Breakthrough

Appendix C

Capital Investment and Income Generation

Capital is not only long lived but also income generating. By its nature, capital investment is intended to generate income. As the capital stock expands, and the service it renders grows, income generation grows as well. The resulting income, of course, is earned by the owners of capital, not labor. The long-lived nature of capital and its income-generating ability can result in prolonged period of capital income production. Consequently, a substantial shift in the distribution of income between labor and capital is observed in the deployment period.

As the stock of capital expanded over the 1944–1974 deployment period, the complementary of labor and capital increased labor’s income as massive ...