I’m afraid I don’t really understand your point. Surely a dollar spent by an individual goes through a less complex decision-making process than one spent by a typical company? And why is spending on some company’s business plan a more efficient use of money than what an individual might spend it on? I know that when I’m paying for a flight or hotel myself, I expend more effort getting a good price than I do when the company’s paying for it, so maybe money spent by a corporation is used less efficiently, not more.
msmith537’s post seems to be questioning the economic value of law firms, which is another question entirely.
Corporations have the advantage of having large centralized amounts of capital in which to respond to decisions. A small number of people can build a million dollar project while a million people with one dollar can’t. It doesn’t really address the OPs point though. A million people can exert their economic decisions when they all invest in a company they believe in.
Couldn’t you though? If the government and central bank agree that inflation must be kept to a minimum, and enforces this by monetary policy, then even fiat money can be wasted. Although, if I understand correctly, an inflationary policy can indeed waste money; I’ve heard it said that the inflation of the 1960s funded the Vietnam War.
What if you took that $6 million and used it to construct a doomsday bomb that destroyed the earth and every living human being?
Wouldn’t that have a negative economic impact? What about if the Romans sow the fields of Carthage with salt and destroy agriculture in North Africa for a generation? The legionaires are getting paid to sow the salt, the salt manufacturies are getting money, but now you’ve got vast tracts of productive land (capital) that can no longer be used for anything. Capital has been destroyed.
Or take a simple economic system. You’re marooned on a desert island. You spend a week building a hut out of coconut fronds. The next day a storm comes along and destroys the hut. Well, that’s fine, because you can always pay yourself to build another hut with the money you insured the hut for with yourself. Wait, no you can’t. You’ve wasted a week’s worth of work on a hut that you no longer have. Or, you spend a week digging a hole, then spend another week filling it back in. Can anyone argue that you’re just as well off as if you had spent those weeks producing something useful?
The argument that money can’t be wasted is a curious one, equivalent to saying that all economic activity has equal worth. But that’s clearly not true. Goods can be destroyed, captital equipment can be destroyed, labor can be wasted. Economic booms where the economy increases can occur, and depressions where the economy decreases can occur. At some level of economic inefficiency we’re back to fighting the rats for scraps of garbage to feed our starving children because the Earth can’t sustain 6 billion subsistance farmers and/or hunter-gatherers.