Capital Consumption | The Impossibility of Statism

#economics #capital #statism

The market can’t operate without calculation. It will be difficult to view capital consumption when the market is distorted. Capital consumption occurs when consumption exceeds income. It’s called saving if consumption is less than income. Calculation is necessary to determine if there is consumption or saving. Chaos is brought about if consumption happens market wide. Capital consumption is impossible to view by a third party.

The business owners can reflect on their business, but no third party can. A business will shut its doors if consumption goes on too long. This can also happen economy wide. Distortions can cause capital consumption on a large scale. Crusoe can see if his net is wearing out, that doesn’t mean Friday can. He doesn’t need calculation to determine this. Calculation is necessary for growth in a modern economy.

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