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162 Economics in One Lesson“Saving,” in short, in the modern world, is only another form of spending. Theusual difference is that the money is turned over to someone else tospend on means to increase production. So far as giving employment isconcerned, Benjamin’s “saving” and spending combined give as muchas Alvin’s spending alone, and put as much money in circulation. Thechief difference is that the employment provided by Alvin’s spendingcan be seen by anyone with one eye; but it is necessary to look a littlemore carefully, and to think a moment, to recognize that every dollar ofBenjamin’s saving gives as much employment as every dollar that Alvinthrows around.A dozen years roll by. Alvin is broke. He is no longer seen in thenightclubs and at the fashionable shops; and those whom he formerlypatronized, when they speak of him, refer to him as something of afool. He writes begging letters to Benjamin. And Benjamin, who continuesabout the same ratio of spending to saving, provides more jobsthan ever, because his income, through investment, has grown. Hiscapital wealth is greater also. Moreover, because of his investments,the national wealth and income are greater; there are more factoriesand more production.2So many fallacies have grown up about saving in recent years thatthey cannot all be answered by our example of the two brothers. It isnecessary to devote some further space to them. Many stem fromconfusions so elementary as to seem incredible, particularly whenfound in economic writers of wide repute. The word “saving,” forexample, is used sometimes to mean mere hoarding of money, andsometimes to mean investment, with no clear distinction, consistentlymaintained, between the two uses.Mere hoarding of hand-to-hand money, if it takes place irrationally,causelessly, and on a large scale, is in most economic situationsharmful. But this sort of hoarding is extremely rare. Somethingthat looks like this, but should be carefully distinguished from it, oftenoccurs after a downturn in business has got under way. Consumptivespending and investment are then both contracted. Consumers reduce