3.2.2   Consumer Spend

(This is an archived page, from the Patterns of Power Edition 3 book.  Current versions are at book contents).

Consumers spend money on goods and services.  They may obtain that money from current earnings (derived from their participation in wealth creation) or from other sources of finance: savings, or benefit payments from the government.  Tax, health insurance and mortgage payments might have to be deducted from their earnings before they are free to spend the remainder – their so-called disposable income – which enables them to buy what they want.  Their freedom of choice has several considerable advantages:

·      Their purchasing decisions reflect their personal preferences, not what someone else thinks they might want.

·      People's tastes keep pace with modernity – and partly define it.

·      People's purchases can reflect their cultures in a pluralist society.

Economic governance is more acceptable as it increases people’s disposable income, and therefore their opportunity to choose for themselves.

People’s desire to have money to spend is a powerful incentive to earn money, whether through employment or by being self-employed.

Consumer spend is important in providing customers for those who want to create wealth.  When consumers choose to spend their money immediately, rather than save, they boost economic growth. 

© PatternsofPower.org, 2014