Note 221-2 — Chapter I

That consumption and saving are not two opposites which exclude each other is one of Adam Smith's most beautiful discoveries. See Wealth of Nat., II, ch. 3. But compare Pinto, Du Crédit et de la Circulation, 1771, 335. Before his time most writers who were convinced of the necessity of consumption were apologists of extravagance. Thus v. Schröder, F. Schatz- und Rentkammer, 23 seq. 47, 172. Louis XIV.'s saying: "A King gives alms when he makes great outlays." According to Montesquieu, Esprit des Louis[TN 48] VII., 4, the poor die of hunger when the rich curtail their expenses. This view, which must have found great favor among the imitators of Louis XIV. and Louis XV. was entertained to some extent by the Physiocrates; for instance, Quesnay, Maximes générales, 21 seq. Compare Turgot, Œuvres, éd, Dare, 424 ff. On the other hand, Adam Smith, loc. cit. says that the spendthrift is a public enemy, and the person who saves a public benefactor. Lauderdale, Inquiry, 219, reacts so forcibly against the one-sidedness which this involves that he believes no circumstance possible "which could so far change the nature of things as to turn parsimony into a means of increasing wealth." In his polemic against Pitts' sinking fund as inopportune and excessive, he assumes that all sums saved in that way are completely withdrawn from the national demand. See per contra Hufeland n. Grundlegung I, 32, 238. Sismondi, N. P. II, ch. 6, with his distinction between production and revenu, is more moderate; the former is converted into the latter only in as much as it is "realized," that is, finds a consumer who desires it, and pays for it. Now only can the producer rely on anything; can he restore his productive capital, estimate his profit, and use it in consumption, and lastly begin the whole business over again.... A stationary country must remain stationary in everything. It cannot increase its capital and widen its market while its aggregate want remains unaltered. (IV, ch. 1.)