ABSTRACT
Those who criticize Irving Fisher for ‘confusing’ income with consumption miss the essential point of his argument. Business performance cannot be evaluated (either in prospect or in retrospect) without reference to the ultimate destination of all economic activity: consumption. That is why Fisher favours what he calls ‘measuring at the domestic threshold’ (1930: 9). ‘At the end of production economics, or business economics, we find home economics. … The domestic threshold is, in general, a pretty good line of division’ (1930: 10).
