ABSTRACT
The whole structure of incomes and opportunities in the capitalist world is very largely determined by the ‘institutional’ structure out of which it springs. It is not merely that the rich man’s pound exerts the same pull in the price process as the poor man’s pound, but that one man may be born poor and another rich. The existence of private property and inheritance, however, inevitably raises the question—which any critique of laissez-faire must answer—whether there is any justification, economic or moral, for the payment of the incomes to which these institutions give rise. The entrepreneur of genius is worth an incalculable amount to the community. Great entrepreneurs of this kind are of a value so great that it would be almost impossible to overpay them. The economic distinction between earned incomes on the one hand and property incomes on other thus coincides fairly closely with the legal one between earned and unearned incomes on which British income-tax is based.
