Subsection (7) from incorporeal to intangible property and subsection (8) commodity market and debt market
This subsection 7 starts with a good summary of Commons thinking, "the institutional set-up gives us the idea of a going concern acting by means of inducements to participants in their forecasts of working, waiting, and risking, under rules that set limits to their bargaining, managerial, and rationing transactions. "(Commons. pg 423, 1034). A going concern is looking forward to transacting with other going concerns ( broadly defined). and here we get to a key point for Commons. The going plant, the production function in modern economics terminology, is churning out the goods and services under technical efficiency of the managerial transaction.
The going concern and the going plant are interrelated but also separable in their thinking and operations. This is a point he empathizes many times throughout the book. The going concern deals with scarcity and the changing ratios of assets and liabilities. The going plant is based on ratios of inputs and outputs and efficiency. He again points to the fact older economists had confused and double meaning of words. Wealth meant both things owned in a physical sense and things owned in a monetary sense but these are different concepts cost was both a monetary notion and a notion of physical inputs in a production process.
Translating between Macleod and Commons:
Macleod's particular credit was Commons incorporeal property with a specific lapse of time, a particular credit for Commons was a payment and performance required in a specific time period
Macleod's general credit was Commons intangible property with a flow of time and for Commons this was not a credit at all but a avoidance and forbearance or liberties and exposures in the bargaining process
Subsection 8 is about commodity and debt markets. Commons believes that confusion can be eliminated by thinking of price as the cost of legal transfer of rights. This covers both the commodity market and debt market. Commons believed that earlier economists were confused by the debt market where money itself was bought and sold. Commons argues that in fact stocks are debt owed to shareholders and the other part of the debt market is money market or bonds and similar debt instruments.
Again, Commons is mostly focusing our attention here on the fact that what is exchanged on markets is property rights and not physical things and this is crucial to understanding capitalism. The other key aspect is that its future income to be derived from the purchase of these legal rights that is the key to capitalism,
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