On Jan 29, 2016, at 2:45 PM, JOANNA A. wrote:
> It's investment, not consumption that drives an economy? Really?
Yes indeed. An economy is nothing but a social arrangement for producing the things we need to live. Only investment (in the broadest sense) allows us to produce more because humans produce through produced tools and produced knowledge (technology). Consumption as such never can increase our productive potential, but if it comes at the cost of productive investment (through unaccounted depreciation, foreign-trade deficit, environmental despoliation, military spending etc.) it can mightily decrease that productive potential. Especially under the capitalist mode of production where the consumption of the masses is regarded as negative (wages being the main cost of production) so that even the consumption of current products, let alone of increased output, depends on aggregate demand being supported by credit for spending on capital or inventory investment. Of course the operation of this *natural* law varies over space and time with every example of a real economic situation so that valid economic analysis has to be quite specific. As old Hegel once said somewhere, "Truth is always concrete."
Shane Mage
"scientific discovery is basically recognition of obvious realities that self-interest or ideology have kept everybody from paying attention to"