That this economy is, or was, consumption-based is revealed by the remedies now being proposed for its failure: stimulate, spend, create jobs. What is to be stimulated is spending. The government injects into the failing economy money to be spent, or to be loaned to be spent. If people have money to spend and are eager to spend it, demand for products will increase, creating jobs, industry will meet the demand with more products, which will be bought, thus increasing the amount of money in circulation, which will increase demand, which will increase spending, which will increase production—and so on until the old fantastical economy of limitless economic growth will have “recovered.”
But spending is not an economic virtue. Miserliness is not an economic virtue either, but saving is. Not wasting is. To encourage spending with no regard at all to what is being purchased may be pro-finance, but it is anti-economic. Finance, as opposed to economy, is always ready and eager to confuse wants with needs. From a financial point of view, it is good, even patriotic, to buy a new car whether you need one or not. From an economic point of view, however, it is wrong (and unpatriotic) to buy anything you do not need. Only in a financial system, an anti-economy, can it seem to make sense to talk about “what the economy needs.” In an authentic economy, we would ask what the land, what the people, need.
From an economic point of view, a society in which every schoolchild “needs” a computer, and every sixteen-year-old “needs” an automobile, and every eighteen-year-old “needs” to go to college is already delusional and is well on its way to being broke.
In a so-called economy that is dependent on indiscriminate spending, “job creation” often implies an ability to “create” new “needs.” Until lately this economy has been able to create jobs by creating needs. But this has involved much confusion and a kind of fraud. Because it gives no priority to the meeting of needs, and cannot distinguish needs from wants, our economy has confused necessities with products or commodities that are merely marketable. As a consequence, it deliberately reduces the indispensable economic service of providing needed goods to “selling” or “marketing” products, some of which have never been and will never be needed by anybody. The gullibility of the public thus becomes an economic resource. The category of things sold that are not needed now includes legally marketed foods and drugs. This involves the art (taught and learned in universities) of lying about products; a friend of mine remembers a teacher who said that advertising is “the manufacture of discontent.” And so we have come to live in a world in which every brand of painkiller is better than every other brand, in which we have a “service economy” that does not serve and an “information economy” that does not distinguish good from bad or true from false.
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