Gottfried Haberler, “Discussion III: Reply on National Income, Saving, and Investment” (1938)

Haberler’s brief discussion contribution clarifies the definitions underlying disputes about saving, investment, and national income. After acknowledging broad agreement with Professor Neisser and declining a detailed reply, he concentrates on Dr. Copeland’s criticisms. His central distinction is between adopting an accounting convention and establishing an economic fact: equality between saving and investment follows from particular definitions, not from definitional consistency as such.

Copeland identifies investment with increases in assets and saving with increases in equity on a consolidated national balance sheet. Haberler challenges the status of this claim:

I submit that this is not a fact, but a proposal for a convention about the use of the two terms.

The objection does not establish that Copeland’s convention is unusable. Rather, it denies that his terminology is universally accepted or logically obligatory. Haberler separates consistently defining concepts from consistently applying Copeland’s chosen definitions:

There are consistent definitions of S and I that do not make them equal.

This distinction limits what accounting identities can establish. Haberler likewise treats Copeland’s objection to Ohlin’s ex ante analysis—the assumption that people continually formulate budgets—as a matter of degree rather than a decisive refutation. Conceptual schemes must be assessed for their fit with conduct and usage, not merely their internal coherence.

The reply then turns to Robertson’s terminology. Haberler accepts that some definitions classify workers’ temporary cash holdings between wage receipts and expenditure as saving. His objection concerns the departure from ordinary meaning:

I only say that this is in conflict with the unsophisticated everyday usage of the term.

He nevertheless defends Robertson’s framework against Copeland’s charge of contradiction. The decisive move is to distinguish today’s disposable income, defined as yesterday’s earned income, from today’s earned or received income. Haberler’s algebra shows that investment minus saving equals the increase in earned income from yesterday to today. He interprets this relationship as giving precise expression to the connection between investment financed otherwise than through voluntary saving and inflation.

Copeland’s apparent contradiction arises, Haberler argues, from calling today’s earned income “disposed income.” That substitution obscures the temporal distinction on which Robertson’s definitions depend. Additional spending financed from hoards or newly created money need not come from today’s disposable income; it becomes earned income today and disposable income tomorrow. Receipt, availability for disposal, and actual expenditure must therefore remain conceptually distinct.

The concluding clarification rejects Copeland’s attempt to treat disposable income as an anticipated or budgeted magnitude:

'Disposable income' is an ex post concept, as can be easily seen by substituting for it its definition: earned or received or actual income of the 'day' before.

The contribution’s relevance lies in its disciplined separation of accounting convention, ordinary usage, temporal classification, and behavioral assumptions. Haberler neither insists on a single obligatory definition nor grants definitions explanatory powers beyond their scope. His reply shows how an apparent economic contradiction can instead arise from shifting the meaning of income within an argument.