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Jean-Baptiste Say on the Millionaire Next Door

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A man is not rich because he pays largely; but he is able to pay largely because he is rich. It would not be a little ridiculous, if a man should think to enrich himself by spending largely, because he sees a rich neighbor doing so. It must be clear, that the rich man spends, because he is rich; but never can enrich himself by the act of spending.” This is from Jean-Baptiste Say, A Treatise on Political Economy, translated from the 4th edition, Book III, Chapter VIII. In the above quote, Say is pointing out the absurdity of the claim that Great Britain is rich because its taxes are high. (Britain’s taxes were high at the time to pay for the war against Napoleon.) So while Say is simply making an analogy between the rich country and the rich man, I found myself,

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Jean-Baptiste Say on the Millionaire Next Door

A man is not rich because he pays largely; but he is able to pay largely because he is rich. It would not be a little ridiculous, if a man should think to enrich himself by spending largely, because he sees a rich neighbor doing so. It must be clear, that the rich man spends, because he is rich; but never can enrich himself by the act of spending.”

This is from Jean-Baptiste Say, A Treatise on Political Economy, translated from the 4th edition, Book III, Chapter VIII.

In the above quote, Say is pointing out the absurdity of the claim that Great Britain is rich because its taxes are high. (Britain’s taxes were high at the time to pay for the war against Napoleon.)

So while Say is simply making an analogy between the rich country and the rich man, I found myself, while reading this passage, thinking of a really good book by Thomas J. Stanley and William D. Danko titled The Millionaire Next Door: The Surprising Secrets of America’s Wealthy. In it, they show, with ample data, something that is obvious as soon as you think about it: most millionaires got that way, not by spending, but by saving, almost never being extravagant.

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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