Do Savers “Take Resources out of Society”?

Revisiting a previous post, “Saving” ≠ “Saving Resources”*, wherein I question Scott Sumner’s notion that people who spend and consume more (save less) take resources “out of society.”

Try this:

John works for Debbie, and Debbie works for John.

They each start out with $100 in dollar bills, $200 total.

They pay each other in dollar bills: $100 a year, each direction.

Between them, through their labor, each year they produce $200 in real resources — things that humans can consume to derive human utility (or to produce more consumables in the future).

But: This year Debbie decides to save money, so she doesn’t hire John for as many hours, and only pays him $80. She leaves $20 sitting in her drawer; she doesn’t circulate it this year.

At the end of the year Debbie has $120, and John has $80.

Debbie has produced $100 worth of real resources, and John has produced $80 worth. $180 total, instead of $200 the year before.

Did Debbie “take those $20 in real resources ‘out of society'”? (Or was it John — lazy, feckless soul that he is — who didn’t do that $20 in resource-creation?)

We can certainly say that Debbie’s decision to leave the $20 sitting in her drawer instead of circulating (spending) it caused “society” (Read: John) to produce less resources than it would have if she had circulated (spent) it.

Is Debbie a “taker”?

Cross-posted at Asymptosis.

 

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