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A TREATISE ON MONEY

BK. Ill

system, this is not so, and there will be a positive ornegative balance of wealth in the form of monetaryclaims for or against the country. Thus when we areconcerned with the wealth of a part of the total systemunder consideration, whether the part is an individualor a country, we have a fourth category, namely, thenet balance of claims on money, which we will callLoan Capital.

The aggregate of the Real Capital and the LoanCapital we shall call the amount of Investment—which, for a Closed System, is the same thing as theamount of the Real Capital; and the value of theaggregate of Real and Loan Capital is the Value of theInvestment. The increment of investment in anyperiod is the net increase of the items belonging to thevarious categories which make up the aggregate ofReal and Loan Capital; and the value of the incre-ment of investment is the sum of the values of theadditional items (minus, of course, the value of theitems by which, in any particular case, the stock hasbeen diminished ). 1

There is, however, still a further distinction, namelythat between the production of Capital-goods and theproduction of Consumption-goods, of which we shallmake more frequent use than of the above in theensuing pages. We define the output or productionof Capital-goods during any period as being the in-crement of Fixed Capital plus the increment of Work-ing Capital which will emerge from the productiveprocess as Fixed Capital; whilst that of Consumption-goods during any period is defined as the flow ofavailable output plus the increment of Working Capital which will emerge as available output. Finally, theoutput or production of Investment-goods during any

1 This enables us to clear up a point of definition which seems to meto have been unsatisfactorily handled by Prof. Pigou in the Economics ofWelfare (3rd Edition), part i. chap. iv. The value of the National Dividendduring any period is the value of the current consumption plus the valueof the increment of investment as defined above.