Economies are measured by their output. Consuming things does not lessen our output. You are now arguing that consumption makes the economy grow less than it would if every dollar were invested. Growing less than it could is not the same thing as shrinking. You also noted that consumption is necessary for investments to have purpose and value. Investment in additional production would not occur if there was no consumption. If consumption is a necessary condition for growth, then it does not definitionally shrink the economy.
Period.
So not only did you not understand that "not grow" does not equal "shrink", but you missed the fundamental point that consumption is necessary for investment and growth. This isn't complicated stuff, you're getting the really basic stuff wrong.
I find it highly unlikely that you have a doctorate in economics at all, much less are teaching anyone. (Particularly at a reputable university) You're right that I'm scared about one thing, and that's that you might have duped some unsuspecting students into paying money to you.
Call me unsurprised that you consider yourself an Austrian, haha.
Consumption shrinks economies. It is a fallacy to believe otherwise.
You are not adding to the economy by consuming, i.e. destroying, what has been produced. If you want to add to the economy, then you do so by abstaining from consuming and investing in the production of goods. This is not to say that you can abstain 100%, as you must consume in order to live, but consuming nevertheless takes resources out of the economy.
The argument that consumption shrinks economies is not an argument that the sum total of all of your actions causes the economy to go from one overall size of wealth at one point in time, to a smaller overall size of wealth at a subsequent moment in time. For if you are a wage earner, and you save and invest a portion of your income, then your actions taken together result in a net growth to the economy. But your consumption still shrinks the economy because you are taking resources out of the economy in order to sustain yourself.
Now if you are leeching off the taxpayer, and you consume more than what you earn through productive activity, then your consumption shrinks the economy from one moment in time to the next, compared to what it otherwise would have been had you earned the money instead.
I do not care one single iota that you cannot handle my having a doctorate. The fact that you “doubt” it, given what you have written on this forum so far, is really only your self-doubt. You say you doubt me only because you doubt the value of your own schooling.
Consumption is not necessary for investment and growth. Investment and growth is necessary for consumption. You have the relation precisely backwards. If it weren't for investment in goods, you could not consume those goods. The reason you believe the opposite is because of your philosophical principles you have unquestionably adopted. I mentioned it already to you that you lack the intellectual tools to be able to understand economics. And yet you keep repeating the same fallacy over and over again as if doing so will someday make it true.
To say that consumption is required for saving and investment to occur totally misses the fact of human life that consumption is not a choice. Consumption MUST occur if human life is to exist. Yet consuming does not cause investment. It is quite possible, and for many millennia human life predominantly consisted of, consumption right out of nature, i.e. animals and vegetation, with little if any investment at all.
The reason why the total consumption of primitive societies was so low is not because they just didn’t have a strong enough drive to consume. It is not because they weren’t spending pretty much their entire days searching for food. It is because their saving and investment was so low. They consumed so little because they saved and invested so little.
You are committing what is called the fallacy of composition. You are taking what is true for an individual firm in capitalism, actually a consumer goods selling firm specifically, that the consumer goods seller’s livelihoods depend on consumers spending money on their products, and then you commit the fallacy by then claiming “that relation is therefore also true for the economy as a whole.”
At the level of the economy as a whole, where the concept of “consumption” comes up against the concept of “investment” in the most clear way, the relationship is the other way around. Consumers as such have no choice but to consume. Consumption cannot shrink to zero, or else all human life would end. But, investment can shrink to zero. It is possible for people to only spend money on consumption, and as long as that is the case, there will be no investment and no economic growth. Consumption does not cause investment. More consumption does not cause more investment. At the firm level it does, but that additional consumption comes at the cost of lower investment in total. You can easily grasp this if you imagine every individual on the planet reducing their investment to zero, and increasing their consumption concomitantly, where each individual hopes and expects that their additional consumption spending will “stimulate” more investment. If every individual did this, investment would not increase at all. What is true for this, is also true when the change is less than 100%. If you reduce your investment, you are reducing the amount of goods that are produced. No, your increase in consumption that takes place does not then replace or more than replace that lost investment. Your consumption adds NOTHING to production. The additional revenues that consumer goods companies receive because of what you did, comes at the cost of a reduction is sales revenues that capital goods companies received that they used to receive because of your investment.
The additional nominal investment the consumer goods companies make in response to your increased consumption, will purchase fewer capital goods because of your reduced investment. The prices of late stage capital goods rise, and the prices of earlier stage capital goods will fall. That makes the economy smaller than it otherwise would have been had you continued to abstain from consumption somewhat and invested instead.
Consuming more means investing less, because you can’t spend the same dollar on two different things at the same time. If you spend money on your own consumption, that is money you did not spend on hiring labor, or investing in capital goods that can add to the pie of consumer goods.
The reason you are able to consume the goods you consume at all is because someone, hopefully you, but it could be your parents, or the government, are producing goods, and either selling them for those consumer goods, or you are a self-sufficient consumer and what you produce you directly consume.
I suggested to you that you should read more economics before coming back here to argue, but you don’t seem to be able to take constructive criticism.
Hmmm…do you think that is a major reason why you are making assertions that I am easily exposing as flawed and incorrect? You have an attitude problem. Your problem is that you can’t handle being corrected. You will always stay ignorant that way you know.