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.
[i]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??[/i]
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.
“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.”
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
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).
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.