It isn't an argument about saving vs. spending, it's an argument about what, fundamentally, money is. Money is a temporary store of value. Imagine a world with

It isn't an argument about saving vs. spending, it's an argument about what, fundamentally, money is. Money is a temporary store of value. Imagine a world without it. How would commerce work? Via direct barter. Direct barter is inefficient, because you may have to engage in an entire chain of transactions in order to get the one good you are trying to obtain. That's money's purpose -- to make this more efficient. What Krugman is saying, and I think it's hard to dispute, is that a currency that incentivizes hoarding rather than transfer of temporary value is an extremely inefficient one, in terms of economic activity. And free markets hate inefficiency, right?