Consumption fallacy

Not much technical stuff here, just my opinion, searchable, indexable, and hopefully readable until the sun burns out.

I don't know how many times I have read articles which maintain the fallacy that

1. The consumer and consumption are the largest part of any modern economy.
2. That most people in a developed society/economy exist to consume.
3. Without continued consumption the economy is going to crash and burn.
   

The whole idea forgets the fundamental fact that both parties have to produce something that can be exchanged!

Rather than using goods or barter, in modern economies that requires the use of money, which is the means of exchange i.e. two parties, one labeled the consumer are exchanging goods or services.
Read that again. Two parties are exchanging goods or services in any transaction.

Without the use of force, all transactions or trades (exchanges) are normally mutually beneficial to both parties, and vice versa, the exchange would NOT occur if this was not true.

So production always proceeds consumption. I provide DBA services, and receive money which I use to consume pizza. Money acts the tool to save me bartering fractional DBA services to the pizza man. Similarly money acts as a tool for the pizza man when he uses it buying salami.

Look at it from a different perspective.

Would you rather be the person who produces and sells 10 widgets for $1 each versus the person who produces and sells 10 million widgets for $1 each.
Who has the better purchasing power?
Who has the better consuming power?
Who is the most productive?
Green alternative answer: Who is the most corporately responsible, ethical and carbon neutral?

The only way a party can consume without producing is to

1. Use counterfeit money.
2. Broadly... live dependent on others. That includes the Government. Taxes are one form of an exchange using force i.e. pay tax or go to jail.

This is also the reason why economies which are awful are mostly due to those two point.
Wondering why dictatorships, socialist and communist societies suck? here's why
Welcome to lowest common denominator, why produce more or better when the products of your effort and skill are distributed without your consultation.

Before I don the flame retardant suit made from 100% asbestos, not being able to produce is a valid reason to be dependent on others. The easiest example of that is children.

So why have children? what service do children provide?

I can think of a couple of reasons:

1. Old age care, you are looking after them now and they will look after you then. This is in the face of the fact of government pensions and old age care. But again it takes more than 80 years to change deep ingrained cultural heritage.
   
2. You get to go to the toy shop and buy whatever toy you like!
3. Play lego again.
4. Experience the joys and sorrow of parenthood, so you can bore your children in your old age with their childhood memories (see point 1).
   

This is why there is (was) a stigma attached to being on welfare. If you are capable of producing anything, that is better than nothing. Anything is better than nothing.

Have Fun

Paul