Studies in Income and Wealth, Volume Two. by Conference on Research in National Incomeand WealthReview by: Edgar Z. PalmerJournal of the American Statistical Association, Vol. 34, No. 206 (Jun., 1939), pp. 434-435Published by: American Statistical AssociationStable URL: http://www.jstor.org/stable/2278878 .

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434 AMERICAN STATISTICAL ASSOCIATION-

Federal income tax data. By combining the corrected distributions for the various groups, an estimated national distribution of family incomes was built up.

The income distribution for nearly 30 million families in the United States was supplemented by distributions for about 10 millions of single individuals and information about average incomes of "institutional resi- dents." The report indicates that the figures on family incomes are probably more reliable than those for the two other groups of consumers.

Special attention is given to the characteristics of the families and single individuals forming the "Three Thirds of the Nation." The lower third comprises families and individuals with yearly incomes of less than $780 and the upper third with incomes of more than $1,450.

The report gives evidence of a very careful study. The group of research workers in charge of it, headed by Hildegarde Kneeland, merits high praise for this valuable contribution.

HORST MENDERSHAUSEN Cowles Commission for Research in Economics

and Colorado College

Studies in Income and Wealth, Volume Two, by the Conference on Research in National Income and Wealth. New York: National Bureau of Eco- nomic Research. 1938. xii, 331 pp. $3.00. This is the second set of co-operative studies on the nature of income and

wealth, the first of which was reviewed in this JOURNAL in the issue of Sep- tember, 1938. The general plan is that of a series of conferences, the papers and discussions at which are here reprinted after correction. Much of the usual task of the reviewer has already been done in the book itself, for each essay except the final one has been thoroughly criticized. In style of writing it is, of course, heterogeneous, ranging from the verbosity of Kuznets, the obscurity of Copeland, and the ponderosity of Haberler to the simplicity and clarity of Bye, Hewett, and Blough. There is some question whether the subject of economics has yet advanced to the place where it can afford treatises which are such hard reading. Certainly the contents of this volume are highly theoretical. The National Bureau of Economic Research and the scholars here represented have, most of them, been engaged in practical statistical studies of wealth and income and apparently feel the need of just such discussion as is here developed. Together with the first volume, how- ever, this makes a rather long chain of deductive reasoning.

Unfortunately, the full value of the cumulation of discussion has not been realized. The contribution of the first volume, though often referred to, is as often overlooked. The same issues recur with little progress. The difficulty is that too many of the writers seem to be hobbled by at least one of the fun-

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* BOOK REVIEWS 435

damental biases of orthodox economics, even when they have freed them- selves from the others. Thus Copeland, even though he has thrown off the productivity concept of income, cannot get away from materialism, which deprecates the possibility of social value outside of physical objects.

Part one is "On the Measurement of National Wealth," by Simon Kuz- nets, with discussion by Bye, Colm, Copeland, and Martin. This paper by Kuznets is noteworthy for the cataloguing of the many variants of this concept. His skepticism concerning the importance of national wealth esti- mates is refreshing. Part two is "The Correction of Wealth and Income Estimates for Price Changes," by Copeland and Martin, with discussion by Bye, Fabricant, and Friedman. Part three is on "National Income, Saving, and Investment," by Haberler, with discussion by Copeland and Neisser. This paper by Haberler and the discussions thereon are concerned chiefly with the problem of the equality of savings and investment as posed by Keynes. Part four is on "Capital Gains in Income Theory and Taxation Policy," by Blough and Hewett, with discussion by Copeland, Groves, Kuznets, Simons, and May. This paper suffers somewhat from its dual au- thorship, embodying Hewett's definition of income as the flow of com- modities and services and Blough's careful argument for the taxation of accrued rather than realized gains. The answer to the vital question, how shall capital gains be treated in the measurement of national income and of changes in national wealth, falls somewhere between the two approaches. Parts five and six are shorter and have to do with Government income as a part of national income. The papers are by Means, Currie, and Nathan and by Nelson and Jackson.

The reader can only hope, as he wades through this mass of words and ideas, that the writers are, like himself, actually being stimulated to more logical and more concrete concepts and that their subsequent volumes, if any, will show some convergence of thought. It is a hard row which has to be hoed, but some strong men are here shown actually at work on it. In this volume they reveal, at least, the exceeding difficulty of the task of defining and measuring national wealth.

EDGAR Z. PALMER University of Kentucky

The National Income of Australia, by Colin Clark and J. G. Crawford. Sydney and London: Angus & Robertson, Ltd. 1938. viii, 120 pp. 3/6.

In this small publication the authors have presented subject matter which might well fill two large volumes. In the first part of the book, defini- tion of national income, methods of estimation, and results of the study for Australia are presented. The latter part of the publication deals with the relationship of the national income to public finance, investment and savings, the multiplier, and future policy. It would have been much more satisfying had considerably more space been given to the various topics, but credit

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