Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy — John Stuart Mill — John Shaqi
Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy
John Stuart Mill · en
If all persons were to expend in personal indulgences all that they
produce, and all the income that they receive from what is produced by
others, capital could not increase. Some saving, therefore, there must
have been, even in the simplest of all states of economical relations;
people must have produced more than they used, or used less than they
produced. Still more must they do so before they can employ other
laborers, or increase their production beyond what can be accomplished by
the work of their own hands. If it were said, for instance, that the only
way to accelerate the increase of capital is by increase of saving, the
idea would probably be suggested of greater abstinence and increased
privation. But it is obvious that whatever increases the productive power
of labor, creates an additional fund to make savings from, and enables
capital to be enlarged, not only without additional privation, but
concurrently with an increase of personal consumption. Nevertheless, there
is here an increase of saving, in the scientific sense. Though there is
more consumed, there is also more spared. There is a greater excess of
production over consumption. To consume less than is produced is saving;
and that is the process by which capital is increased; not necessarily by
consuming less, absolutely.
The economic idea of saving involves, of course, the intention of
using the wealth in reproduction. Saving, without this meaning,
results only in hoarding of wealth, and while hoarded this amount
is not capital. To explain the process by which capital comes into
existence, Bastiat has given the well-known illustration of the
plane in his “Sophisms of Protection.”(107)