Jean-Baptiste Say argues that there is a world of difference between private consumption and public consumption; an increase in the latter does nothing to increase public wealth (1803)
Jean-Baptiste Say (1767-1832) in his influential Treatise on Political Economy (1803) drew a distinction between private and public consumption, viewing an increase in the latter as no way to increase public wealth:
What, then, are we to think of the principles laid down by those writers, who have laboured to draw an essential distinction between public and private wealth; to show, that economy is the way to increase private fortune, but, on the contrary, that public wealth increases with the increase of public consumption: inferring thence this false and dangerous conclusion, that the rules of conduct in the management of private fortune and of public treasure, are not only different, but in direct opposition?
Say returns to an issue which was problematical in his own day (1803) and which continues to haunt us to this very day, namely the commonly held belief that an increase in public consumption will increase public wealth. Say calls this a “gross fallacy” and proceeds to show how public consumption by various office holders and bureaucrats and those favored with government handouts is wasteful, inefficient, acts of extravagance, and even criminal. To add injury to insult, he concludes, “the agents of public authority (can) enforce (this) error and absurdity at the point of the boyonet or mouth of the cannon.”