Book contents
- Frontmatter
- Contents
- List of Tables
- List of Diagrams
- Preface
- INTRODUCTION
- FOUR ASPECTS OF THE PROBLEM OF MEASUREMENT
- SOME ILLUSTRATIONS OF THE PROBLEMS OF MEASUREMENT
- XIV Social Accounting
- XV The Three Forms of Economic Activity
- XVI Transactions in the British Economy in 1948: an Example
- XVII The Derivation of the Example from Published Sources
- XVIII The Structure of Transactions and Some Important National Aggregates
- XIX The Group Structure of Transactions
- XX Systems of Transactions from the Viewpoint of Accountancy
- XXI Statistical Design in Social Accounting
- XXII Market Demand from the Viewpoint of Economic Theory
- XXIII Other Influences to be Taken into Account
- XXIV The Formulation of Market Demand Relationships
- XXV Statistical Problems
- XXVI Demand Analyses for the United Kingdom
- XXVII Demand Analyses for the United States of America
- XXVIII The Sources Used in the American Analyses
XX - Systems of Transactions from the Viewpoint of Accountancy
from SOME ILLUSTRATIONS OF THE PROBLEMS OF MEASUREMENT
Published online by Cambridge University Press: 05 June 2016
- Frontmatter
- Contents
- List of Tables
- List of Diagrams
- Preface
- INTRODUCTION
- FOUR ASPECTS OF THE PROBLEM OF MEASUREMENT
- SOME ILLUSTRATIONS OF THE PROBLEMS OF MEASUREMENT
- XIV Social Accounting
- XV The Three Forms of Economic Activity
- XVI Transactions in the British Economy in 1948: an Example
- XVII The Derivation of the Example from Published Sources
- XVIII The Structure of Transactions and Some Important National Aggregates
- XIX The Group Structure of Transactions
- XX Systems of Transactions from the Viewpoint of Accountancy
- XXI Statistical Design in Social Accounting
- XXII Market Demand from the Viewpoint of Economic Theory
- XXIII Other Influences to be Taken into Account
- XXIV The Formulation of Market Demand Relationships
- XXV Statistical Problems
- XXVI Demand Analyses for the United Kingdom
- XXVII Demand Analyses for the United States of America
- XXVIII The Sources Used in the American Analyses
Summary
In setting out to explain the structure of a system of transactions I took as my point of departure the primitive economic concepts of production, consumption and adding to wealth. We may think of production, to take an example, as mainly centred in business enterprises, but it is clear that not all the transactions of business enterprises will appear in the form of activity production in my system. For example, business enterprises will very frequently save something out of their income, and as we have seen all the saving in the system is represented by a flow from the form of activity consumption to the form of activity adding to wealth. In a similar way we may think of the form of activity consumption as mainly taking place in households, but again households may acquire assets, e.g. a family may purchase a new house and as we have seen all expenditure of this kind takes place between the form of activity adding to wealth and the form of activity production. Consequently we cannot identify the three basic forms of economic activity with any particular entities in the economic system, and accordingly the question arises: Is there anything else with which we can identify them? I shall now try to show that the three basic forms of economic activity are isomorphic with the three basic statements of an orthodox accounting structure.
An accounting structure for a business enterprise may be said to consist of a profit and loss account and a balance sheet. The profit and loss account may be subdivided into an operating section and a non-operating section, while we may form a third account by taking the differences in the entries between the balance sheets at the beginning and end of the period. I shall now try to demonstrate two things: first, that the transactions entering into the three forms of economic activity, production, consumption and adding to wealth, are isomorphic respectively with those appearing in the operating section of a profit and loss account, the non-operating section and an account summarizing the capital incomings and outgoings of the period, which in consolidated form would show the balance sheet differences over the period and which I shall call a resting account. Secondly, I shall demonstrate that this structure is fundamental to all entities and is in no way special to business enterprises.
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- The Role of Measurement in Economics , pp. 53 - 57Publisher: Cambridge University PressPrint publication year: 2013