital, Capacity] E01 [Measurement and Data on National Income and Product Accounts and Wealth, Environmental Accounts]

Shelfmark:: S/M.78.1

DOI:: https://doi.org/10.48671/nls.js.AC14446488

CAPITAL GAINS IN ECONOMIC THEORY AND NATIONAL ACCOUNTING. /ifez. I. STRANGE OMMISSIONS. It is one of the peculiarities of our very peculiar subject that it takes very little notice of capital gains. The national accounts do not know them at all and economic theory has very little if anything to say about them. The reason? Well, the national accounts have two limitations which together prevent any consideration of the matter: They do not deal with assets, and they consider only the relations of flows taking place in one and the same year, not relations of flows in different years. ( This is inevitable because the system of identities refers to one given period ) . If they did we should find that the gains of estate speculators are paid out of the rents or interest on the mortgage of home dwellers in later years and it might then be possible to regard realised capital gains as a special kind of transfer incomes ( the rent or interest paid by the home dweller services a loan which bought the land and from which the speculator's gain was paid ) .As it is, all the accounting identities must refer to one and the same period. On the other hand, as far as theory is concerned the prevalence of equilibrium ideas somehow deflects the interest from facts which from this point of view may appear abnormal or unessential. But if you consider how vastly the value of the urban land has increased in the course of modern capitalist history and is still increasing all the time you wonder at the oddness of our modern economics which manages practically to ignore the theoretical relevance of capital gains for the distribution of income in the long run and for the accumulation of credit instruments which finance them in the short run. The astonishment gets even greater if we think of the casino society in which we live and the hausse and capital gains it has produced in the 80s. The shares are not as difficult to reproduce as land and works of art but are not as promptly reproduced as manufactures, so that they are liable to great price fluctuations and also to a long time trend increase in value reflecting the accumulation within the firm. Again very unlike manufactures are raw materials and agricultural produce which therefore give rise to price movements and speculative gains. II. CAPITAL GAINS AND THE KEYNES- KALECKI PARADIGM.

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