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> The saver, by exercising restraint and not consuming everything he produces, has contributed more to the economy by allowing the fruits of his labours to be i
by slig 8y ago
> The saver, by exercising restraint and not consuming everything he produces, has contributed more to the economy by allowing the fruits of his labours to be invested, increasing future productivity.
Is that so? I'm not so sure. How can we know that the spender didn't contribute more to the economy by spending 50k/year more on goods and services?
- logicchains 8y agoValue is created by production: someone has to make something before it can be consumed. To increase productivity, to increase the ability to produce more things, investment is needed, be it in research, infrastructure or education. If everything that is produced (the $100k worth of value) is consumed, there's nothing left to invest. More empirically, the fact that people are willing to pay the saver interest for his saving/investment demonstrates that it must be creating some value. That interest is essentially payment to the saver for refraining from consumption.
- slig 8y agoThanks, good point.
- konschubert 8y agoI don't think that a rich heir contributed THAT much more to society than, say, a poor Amazon warehouse worker.