Money, Growth, and the Materialistic Society

Many people believe that advanced economies, particularly the U.S., are materialistic. We only care about things that are bought and sold. Everything is about markets. This is a complaint often levied against economists.

On page 214 of Man, Economy, and State, Rothbard argues something I have never heard in this exact way. When discussing the increase in production and goods that are possible in a monetary economy, Rothbard argues-

"As a matter of fact, the existence of the money economy has the reverse effect. Since, as we know from the law of utility, the marginal utility of a unit of any good diminishes as its supply increases, and the establishment of money leads to an enormous increase in the supply of exchangeable goods, it is evident that this great supply enables men to enjoy unexchangeable goods to a far greater extent than would otherwise be the case. The very fact that exchangeable consumers’ goods are more abundant enables each individual to enjoy more of the nonexchangeable ones." (emphasis in original)

His reasoning is simple diminishing marginal utility. Monetary economies are so rich that they care less about consumer's goods.

This is true for me. I am mostly interested in things that money cannot buy, experiences, relationships, and knowledge. However, 300 years ago, you can be certain I would be very concerned about basic consumer's goods.

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