HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » General Discussion (Forum) » “Saving” ≠ “Saving ...

Tue Apr 9, 2013, 09:47 PM

“Saving” ≠ “Saving Resources”*

Many economists — mostly the freshwater/neoclassical/supply-side/conservative types, but also many on the left — hold in their heads a very peculiar model of how economies work. It’s a model of a barter/real-goods economy in which money only plays the role of convenience. ... That mental model, which is so widely prevalent, is a fundamental error of composition: confusing the individual with the aggregate. (And a confution of money-saving and real saving.) Sure, you’ve saved money for your (or your great-grandchildren’s) future. And when you don’t get a massage, others can sign up for that time slot, or buy a massage for a lower price. This is about competition among individuals, not how many resources we as a society produce and consume. If we all consume less, as a society we produce (and “save”) less — both for current consumption and for future production.

So in a very real (dynamic) sense, it’s the savers who are “taking resources out of society.” (And in a somewhat abstract sense, you can imagine those foregone resources being stored, hoarded, and rendered impotent in ever-growing and largely inert Cayman-island bank accounts.)

This is not really revelatory; I know these economists understand the paradox of thrift. But they ignore and eschew it in their real-good, barter-based mental economic models. I would suggest that the explanation for this error of composition is revealed by Scott’s words: “morally grotesque.” Moralistic beliefs about how individual humans should behave make it impossible for many economists to embrace an aggregate economic reality of which they are fully cognizant.

http://www.asymptosis.com/saving-≠-saving-resources.html

2 replies, 620 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 2 replies Author Time Post
Reply “Saving” ≠ “Saving Resources”* (Original post)
unrepentant progress Apr 2013 OP
PETRUS Apr 2013 #1
unrepentant progress Apr 2013 #2

Response to unrepentant progress (Original post)

Tue Apr 9, 2013, 11:02 PM

1. K&R

Reply to this post

Back to top Alert abuse Link here Permalink


Response to PETRUS (Reply #1)

Tue Apr 9, 2013, 11:36 PM

2. Thanks for the pity kick :D

Reply to this post

Back to top Alert abuse Link here Permalink

Reply to this thread