Spending Money and Production

A good friend of mine, Stephen Palmer, recently posted several excellent essays on his blog “The Cause of Liberty.” I highly recommend a look-see at these essays. One of my favorites is “The Deception of Consumption.”

This essay got me thinking and I’m just going to start throwing out thoughts and hopefully it will stimulate some intellectual exchange.

Is the spending of money consumption or production? I think that like most other acts, it is not inherently either one. Always assuming that there is no deception or coersion involved, when I spend the money, I am engaging in some sort of exchange. I am creating value with another party. However, when was my creation of value? Was it when I handed over the currency, or when I did what it took to earn the currency?

I am currently employed as a Detailer at a Steel Building Systems company. When I perform my duties as a detailer, I am creating value for the company. Because I have limited utility for a steel building, they instead engage in an exchange by giving me receipts (currency) for the value I created. These receipts are not really valuable for anything useful themselves, only as a medium of exchange because of what they represent - the value I created. I’m toying with the notion that the act of spending that money, no matter what for, cannot be a creation of value, only the consumption of it.

I think of Spiderman 2 when MJ gets mad at Harry and his solution is “I want to buy you something.” If I want to create value for someone, is there creation of value in purchasing something or in understanding what would create value for them and doing it. I submit that spending money is usually a lazy attempt at creating value. The creation of value could involve the spending of money, but it is not the spending of money that creates the value.