§ 5. Gratification of desire. We have already seen that there is in our desires for things an impulsive or an instinctive element. But with our growth through childhood into maturity, experience accumulates, and our choices among things and our desires for things come to have in them elements of memory, calculation, imagination, and reason. We desire an article of food partially because we have already tasted it and imagination recalls the sensation which it gave us. We desire a plow because our reasoning powers tell us that the plow will assist us in growing the crop which is to serve as food. So as we develop intellectually it comes about that judgment dominates our desires to a very considerable degree. Now if we have a desire for a thing, and succeed in securing it, a change takes place in our desire. This change we call gratification. (Or if the desire is completely met, we speak of the change as the satisfaction of the desire.) It is the sensation (feeling) which accompanies the getting of the thing desired.1

§ 6. The idea of income. Desire is a mental reaching out for things. The fulfilment of desire involves the securing of the objects of desire, and this brings us to the idea of income. We find the term used in a number of different senses. Income may consist of certain concrete goods which come in to a person during a given period - such as bread, butter, meat, clothing, etc., the quantity of which is expressed in physical units, such as bushels, pounds, yards, etc. A stream of goods of this sort is sometimes called "real" income in contrast with monetary {or pecuniary) income, which is a certain sum of money - or its equivalent in credit - received by a person within the period under consideration. If this terminology seems to imply that monetary income is less "real" than an income consisting of food, clothing, etc., the explanation is that a money income is but a means to an end. It is likely to be used to purchase all sorts of concrete goods - such as food and clothing - which are the real objects of desire. However, in the commercial world, and in ordinary life, we are very much in the habit of expressing income as a sum of money accruing within a period. This is perhaps the sense in which the term is most frequently used.

1 This is the sense in which we should regularly use the term in relation to valuation. But sometimes the word gratification is used to denote the pleasure of the senses which accompanies not the mere getting of the thing, but the using of it after it is secured - for example, the sensation which accompanies the eating of food, the listening to a musical instrument, or the looking at a picture. The gratification of desire at the moment of attaining a good reflects a provisional adjustment of choice, which is subject to correction by experience. As far as practice and judgment guide our desires, the ultimate use of a thing and the sensations which accompany that use, may be deemed to be the explanation of the desire. This does not mean that our processes of valuation are a cold calculation of the sensual gratifications to be obtained from goods. But it does mean that the anticipated use of a thing enters into our desire for it. And it means also that judgment, foresight, and calculation play their part along with instinct and impulse in our desires and our evaluations.

§ 7. Psychic income. A closer consideration, however, discloses the fact that there are many desirable results which cannot be included either under "real" or under "monetary" income. Many choices made by men are not directed to securing material objects. The term real income can hardly be strained to include the services of the hired laborer, the man's own direct services to himself, the valued social esteem which leads one to take a lower salary for harder work, etc. It is difficult to estimate such things in monetary terms or in terms of other concrete goods, and often the attempt to do so is not made. For we are dealing here with things which are in the realm of feeling. We may call them psychic income, and we may define the term psychic income as desirable results produced in the realm of feeling by valuable objects or by valuable changes in the environment which accrue to or affect an economic subject within a given period.

We have here reached something fundamental in our analysis. It is not merely that many items of income take this form and this form only - not being embodied in any tangible shape. But concrete, tangible objects (monetary or non-monetary), are regarded as income, as something desirable, just because their ultimate effect is to bring about such changes in the realm of feeling as we are now discussing. The food that we eat banishes the sensation of hunger. Clothing protects us from the cold, gives the feeling of being well-dressed, etc. The musical instrument creates, through our nerves of hearing, the pleasurable feelings of harmony. The beautiful picture, the automobile, the pleasure yacht - all the many kinds of concrete goods which man desires - are objects of desire to him because of their capacity to affect the sensory system, and, through that, his mental life. It is clear, therefore, that any adequate enumeration of the group of things which we call income must take careful account of these psychic elements. The estimate of a man's income merely in dollars may leave out items which are of the greatest significance to him. A man will work for a certain salary in an occupation that he enjoys who might refuse several times the amount in a less enjoyable or actually disagreeable line of work. A family may choose to live in a small house in a particular neighborhood, rather than in a larger house with greater physical comforts in a less attractive neighborhood. A girl who can live at home may accept what would otherwise be an inadequate wage - an income which would not support her if she lived elsewhere.

