Forced Saving is not a single accounting item. Historical accounts distinguish investment patterns inconsistent with voluntary saving from possible savings following redistribution of purchasing power. Modern usage can describe money unspent because consumption is constrained. Lower consumption by one group alone does not establish growth of the economy’s capital.
Garrison compares Hayek’s and Mises’s accounts and notes that Forced Saving does not always mean the same thing in their arguments. Sometimes it identifies investment inconsistent with voluntary consumption choices; elsewhere it means a possible source of additional saving. Without this distinction, matching labels can reverse a claim’s meaning. [Garrison — Overconsumption and Forced Saving]
Our illustration of Mises’s discussion: income of 100 buys 10 baskets priced at 10. At the same pay and a price of 20, it buys only 5. The household consumes less, but if it spends its entire income, it has no monetary saving left. This distinguishes quantities; it is not a complete account of capital formation. [Mises — Human Action, XX.5]
Mises allows that uneven price and income changes can shift resources to people who save more. He explicitly denies that this outcome is necessary: wages need not lag, and beneficiaries can consume the extra income. The net effect depends on the particular changes and decisions. [Mises — Human Action, XX.5]
Mises warns of apparent profits when accounting costs inadequately reflect more expensive replacement of worn equipment. Distributing and consuming such a surplus can mean capital consumption. Higher money income or investment spending alone therefore does not establish greater sustainable productive capacity. [Mises — Human Action, XX.5]
Garrison distinguishes phases and meanings of the term. In his account, a credit boom can initially raise both consumption and investment, for example at the expense of maintenance. A later shortage of consumer goods is a different phase. Current spending growth does not prove that sufficient voluntary savings already exist to complete projects. [Garrison — Overconsumption and Forced Saving]
The ECB’s 2020 study uses forced savings for constrained consumption opportunities during the pandemic. It distinguishes these from precautionary savings prompted by uncertain future income; the former also include some restraint driven by fear of infection. This is not automatically the Austrian account of credit redirecting production. [ECB — COVID-19 and the increase in household savings]
The ECB mainly attributes the rise in saving unexplained by its model to consumption constraints. This is an estimate based on interpreting a residual, not measurement of every household’s intentions. Retain the period, method and uncertainty when citing it; do not generalise this outcome to every future crisis. [ECB — COVID-19 and the increase in household savings]
Our application of the historical distinctions: identify whose incomes and prices changed, who cut consumption, and who actually invested or consumed capital. Monetary aggregate growth alone does not establish that chain. Buying Bitcoin is not by itself evidence of Forced Saving either; the cause and corresponding counterpart of the change need to be demonstrated. [Garrison — Overconsumption and Forced Saving] [Mises — Human Action, XX.5]
For the clearest picture, read this entry together with Credit Expansion, Austrian Business Cycle Theory, Capital Goods, Cantillon Effect, Economic Calculation. The reverse links also lead from Credit Expansion.