Austerity Versus Public SpendingJanuary 1, 2020
37 Frugality increases the public capital and prodigality reduces it.
Capitals neither increase nor decrease when revenues match expenses. Some modes of expence contribute more to the growth of public opulence than others.
38 The person’s revenue may be spent in either=
- non-durable things which are consumed immediately, or
- The revenue spent this way daily can neither alleviate nor support the next day’s expence.
- durable things which can be accumulated.
- The revenue spent this way daily may support and heighten the effect of the next day’s expence.
For example, a rich man may spend his revenue either in=
- a sumptuous table while maintaining many menial servants , dogs and horses, or
- contenting himself with a frugal table and few attendants, but spend most of it in=
- adorning his house or country villa,
- useful or ornamental buildings,
- useful or ornamental furniture,
- collecting books, statues, pictures; or
- more frivolous things like=
- jewels, baubles, ingenious trinkets, or
- in amassing a great wardrobe of fine clothes.
- This is most trifling of all.
- Heinrich von Brühl did this.
The man who spends chiefly in durable commodities, would find his magnificence continually increasing. Every day’s expence would support the effect of the next day.
- He would have goods worth something.
The man who spends on unproductive things would not increase his own magnificence.
- He would be the poorer of the two.
- He would have nothing left.
- His 10-20 years of profusion would be as completely annihilated.
39 This way of spending by an individual is the same as that of a nation.
The houses, furniture, and clothing of the rich become useful to the inferior and middling ranks of people. They can buy them when their superiors grow weary of them.
When this mode of spending becomes universal among the rich, the society’s general accommodation is thus gradually improved.
In rich countries, the inferior ranks have good houses and furniture which=
- they themselves could not have built, or
- were not originally built for them.
The house of the family of Seymour is now an inn on the Bath road.
The marriage-bed of James I of Great Britain was brought by his queen from Denmark as a gift. A few years ago, it was the ornament of an ale-house at Dunfermline.
In some ancient cities which have been long stationary or have gone to decay, almost all houses are not occupied by the original inhabitants. Those houses have many excellent antiquated furniture which are still fit for use.
Noble palaces, magnificent villas, great collections of books, statues, pictures, and other curiosities, are frequently an ornament and an honour to the neighbourhood and to its country.
Versailles is an ornament and an honour to France. Stowe and Wilton to England.
Italy still continues to be venerated because of its monuments, even though=
- the wealth which produced them has decayed, and
- the genius which planned them has been extinguished, perhaps from not having the same employment.
40 The spending for durable commodities maintains more people than the spending for the most profuse hospitality.
Perhaps half of 300 pounds weight of provisions served at a great festival is wasted. It would maintain unproductive hands. It would increase prices or the exchangeable value of the national annual produce. If those provisions were employed instead in employing masons, carpenters, upholsterers, mechanics, etc. those provisions would be repaid in pennies and pound weights without losing a single ounce. It would maintain productive hands. It would not increase prices.
41 However, this does not mean that spending on durable goods always indicates more generosity than spending on hospitality.
When a rich man spends his revenue chiefly in hospitality, he shares most of it with his friends. When he employs it in buying durable commodities, he spends it on his own person. He gives nothing to others without an equivalent. A person is trifling, base, and selfish when he uses his revenue to buy frivolous objects such as ornaments of dress, furniture, jewels, trinkets, and gewgaws for himself. All that I mean is, that buying durable commodities= causes some accumulation of valuable commodities, and is more favourable to private frugality. Private frugality increases the public capital. The public capital maintains productive hands which leads to the growth of public opulence.