But I don’t think your example is comparable to the practice of literally burning money. If rich people were buying cars and then dumping them into a swamp, then going out next week and buying a new one and dumping it into a swamp, then it would be analogous.
But instead you’re saying that lots of people buy cars that are bigger and more expensive to buy and operate than they need, and they do stupid stuff that needlessly lowers the value of the vehicle like drive it through mud bogs.
If we want to list all the ways people waste money, then spending too much on vehicles is surely one of those ways. So is buying big houses, eating fancy foods, taking vacations in Europe, wearing fancy clothes, and on and on and on.
In one sense purchasing things that you don’t actually enjoy just to show that you have the money to purchase them is pretty stupid. If you don’t actually like caviar but order it all the time just to show that you’re the kind of guy who can afford to buy caviar, then that’s pretty stupid. Surely there are better ways to spend your money. Eating caviar that you don’t enjoy is equivalent to buying caviar and dumping it into the trash, or, as you say, lighting piles of money on fire.
But how are you and I supposed to set the true value for these goods? Isn’t their real value what various people are willing to pay for them? Yes, spending money on whiskey and prostitutes and then squandering the rest doesn’t make sense, but there’s only so much control over other people’s spending that you and I can realistically accomplish.
The difference between trashing real goods and destroying money is important though. Destroying money doesn’t directly destroy real goods, it only has the potential to prevent the creation of future goods and services that can’t be created because the future consumers won’t have the money to pay for them, and so the producers never produce the goods.
The good news is that in our current economy there doesn’t seem to be any shortage of money. Corporations and banks are sitting on huge piles of cash, but often can’t find anything worthwhile to invest in. This is why you sometimes see corporations buying up companies for insane amounts of money, or companies with sketchy business plans that have ridiculous market capitalizations where their stock is bid up to ridiculous levels.