Economics Dictionary of ArgumentsHome
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| Saving: In economics, saving is defined as the portion of disposable income that is not consumed._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Jeremy Bentham on Saving - Dictionary of Arguments
Rothbard II 51 Savings/laisser-faire/Bentham/Rothbard: In his appendix to the Defence of Usury(1), Bentham restates and sharpens the Turgot-Smith defence of savings. Savings results in capital accumulation: ‘Whoever saves money, as the phrase is, adds proportionately to the general mass of capital... The world can augment its capital in only one way: viz by parsimony.’ This insight leads to the principle that ‘capital limits trade’, that the extent of trade or production is limited by the amount of capital that has been accumulated. In short: ‘the trade of every nation is limited by the quantity of capital.’ The laissez-faire implication, as Bentham saw, is that government action or spending cannot increase the total amount of capital in society; it can only divert capital from free market to less productive uses. As a result, ‘no regulations nor any efforts whatsoever, either on the part of subjects or governors, can raise the quantity of wealth produced during a given period to an amount beyond what the productive powers of the quantity of capital in hand... are capable of producing’.(1) Rothbard II 52 Rothbard: In the course of the Defence, there are hints of valuable analysis. Lending is defined as ‘exchanging present money for future’, and other intimations of time-preference or waiting as a key to saving include such phrases as the saver having ‘the resolution to sacrifice the present to [the] future’. Bentham also intimates that part of interest charged includes a risk premium, a kind of insurance premium for the risk of loss incurred by the lender. [In] the unpublished ‘Manual of Political Economy’ (1795)(2), Bentham continued the laissez-faire theme of ‘No more trade than capital’. The government, he emphasized, can only divert investment funds from the private sector; it cannot raise the total level of investment. ‘Whatever is given to any one branch, is so much taken from the rest... Every statesman who thinks by regulation to increase the sum of trade, is the child whose eye is bigger than his belly.’ >Inflation/Bentham. 1. Bentham, J. 1787. Defence of Usury; Shewing the Impolicy of the Present Legal Restraints on the terms of Pecuniary Bargains, (1786–87). London. 2. Bentham, J. 1795. Manual of Political Economy._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Benth I J. Bentham An Introduction to the Principles of Morals and Legislation Mineola, NY 2007 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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