Saturday, February 02, 2013

Money vs. Riches

We are frequently led into error by mistaking money for riches; we think that a people cannot be impoverished by a waste of money which is spent among themselves. The fact is, that men are impoverished only in two ways; either by having their gains suspended, or by having their substance consumed; and money expended at home, being circulated, and not consumed, cannot, any more than the exchange of a tally, or a counter, among a certain number of hands, tend to diminish the wealth of the company among whom it is handed about. But while money circulates at home, the necessaries of life, which are the real constituents of wealth, may be idly consumed; the industry which might be employed to increase the stock of a people, may be suspended, or turned to abuse.

Adam Ferguson, An Essay on the History of Civil Society (1767), Part V, Section V

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