Journal Article A Note on Tautologies and the Nature of Economic Theory Get access T. W. Hutchison T. W. Hutchison Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 2, Issue 2, February 1935, Pages 159–161, https://doi.org/10.2307/2967564 Published: 01 February 1935

Introduction, 561.— I. Labor incomes, dividends and interest: all corporations, 563. — What is national income? 566.— Choice of a base for comparison, 571.— Dividends and interest payments vs. net earnings, 573.— II. The manufacturing industries taken separately, 575. — Further evidence on dividend payments, 581.— Corporate capitalization during the depression, 584.— III. Confusion of profits with interest and dividends, 585.— Different experience of these items, 586.— The fortunate exceptions, 590.— Computation of profits, 590. — Reduction in interest payments, 593.— Net profits in 1933 and 1934, 595.— Deficits, 599.— Conclusions, 599.

The statement that a teacher is satisfied with the results obtained in his course should be regarded as news, comparable, perhaps, to the statement that a man bites a dog, according to the author of this article. What he has to say, therefore, is not news, for he is thoroughly dissatisfied with the results obtained in the courses in auditing in his university. This should not come as a shock to teachers of accounting, for the author thinks, educators will all agree that the course in auditing is the most unsatisfactory course in the accounting curriculum from the teacher's viewpoint as well as from the student's. What the author has to say on this subject is not intended as a criticism of auditing textbooks. A textbook has limits, and within those limits the authors of the standard books have done an excellent job of presenting the fundamental principles of auditing and the methods of preparing audit working papers and reports. However, a need exists for something to supplement the textbook if teachers are to give the student a real grasp of the subject.

Reviews the book "Operating Results of Department and Specialty Stores in 1934," by Carl N. Schmalz.

Reviews the book "Modern Accounting Systems," by William D. Gordon and Jeremiah Lockwood.

Reviews the book "The Flexible Budget," by John H. Williams.

Some concept of income holds a prominent place in the consciousness of every individual. The very essence of economic activity is that of earning and enjoying income. As in the case, however, of many other terms of universal usage both in science and in business, the various concepts involved are confused and often conflicting. Even as a term used in technical economics, the definitions of income found in the writings of the leading authorities show pronounced differences of opinion. Income may be defined as the gain derived from capital, from labor, or from both combined, provided it be understood to include profit gained through the sale or conversion of capital assets. Net individual income is the flow of commodities and services accruing to an individual through a period of time and available for disposition after deducting the necessary cost of acquisition. Income in the broad sense all wealth which flows in to the taxpayer other than as a mere return of capital. Income or profit of a given period may be defined as the increase in proprietorship which has taken place during that period, making due allowances for any part of such increment as may have been distributed.

Reviews the book "Budgeting," by Prior Sinclair.

Reviews the book "Operating Results of Department Stores in the Pacific Coast States," by Carl N. Schmalz.

The editorial in the December issue of the journal The Accounting Review is entirely right in pointing out the importance at this time of a better development of accounting principles. Everybody engaged in accounting work, whether in teaching or practice, has the feeling that this is a crucial era for the profession and all its adherents. The fact that accountants are, as everybody hopes, on the eve of another great expansion of business activity, makes it urgently desirable that business take every step which may help to make the next period of prosperity healthier and more permanent than the last one. The work of the United States Securities and Exchange Commission is bound to have a vital influence in defining and giving effect to accounting principles. But when the editorial referred to uses this situation as a stick with which to beat the accounting profession, chides it for its tardiness and reluctance to submit itself to a prescribed discipline. The editor is entirely right in his primary contention. This matter cannot stand still. The principles, practices, and literature of accounting must be advanced and developed to the point of being more definite, more helpful, to all the interested parties.