On the Motivations of Savings and Thrift
Thrift-the quality of using money and other resources carefully and not wastefully.
The motivations of Savings and thrift is the subtitle of John Nash’s works Ideal Money. It becomes relevant when we consider the thesis of Saifedean Ammous that bitcoin will inspire and foster a period of lowered time preference in which the general trend of the population will be to save rather than to spend frivolously (based on the idea that people today have higher time preference based spending because of the pressure of inflation).
We can counter this nonsense by introducing the concept of investing with a definition that is diametrically opposed to the concept of saving.
To further understand the device, we want to open up into the dialogue on bitcoin lowering time preference, the choice between saving our bitcoin or investing our bitcoin, with the definitions (for the words saving and investing) such that it would be nonsensical to suggest it could be possible to simultaneously spend and save one’s bitcoin.
It would be insincere to counter this by suggesting one could save some of their bitcoin while on the other hand spend some of their other bitcoin. This is not a proper counter point and a misunderstanding of the inquiry.
The Ammousian has been fooled by not properly considering cause.
Why does one save? Why would one choose to save versus investing in an investment that has a comparably positive expectation?
Should we want the need to save to increase or decrease over time?
Saifedean speaks to a society where low time preference is better than high time preference. Why should we want to live in a society where there is no better venture/investment than to hold on to money?
In an optimal society ‘money’, ‘savings’, ‘capital’, all move towards the opportunities with the highest expected return. We might save when we fear the unexpected future or because we have no better option for our wealth.
Here we have opened the inquiry….
What are the Motivations of Savings?
What are the Motivations of Spending?
There is not just one to consider for each.