Apparent and real causes of American prosperity

Abstract

The article compares the theory of saving, traditional in Europe, with the anti-saving theory formulated by Ford, which advocates spending all earning, thus stimulating production, raising the standard of living, and giving confidence in the future. The author shows that the two theories correspond to the different economic conditions prevailing in Europe and the United States. The Americans are not wealthy and optimistic because they spend all they earn: rather they spend all they earn and are optimistic because they are wealthy. The fundamental cause for the dazzling economic prosperity of the United States is to be found instead in the free contribution of wealth represented by the masses of emigrants, in the great majority Europeans, thanks to whom America has been saved the expense of bringing up a large part of her population.

JEL: E21