THE purpose of the present article is to clarify and suggest improvements in national income and product concepts as used particularly by the Department of Commerce. In developing the proposals, major problems of definition, duplication, and conceptual difficulty will be presented, together with a brief survey of the development of ideas, including some of the recent debates which focus attention on unsettled questions. Broad relations between the national income and product series developed by the Department of Commerce are indicated in Chart i, the various bars being drawn approximately to scale, as of I952.1 In national income accounting the emphasis on net value added by, or income accruing to, the various economic factors, as a result of productive services currently rendered, is well understood. On the whole this represents current money income (with some imputations), but it omits three important money income items: realized capital gains (losses), unproductive transfer payments, and government interest. It also omits one imputation of major significance: the value of housewives' services. Of the two main subdivisions of what are regarded as nonproductive government outlays, transfers and government interest, the latter was shifted from productive income in the official revisions of July I947. These conventions and changes, though generally recognized, are by no means universally accepted by specialists in the field. In fact, some of them are receiving renewed discussion in recent debates.2 All the factor shares on productive account are now entered in the Commerce national income totals before direct taxes are deducted. The addition of indirect taxes and depreciation or capital-consumption allowances raises these net totals to the Commerce gross national product totals, but this development has created confusion over the meaning of net product and the extent to which double-counting is involved in the gross totals.3 The Commerce Department also takes the national income as a base for developing its personal income series. By subtracting corporate profits (before direct taxes are deducted but after dividend allocations) and adding transfers and government interest (in the main), the Department secures a mixture of productive and nonproductive items of personal income and savings. Realized capital gains and losses are still omitted however.4

NOT long ago it was stated with some emphasis that a seeming impasse in value theory has been reached, that the systems and points of view of five leading contemporary Anglo-American economists, considered representative and outstanding in England and the United States, are rather bewildering in their contradictions and lack of concordance, and that way out is in sight.' The way out, if there is one, is assuredly the path pursued by other sciences in shaking off the incubus of pseudo-scientific method in the course of their development: by the geometers of ancient Greece who, following the analyses of Aristotle and Plato, freed themselves from Pythagorean mysticism in establishing the system of Euclid; by William Gilbert, who much later proved by painstaking experiment that neither goat's blood nor garlic had anything to do with the phenomena of magnetism; by Francis Bacon, who pled with his contemporaries to cease spinning laborious webs of learning out of no great quantity of matter, and test their ideas against the actual facts of experience; by Robert Boyle, who urged students of chemistry to write plainly and unostentatiously about their experiments and thereby keep men from being stunned, as it were, or imposed upon by dark and empty words. If an impasse has been reached in value theory, it may not seem wholly unwarranted to venture the suggestion that this phase of economic study may be in about the same position today that mathematics was in the days of Pythagoras, that physics was in the days of Gilbert, or that chemistry was in the days of Bacon and Boyle. These sciences have passed their periods of impasse and are making steady headway because they have learned to distinguish the scientific from the pseudo-scientific, to regard hypotheses as tentative and of existential worth unless or until verified, and to eschew dogma of whatever variety. Such reflections, it should be added, if pertinent at all, are meant to apply mainly to value theory with its subjective implications, and not

Joseph Mayer, Harold G. Moulton, Meyer Jacobstein, Lewis H. Kimmel, An Appraisal of Criticisms of the Brookings Institution Estimate, The Review of Economics and Statistics, Vol. 27, No. 4 (Nov., 1945), pp. 189-191