Maybe a better example would be that of a car. I buy a car, and theoretically, after I run it into the ground I have destroyed wealth. But, in the process I have created wealth by using my car to get to work, to produce, et cetera. It's an investment. In that sense, consumption is necessary to produce wealth.
This isn't Keynesianism. I am not proposing that government can stimulate aggregate demand, nor do I think that stimulating aggregate demand would "create wealth".
The example of the berries was one proposed by an Austrian economist himself. In his example he did not mention a destruction of wealth. Sure, the berries cease to exist. But their consumption allowed the production of the tool that will get Robinson Crusoe even more wealth.
Economic Thought (Latest Post): Don't Be Fooled by GDP
A.I'm really talking about actual destruction of wealth, like extreme specifics like building roads to nowhere and lavish parties for politicians.B.What does it take to run our government? Wages (paid to gov't employees) and buildings don't destroy wealth directly. There's office supplies, desks, chairs, computers, etc--right, those are all depreciating and are being destroyed over time, but how much could that possibly add up to??How is A any different from B?
Daniel Roe:Where is the wealth destruction?
There's wealth destruction in the opportunity cost of using privately owned tax dollars.
Roy Munson: A.I'm really talking about actual destruction of wealth, like extreme specifics like building roads to nowhere and lavish parties for politicians.B.What does it take to run our government? Wages (paid to gov't employees) and buildings don't destroy wealth directly. There's office supplies, desks, chairs, computers, etc--right, those are all depreciating and are being destroyed over time, but how much could that possibly add up to??How is A any different from B?
It's not, I was giving examples of what I was talking about.
Jonathan M. F. Catalán: But, the bananas have not been destroyed. They have turned into energy to allow Person A to continue producing. And so the banana should be represented as labor. This is where I'm getting at. There's a key difference between simply destroying and consuming in order to continue production.
But, the bananas have not been destroyed. They have turned into energy to allow Person A to continue producing. And so the banana should be represented as labor.
This is where I'm getting at. There's a key difference between simply destroying and consuming in order to continue production.
If the banana was used merely to facilitate production, then it was a capital good (factor of production), not a consumption good. If I eat an expensive meal that is more than I need for mere sustenance to continue producing, then it's consumption.
Or you might have in mind a terminology similar to Jean Baptiste Say http://mises.org/story/2981
"Consumption is the opposite of production: it is a destruction of values produced."
But then, "We do not wantonly destroy things of value: what end is proposed in doing so? Either to procure an enjoyment or else to reproduce another value." The latter he calls "reproductive consumption", which, "consists in the industrious destruction of one value, so as to produce another in place of that which is destroyed, and which exceeds it in value sufficiently to pay for the industry employed in the operation."
Diverting the production of services and goods from where consumers would want it to be, away from their effective demand.
To darkness I condemn you...
totally excellent comments thus far, I'd like to contribute by mentioning that as the benefits to investing in entrepeneural endeavours is eroded, by taxation and by regulation, there is a disincentivisation of entrepeneurial activity; so wealth that otherwise would have been created is never even brought into existance
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
There's also room here for the Hoppean time-preference argument; through taxation and inflation, the government can promote high time preference, thereby destroying the process of civilisation (which is built on savings/ low time-preference).
Effectively it's stealing from future humans.
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Think of it differently. The shoe isn't a consumable. It is a factor of production. It is capital formation. Without the shoes, the shoe's owner would find it hard to come and go. He would find it difficult to produce, therefore, and add to the communitie's wealth.
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