Saving in a pure production process without monetary intermediaries is fundamentally a real, not a monetary, phenomenon. Without the capitalists, the owners of land and labor “save” real resources (e.g., time), and not in money (e.g., monetary wages and rents are assumed to be non-existent). Because the question of leisure forgone (which constitutes the saving under the current assumption where all factors are specific and there is no capitalist) implies time preference—and because time preference is subjective preference, it cannot be measured in monetary terms.
“Present consumption is given up in anticipation of future consumption. This restriction of present consumption is saving. In a world where products are all jointly owned by owners of factors, the original owners of land and labor must do their own saving; there is no monetary expression to represent total saving, even in a monetary economy. It is impossible for us to say what this saving or investment was in monetary terms.”
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Related:
- Leisure foregone is a cost—could’ve been otherwise
- On labor and leisure
- Time is critical element in any production process