I always promote liberty around my friends, and one of them is asking:
“If Ron Paul is promoting saving, NOT consuming, wouldn’t it be contradictory with his views about free-market capitalism, which in essence (in order to function), NEEDS consumption in the first place?”
I think it for a while, and don’t have a straight answer about this. Anyone who can help me on these? A quote from an Austrian’s will be greatly appreciated!
This would only make sense if Ron Paul (or more widely the Austrian school) advocated stopping all consumption for saving. As nobody has suggested that, this criticism doesn’t make sense. Of course, consumption is required, all the Austrian school proposes is that the cause of economic growth is saving.
Austrians don’t promote savings, they promote the individual deciding what to do with his property. If they want to save it, they should go ahead. If they want to spend or consume it, that’s also fine.
Ron Paul advocates sewing your pockets shut, no new fiat money in, all silver on lockdown.
What banned said.
Tell your friend that consumption requires prior production, and production requires prior savings. When you do things in that order, purchasing power remains steady and living standards rise. When you indulge in consumption without prior savings, you get inflation and declining living standards. By “promoting savings,” Dr. Paul is just being pithy. We HAVE to consume to stay alive.
No, what liberty student said.
Um, I’m pretty sure that “CONSUME! CONSUME!” is the refrain of the Keynesians, not the Austrians.
Isn’t saving just consumption in the future?
Some savings can be certainly used for future consumption, but I would dare to suggest that most savings are intended for future investment