3.3 Productive Consumption

Productive consumption involves the destruction of some things as a means to produce other things that are more greatly desired. It may as well be simply called "production" or "transformation" as the intent of the action is not focused the item destroyed, but the item produced.

There are actions where no item is produced, but some are destroyed in the attempt to be productive. This net effect is the same as barren consumption, but the intent was to be productive, and as such it is different in its nature. The man who builds a factory with the intent to produce cloth is said to have engaged in productive consumption if he succeeds, barren consumption if he failed - but it is likely he did not set out on the adventure in hopes of achieving failure.

The process of production consumes more than the raw material that is a physical component of the good that is produced: it consumes also the productive agency of the laborer, some portion of capital in tools and equipment, the "intellectual industry of superintendence," and so on. Where any material input to production has itself been produced, the final product consumes the material, labor, etc. of producing it: the factory, in buying wool, consumes the labor, capital, and equipment of the farm.

Certain manufactures are considered to consume nothing, but this is only because the raw material is considered to be of no value: the glass-blower employs sand, which is plentiful and of little use - and so long as this remains true, and the supply of sand far exceeds all demand, it is not factored into consumption. This is just as the farmer who does not factor the cost of the sun or the rain upon his field into his costs.

The profit of he producer can thus be augmented not only by producing more, but by consuming less in the act of production: the seed-drilling method of farming consumes less seed corn than the broadcast method, resulting in less consumption (cost) to produce an equal amount of product. There are likewise methods for reducing the amount of labor or capital consumed by a productive activity.

Whatever the cause, the saving of productive agency operate in the short term to benefit the producer, increasing the profitability of his operation. In a competitive market, the decreased cost of production decreases the price of the product, which is a benefit to the community at large.

This is not without its losses: those "who do not learn to economize like their neighbors" lost their customers. A manufacturer who prefers to work "in a grand style with too costly and complex an apparatus" must consume more capital to produce, and cannot reduce the price of their product to the same degree as their competitors.

To the consumer, it is wasteful to pay more for a product simply because its producer lacked competence or stubbornly clung to inefficient means of production. Say likens the inefficient producer to the prodigal consumer, in the excess is wasted for his own personal gratification, gluttony, or desire for ostentation - perhaps worse still because he does not recognize that these vices are the basis for his expense and, ultimately, his downfall.

Given that much has been said on the topic of production, Say feels it is needless here to enlarge further on the topic of productive consumption - which ultimately is the same thing.