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Commenting on “Who are the real job creators” at Pragmatic Capitalism

September 9, 2012

Here’s a comment I posted on PragCap yesterday.  Follow the link to follow the thread.

Discussing the roles of consumer demand and producer supply in job creation.

“While a balanced approach is often reasonable, in this case I don’t think it’s correct. The role of the producer is more important. Here’s why. Suppose you, as the consumer have been paying $100 a week to commute to work on the train. If Henry Ford finds a way to mass produce the auto and reduces your commuting cost to $50 a week, he’s made you and every other consumer richer by the amount of these savings. As a result, you get your commute and extra wealth which you can save, invest, or consume even more.<br style=”padding: 0; margin: 0;” />Productive innovation makes consumers wealthier. Some of the newly created wealth is captured by the producer but most ends up as found money in the pockets of consumers. No wonder consumers will stand in line to save time or money!”

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