A. Principle of Clearing the Market

In the first two approximations, where the element of risk was considered absent, it was shown that the aggregate modification of the income streams of all individuals for every period of time was zero. What was borrowed equaled what was lent, or what was added by sale was equal to what was subtracted by purchase. The same principle still applies, for what one person pays, another person must receive. The only difference is that, in a world of chance, the actual payments may be quite different from those originally anticipated and agreed upon, that is, will often be defaulted, in whole or in part.