There is some confusion about how the #market economy works. Simply put: production drives it, but #consumption is the intended outcome. It is false, but a common misconception, to think consumption drives it. It means one overlooks the core problem of economizing production,
which is solved by market allocation. Consumption as driver might apply for production for oneself, such as Robinson Crusoe on his deserted island, but it is different in a market setting. We do produce in order to consume, but we typically produce specific goods, which, through
sale, earn us an income that we can then spend on goods to consume. What goods do we consume? Those produced by others and acquired through purchases using the money we earned. This means our consumption, and what we wish to consume, is not the driver of the economy. Consumption
happens when we find suitable (and affordable) goods to consume, which were produced by entrepreneurs prior to our acting on our wants to consume. In other words, the number of goods made available to us facilitate consumption. We cannot consume what has not already been produced
and consequently production, undertaken for the purpose of facilitating consumption (and, when successful, earning the producer profit), drives the economy. In two ways: it facilitates consumption (which is, simply put, wants satisfaction) of that which is produced, and allows us
to, through our labor or entrepreneurship, earn the purchasing power with which we can purchase goods to satisfy our own wants through consumption. To say that consumption drives the economy does away with the production problem (or, more properly, the entrepreneurial problem) of
figuring out how to best satisfy consumers. But since this 'how' is not known, and even changes over time, consumption cannot 'drive' the economy. The production that (if successful) makes consumption possible, and aims to do so, is what directs our collective use of resources in
production, whether or not it turns out successful. The economic problem is production and core to this is the #uncertainty borne by entrepreneurs, who benefit from finding better (relative other entrepreneurs) uses for resources from the point of view of consumers. Production is
what creates the means to consume: the goods purchased, and the purchasing power received in exchange that can be used for purchase of other goods. This is, in effect, #SaysLaw, which Keynes tried to eradicate from economic theorizing and thereby misdirect our attention to the
"problem" of consumption. But there is no such problem: our personal choices for how to satisfy our own wants is not much of an economic problem. The production of the means, the creation of ways to satisfy wants, is the real problem. And the curious ability to produce toward
meeting consumers' future wants, which is what new production does, is core. Or, as Mises put it, entrepreneurship is the driving force of the market. Entrepreneurs benefit from making our lives better, from creating our future.
