The total income of a country is necessarily the consideration of its production In the same way as Robinson Crusoe's income is necessarily the fruit of his labor and more or less generous nature. In this sense, at the aggregate level of the national economy, national income and national product are two sides of the same magnitude. At the individual level, the economic return is the return for the contribution of the agent to the overall force production. In an economy in kind, product and income are identical. In a monetary economy, the economic agent must be in monetary form the exact counterpart of what he produces. However, in reality, an exact estimate of this magnitude is problematic. If you ask any person, he still believes that his income is insufficient and does not earn what he really deserves. In the modern economy, production is a phenomenon socialized in the sense that, because of the sectoral division of labor increasingly thin - between business and the company itself - no one can produce isolation without the assistance of other economic actors (private and public).
The main actors in modern economic system are those that provide inputs (capital, labor, raw materials, skills) and those that combine within a company (the contractor). The mobilization of production factors in the company results in the creation and distribution of economic returns. Thus, the process of production of wealth is in the same time a process of distribution of wealth in the form of direct and indirect distribution of income.
Income, which is independent of any productive effort is seen as an annuity. All other forms of income refers to an economic act. Thus, wages remunerated work, the latter can be manual, physical or intellectual. The interest remunerate the contribution of capital through the banking system (indirect funding). The dividend remunerate the contribution of capital through financial markets (direct financing). These revenues are essential because without capital injection, the activity could be financed and no jobs would be created. Finally, profits remunerate the contractor.
From the moment we assume that all these revenues are the result of a decision and an act of economic, they are all necessary and legitimate. If a worker does not receive a salary equal to his productivity, there is a risk of demotivating the worker can leave at any wage proposal more attractive. This turnover represents a cost to the company since an experienced worker contributes to the overall performance of the company. The worker is more competent, more it mobilizes human capital that he had himself acquired after a training process is often long and expensive. But the reverse is also perilous risk of overpaying an employee because of poor competency evaluation real.
Similarly, an economic actor must pay interest if he wants to borrow money, if he wants to be credible in the literal sense (for credit). Honoring the debt service is an integral part of the credibility that allows the company to raise funds. Do not pay its debts contributes to jeopardize the whole system of intermediation without which we could finance the investment, which means to accurately assess credit applicants. For the same reason that the listed company should also pay dividends if it wants to keep the confidence of its shareholders, without which it could increase its capital. Officials must receive treatment that reflects their ability to operate a public service without which the market economy could not operate (including services related to security, peace and justice to guarantee the proper functioning of the rule of law ). Insofar as the financing of these treatments is through taxation, public service efficiency is a prerequisite for a fair and efficient tax. In the opposite case, economic agents will be subject to levies while increasing risk of facing public services inadequate or ineffective.
Finally, without adequate profits, no entrepreneur would embark on this process highly risky combination and recombination factors. This process of allocation of factors within the productive organization is efficient yet at the heart of the functioning of the economy.
A key question remains: Is the legislature in a position to fix wages, control the profits of regulated interest rates or dividends without jeopardizing the economic equilibrium which emerges necessarily the formation of all forms of income?
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