§ 8. Motivating force of psychic income. It may be seen that (anticipated) total psychic income is what motivates our economic activity - at least as far as this activity is determined by conscious purpose. There are men holding public office to whom the salary received is an insignificant consideration. They are paid largely in public esteem, or in their own consciousness of duty well performed. And in as far as men work for material rewards - money or goods - their ultimate ends are not material. They are in the realm of the psychic. Except to the miser, money is not an end in itself (if it is even in that case). Nor are stocks and bonds, or real estate, or even clothing and food, ends in themselves. Man's psychic life is the thing which is of ultimate concern to him, and all these things appeal to him because of their relation to that complex of sensations and feelings of which his psychic life is composed.

§ 9. The personal equation in psychic income. The magnitude of the stream of psychic income depends in large measure on the natural temperament, on acquired habits of life and thought, and on the state of health of the individual. One person gets delight from small things; another is miserable in the midst of luxury. In 1913 the richest man and wife in Switzerland committed suicide together because they felt that they had nothing to live for; whereas the mass of the hardworking Swiss with their scanty material incomes, are as joyous and contented as any people in the world. Nothing can equalize these subjective differences between individuals, but each individual, in his choice, compares things with reference to their psychic income-value to himself; he does not judge them merely by their physical or by their pecuniary measurements. But when in moralizing strain, we say that the source of happiness is within oneself, we speak within limits. For the most joyous and optimistic of persons must have some of "this world's goods" or life itself becomes impossible.

§ 10. Desire-streams and income-streams. It is not enough, however, that we should have a supply of goods at a given time; we need an "income stream." Our desires are nearly all recurrent. Hunger, tho fully satisfied, returns again. One circus does not last the boy a lifetime. New clothing quickly becomes old. We weather one storm only to feel an equal need of shelter from the next. To meet this series of desires and wants we require a pretty regular flow of goods and services.

"We may liken man's life to a journey in which the supplies of food and of other goods are got at the daily stations. If any one of these supplies fails, the traveler suffers the pangs of hunger, and if two or three supplies are at one point, they do not serve his needs so well as if distributed along the way. This almost unbroken inflow of certain kinds of goods is a necessity of existence. The savage dimly understands this need. Even the birds and the beasts adjust their lives to it by toil and by travel. The spring and autumn migrations to new feeding grounds are the attempts of the bird to secure this income. The ant, the bee, and the squirrel anticipate, and work to fill their storehouses against the days of need. Man has to take thought to provide the much more complex series of goods upon which his desires are directed.

§ 11. Goods of direct, present use. These goods are of many kinds, but we may give our first attention to the goods of present, direct use to secure psychic income. Such is food to the primitive man, a skin to wear over his shoulders, a club to defend himself against his enemies. Such, to-day, is the cup of coffee on the table, the fire on the hearth, the furniture, the house, the land used for playground, tennis court, park, the clothing we wear, and countless other objects in daily use. Thus in every case that a desire is gratified, whether of child or of man, of poor or of rich, the relationship may be traced between psychic income and goods of direct use. Warmth is to be had by the use of clothing, shelter, and fire; light is given by the candle, the lamp, and the electric light. All around men are things just ready to serve the final use of yielding enjoyment, or just on the point of "ripening" or becoming fitted to serve this end. These goods of present, direct use are the first and almost the only concern of the animal, of the child, or of the savage. To man in developed economic conditions these goods are still the immediate objective conditions to the creation of his psychic income.

§ 12. Directness of use defined. Directness of use is that quality a good has of yielding to its possessor its ultimate economic use (psychic income) without the physical intervention of any other agent (between itself and the user). Examples of goods having direct uses are food ready to eat, fuel to give warmth to the body, the candle to give light, a beautiful picture, a riding horse, clothing, ornaments, furniture, dwelling houses, general services of all kinds, such as the musician's song, the services of actor, teacher, lecturer, preacher, physician. When these uses and services produce psychic income directly (without the aid of any intervening agent), they are direct uses.2

2 The directness here considered must not be confused with immediate-ness in time. Directness here refers to the number of steps or processes that separate the good from the final use to the owner. It is the quality which an object has when it gives the sensual stimulus which results in psychic income. Time-value is the special subject of Part IV.