"Producers, not consumers, are the engine of economic growth. Obviously, a producer must produce goods and services in line with what other producers require." So says Frank Shostak, and he is right! My new book, The Economics of Prosperity is an effort to explain the implications of this.
As I put it:
At the risk of sounding simplistic, an economic fact established since the beginning of economic thought is that wealth results from production. . . If wealth is a result of production, economic progress requires increases in productivity. Economic theory identifies four sources of economic progress: the division of labor, capital accumulation, technical improvement, and wise entrepreneurship.
If we desire economic prosperity, we need institutions and a culture that fosters these things, not policies that incite consumption.
