310 PRINCIPLES OF RURAL ECONOMICS 



need to learn this lesson, because both are led sometimes to ignore 

 it ; but the evil results of this ignorance weigh most heavily upon 

 the poor, and they, therefore, have the best reason for knowing 

 this truth, which is, in a most literal and material sense, the truth 

 which shall make them free. The falsity of the proposition that 

 lavish expenditure makes work, and thus benefits labor, has been 

 demonstrated more frequently, probably, than any other economic 

 fallacy, and yet it is still occasionally heard. This is so clear as to 

 leave no room whatever for doubt or discussion in the mind of 

 any one who will follow the demonstration through. 



If I have a dollar to spend, and I decide to spend it for some 

 trifling luxury, I do, it is true, set labor to work producing that 

 luxury, or, more accurately, I encourage the industry which pro- 

 duces it ; but if I spend it for a tool instead of a luxury, I set labor 

 to work, to the same extent, producing the tool, or I encourage 

 the toolmaking industry. Therefore the two cases are equal up 

 to this point. There is this difference, however, when we carry 

 the analysis further : when I have bought the luxury and con- 

 sumed it, it is gone forever. I may get some ephemeral satis- 

 faction out of it, but it is destroyed as effectually as if it had 

 been burned or cast into the sea, so far as the rest of the world 

 is concerned. If, however, I buy a tool to help me in my work 

 of production, I am thereafter enabled to produce more and to 

 contribute more to the wealth and satisfaction of the rest of the 

 world. The rest of the world is to that extent the gainer by my 

 frugality and owes me accordingly. 



Even though I do not myself use the tool, but allow it to be 

 used by somebody else, the world's production of wealth and sat- 

 isfaction is thereby increased, and the new income which I receive 

 for the use of the tool is merely a partial return for the contribu- 

 tion which I have made to the increased productivity of the world. 

 This contribution is partially neutralized if I then consume my 

 new income lavishly ; but if I, in turn, invest this increased 



