studies. Certainly the Mishan proposition on these grounds could at least lead to serious confusion. Even worse, however, is the fact that the sum of the Coimipensating Variations (or Equivalent Variations) for the series of price change from zero to some given market price does not equal the areas under the supply curve of the factor except in the limiting case referred to above; i.e., where the welfare supply elasticity of the supply of X is zero. Thus we would have two measures of total rent or welfare change neither of which, except under very unusual circumstances, would equal the payments traditionally viewed as rent.' Thus, following Mishan's suggestion would lead us to use a rent concept which would be botlh ambiguous and not directly related to factor payments. Such a concept would be of little value in the theory of cost and the theory of distribution which are concerned with specific payments. These are the very areas where the idea of economic rent is most useful. Consequently Mishan's suggestion should be rejected and a more traditional concept of rent retained.2 If the definitions of rent are left undisturbed, what type of concept can be employed to parallel consumer surplus? Since none of this is intended to dispute Mishan's claim that the Compensating Variation and the Equivalent Variation are good measures of the welfare change engendered by factor price variations there is no reason the CV and the EV cannot be used in this way. They merely should not be called rent. It should be sufficient merely to refer to the Compensating Variation and the Equivalent Variation as measures of welfare change resulting from factor price changes. If that is not adequate and a specific term is required, producer's could well be redefined in this manner-as the CV and EV. Such a definition would directly parallel Hicks' concepts of consumer surplus and the terminology would directly follow from Mishan's main theoretical contribution, namely, applying Hicks' consumer price change analysis to factor price variations.

I. Introduction, 263. — II. The basic model and some behavioral hypotheses, 264. — III. Wealth tax, 269. — IV. Income taxation, 270. — V. Special treatment of capital gains, 274. — VI. No loss offset, 275. — VII. Welfare implications, 279.

A NUMBER of studies have yielded evidence of significant association between certain characteristics of industry structuresuch as high concentration and substantial entry barriers and variations in industry performance, particularly with respect to profitability.* In general, these studies tend to confirm the expectation that, other things being equal, profits will tend to be higher in industries in which structural conditions depart substantially from those of the competitive model. However, as Stigler [16, p. 145] has noted, the statistical associations found are usually weak, and a substantial amount of performance diversity is left unexplained. Thus, the typical strength and character of the structure-performance associations, and the importance of individual structural factors in the overall pattern, have remained open to question. Many hypotheses have been suggested; only a few are subject to serious empirical investigation; fewer still have actually been examined. This paper presents a summary report on our efforts to test a small number of fairly straightforward structure-performance hypotheses against the most comprehensive collection of relevant data available, the concentration statistics for 1958 and 1963 [18, 19]. These tests have focused on a single performance measure, the percentage price-cost margin, which we take as an indicator of the ability of firms in an industry to obtain prices in excess of direct costs. We have found a significant association between the price-cost margin and the level of four-firm concentration among fourdigit SIC (Standard International Trade Classification) industries; and this association is not eliminated when differences in capital-intensity among industries are taken into account. We have further found: (1) a tendency for the strength of the concentration-margins association to increase over the period 19581963, particularly in industries in which the level of four-firm concentration was stable or increasing; (2) a substantially stronger association between concentration and margins in consumer goods industries, as compared to producer goods industries; and (3) evidence that the principal component of the concentration-margins association in consumer goods industries is a correlation between concentration and margins of the four largest firms alone, in those industries in which these firms have higher margins than their smaller rivals. The first section of this paper establishes the background and framework of our analysis, and the following sections present the evidence of these findings in some detail.

The article presents information towards a multi-level, multi-goal information system. Work in industrial operations research has been proceeding now for twenty years. A major by-product of this work is the concept of the firm as a complex total system, resembling a living organism rather than a machine. The relationship between firms and biological systems can, of course, be pushed too far. Transfer of theory from one discipline to another may provide nothing more than superficial analogies. The total system concept, however, is at least a picturesque way of saying that a firm is a set of activities that must be coordinated. A firm certainly is not alive, but it has to behave like a living organism. This desirable result will not be achieved without a great deal of work, unlike the situation in a living organism with its ready-made organization structure. Embedded in the organization structure of a living organism is its information system this too must be designed for the man-made firm. Investigation into productivity in British firms concluded that the most important determinant of a firm's potential for growth and improved efficiency is the ability of its management to lean about its environment. Like the operation of the thalamus, the accounting function both assists and controls the management group through the information it selects and transmits to it.

Debate on the question of correlation between taxable income and financial income has run "hot and heavy" for many years. Most individual accountants writing on this question argue that greater harmony, if not complete agreement, should exist between the two. The American Accounting Association (AAA) and the American Institute of Certified Public Accountants (AICPA) did not take official positions on the issue until some two decades ago. At that time, however, they agreed with the majority view. Most of these individuals and organizations emphasized that taxation principles should be brought more closely in harmony with generally accepted accounting principles, rather than the reverse. The method of accomplishing this objective was also dearly indicated. Instead of incorporating accounting principles and applications into statutes to make "book income" and "taxable income" identical products of legislative fiat, their recommendations have stressed that accounting concepts incorporated into statutes defining taxable income should be based on parallel accounting principles developed in the market place. In a word, accountants feel they should influence congressional action on tax matters, but that governmental agencies should not prescribe generally accepted accounting principles. The purpose of this writing has not been to convince the reader that all of the objectives sought by accountants with regard to taxation provisions are wrong. Rather, the object has been to convince the reader that in their present official posture the AICPA and the AAA are not Ekely to reach these objectives without serious consequences to the profession.

Auditing undoubtedly appeared shortly after man began to record governmental and commercial transactions for you have evidence that even the earliest records were audited. The first attempts to reduce transactions to some medium more permanent than memory probably took a semi-mechanical form. Man probably began a more formal recording of transactions in the dim past when trade between tribes increased. At first, pictures of the objects traded may have been used but by 5,000 B.C. symbols, mutually intelligible to tribes of diverse languages, had been developed. An early Mesopotamian civilization, the Sumerian, recorded commercial transactions on stone dating back to 3,600 B.C. and on day tablets beginning about 3,200 B.C. It is here that the auditor first gives concrete evidence of his existence and that you find the first examples of internal control. In ancient Egypt in the Pharaoh's central finance department, the "house of silver of the treasury," internal control and auditing were In use. Scribes prepared records of receipts and disbursements of silver, corn and other commodities. One recorded on papyrus the amount brought to the warehouse and another checked the emptying of the containers on the roof as It was poured into the storage building.