Stimulating By Saving
By John Tamny of Forbes
In his essential book The Wealth of Nations, Adam Smith observed that “Capitals are increased by parsimony, and diminished by prodigality and misconduct.” Or, put more simply, self-interested savers are an economy’s ultimate benefactor.
More modernly, Joseph Schumpeter noted that there are no entrepreneurs without capital. Innovative concepts are just that until they’re matched with funds offered by the parsimonious who, by virtue of their willingness to delay consumption, have the means to provide the financing necessary to turn an idea into a product.