KUZNETS, SIMON. National Income and Its Composition, 1919-1938. Vol. I, pp. xxx, 387; Vol. II, 388-929. New York: National Bureau of Economic Research, 1941. $5.00
| Date | 01 May 1942 |
| Published date | 01 May 1942 |
| Author | James G. Smith |
| DOI | 10.1177/000271624222100161 |
| Subject Matter | Articles |
222
shallian
diminishing-utility
analysis
lends
itself
to
monopolistic
competition
far
bet-
ter
than
indifference-curve
analysis,
the
author
suggests
a
third
alternative,
namely,
&dquo;to
develop
a
theory
of
choice
in
terms
of
a
cardinally
measured
preference
index,
in
other
than
utility
terms.&dquo;
Dr.
Norris
be-
lieves
this
to
be
an
improvement
upon
the
concept
of
utility,
since
the
measurement
is
in
objective
terms;
that
is,
&dquo;the
maxi-
mum
amount
of
money
which
a
person
would
give
for
a
good
rather
than
do
with-
out
it
can
be
used
as
a
measure
of
relative
preference.&dquo;
In
the
last
chapter,
&dquo;Social
Objectives
Related
to
Consumer’s
Demand,&dquo;
Dr.
Nor-
ris
discusses
what
she
considers
to
be
the
&dquo;major
defects
in
the
way
our
society-
America
today-meets
its
consumers’
de-
mands.&dquo;
It
is
the
opinion
of
the
reviewer
that
all
readers
will
find
the
author’s
dis-
cussion
in this
chapter
provocative;
espe-
cially
will
this
be
true
of
the
growing
group
of
economists
who
claim
to
be
interested
in
the
consumer.
Part
One
and
the
majority
of
Part
Two
will
interest
only
those
readers
who
are
thoroughly
trained
in
economic
theory.
HELEN
G.
CANOYER
University
of
Minnesota
KUZNETS,
SIMON.
National
Income
and
Its
Composition,
1919-1938.
Vol.
I,
pp.
xxx,
387;
Vol.
II,
388-929.
New
York:
National
Bureau
of
Economic
Research,
1941.
$5.00.
The
statistical
results
presented
in
these
two
volumes
are
based
upon
thoroughly
studied
conclusions
with
respect
to
all
con-
troversial
matters
of
definition,
classifica-
tion,
and
method
of
estimate.
For
example,
it
may
be
argued
that,
when
national
in-
come
is
defined
to
include
all
products
of
the
business
and
public
economy
but
to
ex-
clude
most
products
of
the
family
economy,
comparison
of
national
income
at
one
time
with
national
income
at
another
time
may
measure
to
a
confusingly
incalculable
extent
changes
in
the
economic
system
or
the
ex-
tent
to
which
formerly
free
goods
have
come
to
be
scarce
goods.
Such
difficult
problems
have
been
weighed
and
the
best
possible
solutions
adopted,
and
the
author
would
admit
that
to
some
extent
the
final
results
will
in
fact
do
what
the
critics
might
predict;
but
when
used
for
relatively
short
periods
of
time,
such
complications
may
be
of
comparatively
small
importance.
The
author
admits,
moreover,
that
much
de-
pends
upon
the
use
and
interpretation
of
the
statistics
of
national
income,
and
he
cau-
tions
against
their
misuse.
When
the
large
degree
of
qualitative
judgment
as
to
the
significance
of
the
sta-
tistics
on
income
is
thus
recognized
by
the
author,
it
is
unfortunate
that
in
his
defini-
tions,
concepts,
and
methods
of
estimate,
he
depended
mainly
upon
the
macroscopic
pattern
of
economic
analysis
characteristic
of
monetary
theorists,
and
ignored
the
mi-
croscopic
and
qualitative
type
of
pattern
used
by
the
economists.
The
concept
of
savings
and
investment,
and
the
concept
of
capital
assumed
by
the
author,
com-
promise
with
the
classical
theories
that
made
use
of
the
factors-of-production
cate-
gories,
involving
a
goods
concept
of
capi-
tal
rather
than
a
valuation
concept.
Meth-
ods
of
measuring
savings
and
investment
compromise
with
the
classical
attempt
to
correlate
personal
savings
with
capital
formation
in
spite
of
the
fact
that
modern
statistics
lead
to
the
practical
conclusion
that
no
such
correlation
exists,
and
modem
value
and
price-system
theories
lead
to
the
analytical
conclusion
that
no
such
correla-
tion
exists.
The
&dquo;deflated&dquo;
indexes
of
national
income
and
of
savings
from
year
to
year
over
a
period
of
time,
which
are
presented
in
addi-
tion
to
the
unadjusted
indexes,
may
have
some
esoteric
significance,
but
people
do
not
live
in
a
world
in
which
their
incomes
and
savings
are
stabilized
for
them
by
the
trick
of
&dquo;statistical
deflation.&dquo;
On
the
contrary,
while
price
trends
are
rising
individual
and
the
aggregate
savings
are
augmented
by
the
mere
price
rise
(purely
as a
result
of
the
valuation
process),
and
in
periods
of
falling
prices
vast
quantities
of
private
and
aggre-
gate
savings
are
wiped
out.
These
changes
have
more
than
statistical
significance
in
spite
of
the
fact
that
they
may
occur
purely
as
a
result
of
changing
market
valuations.
An
interesting
example
of
results
that
flow
entirely
from
definition
is
the
fact
that
the
net
savings
of
the
National
Gov-
ernment
are
shown
to
be
positive
through-
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