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Capital income
61. The income from capital has automatism on its side. It is levied at a stage
in production such that the worker does not receive the impression that what
belongs to him is being taken away, whereas the money distributed by collec-
tivities is derived in large part19 from direct or indirect taxation submitted to
rather than voluntarily accepted.
However, the income from capital acts in blind fashion most of the time and
often is not channelled towards the persons who are in greatest need of it - those
who do not form part of the labour force. The whole population shares in the
ownership of capital, including members of the labour force, and it is often
they who are in the best position to benefit from it. This drawback is mitigated
by the proportion which this procedure places in the hands of collectivities.
The latter, by serving as intermediaries, influence the distribution of income,
but the proportion accruing to them is small. The system of inheritance adds
further to the dilution of capital income among the population in general, a
dilution which is again offset in this case by probate duties levied by the State.
This dilution among the population is far from presenting only drawbacks.
Indeed, the possession of capital goes far beyond the right to receive an income
from it. Owners of capital can bring great influence to bear on the economy and
it would be dangerous were they to belong to one class of persons only, as, for
example, the aged. Besides, it seems hardly desirable that ownership of capital
should be out of contact with the labour force.
If we add that with this procedure it is impossible to distribute more than
25 % of the total currency placed at the disposal of the private citizen, recourse
to the third procedure would seem to be imperative.
62. It is none the less true that currency distribution effected through paying an
interest on capital is the method in use in numerous countries. The mechanism
the working of which we have just outlined is not very well understood, but its
connexion with demographic variables is clear. Marriage conditions, fertility,
death rate - all these have an influence on the way in which capital is distributed
between the different generations, and the legal methods used in this distribu-
tion have a reciprocal effect on demographic variables. This is a sector which
seems to have been unjustly neglected by demographers, and by economists
also. It is true that we lack precise data, and the patterns we can imagine very
quickly become complicated. So far, mathematical demography has failed to
undertake a systematic study of the relationship between the generations. One
of the results of controlling the endogenous death rate wil be the accumulation
of capital in the hands of the aged. Although from a social point of view we
can congratulate ourselves on this evolution, seeing that the money goes pre-
cisely to those who no longer receive a wage in exchange for work done, we are
entitled to be apprehensive about the effects which this concentration of capital
is bound to have on the investment policies in the various countries. With the
future evolution of the death rate these questions can be expected to become
one of the main studies of demographers and economists.