3.2 The Effect of Consumption in General

The effect of consumption of any kind is the extraction of value from the article consumed. This is an invariable and inevitable consequence that should never be forgotten in considering consumption.

Unproductive consumption does not reproduce its value to be consumed again by others, but generally achieves the satisfaction of some want. It might also be reasoned that productive consumption does create a value to be consumed by others, but generally satisfies no want of the producer.

Sometimes a producer is the consumer of his own product. The farmer eats his own vegetables; the tailor wears his own clothing. Where men want nothing that they cannot produce, there is little need of commerce. However, it is generally true that each man wants some combination of things, some of which he can produce and other of which he cannot.

Seen in this light, it is barter and trade that encourage acts of production, which enable each man to produce those goods at which he is most efficient. The producer has no need or want for the object he produces but does not consume, but seeks to trade these objects for the products of others that he does mean to consume, seeking equal value in the exchange, using money as a token of exchange between specific items and unspecified ones.

On the topic of money, there is a reason that when we speak of money that has passed from our hand to another, we say that this money is "spent" rather than "lost." It is gone from us, but has fetched back an equivalent value in other things. It is likewise the distinction between money that is "earned" and money which is simply "gotten" that money comes to us by virtue of production and trade. (EN: Though there are incidents in which money is in fact gotten and lost, these tend to be unusual compared to those in which it is earned and spent.)

Those who chastise men for their hedonistic behavior overlook this. A man who consumes a rich meal for his own pleasure is said to destroy value that might have been more productively used by others, if you conveniently ignore that the pleasure of the meal was purchased with coin he earned by producing value for others, in equal measure to his own consumption.

Those who have capital for which they have no immediate use may conserve it for future use, or lend it to those who can make productive use of it. His wealth is not consumed by loaning it to others, but invested in productive activity, and some portion of the product returned to him as interest, which is like savings used to satisfy his future wants.