When this point was reached D and E could get no
further advances, and their stock and plant would pass into A's hands.
From the point of view of the community A's action has resulted in the
creation of a number of material forms of capital which, so long as
the existing relations between the community's production and
consumption continue, stand as over-supply.

(4) A may hand over his weekly L5 to F on security. F by purchase
obtains the goods which A refused to consume, and may use them (or
their equivalent in other material forms) as capital for further
production. If F can with this capital help to produce articles for
which there is an increasing consumption, or articles which evoke and
satisfy some new want, then A's action will have resulted in "saving"
from the point of view of the community--_i.e._, there will be an
increase of real capital; forms of capital which would otherwise have
figured as over-supply have the breath of economic life put into them
by an increase in general consumption. No real difficulty arises from
a doubt whether the goods and services which A renounced were capable
of becoming effective capital. The things he renounced were luxurious
consumptive goods and services. But he could change them into
effective capital in the following way:--Designing henceforth to
consume only half his income, he would deliberately employ half the
requisites of production which furnished his income in putting extra
plant, machinery, etc., into some trade. Whether he does this himself,
or incites F to do it, makes no difference; it will be done. In this
way, by establishing new forms of useful capital, A can make good his
saving, assuming an increase of general consumption. These are the
four possible effects of A's saving from the point of view of the
community--

(1) Nil.
(2) Bogus or "paper" saving.
(3) Over-supply of forms of capital.
(4) Increase of real capital.

It appears then that every act which in a modern industrial society is
"saving," from the standpoint of the community, and not a mere
transfer of "spending" from one person to another, consists in the
production of a form of goods in its nature or position incapable of
present consumption.

This analysis of "saving" convicts J.S. Mill of a double error in
saying, "Everything which is produced is consumed; both what is saved
and what is said to be spent; and the former quite as rapidly as the
latter." In the first place,