In this simple task, Able is demonstrating a basic economic principle that can lead to an improvement in living standards: He is <strong>underconsuming</strong> and he is taking <strong>risk!</strong>
<strong>Underconsumption:</strong> In order to build his net, Able is unable to fish that day. He has to forgo the income (the fish) that he would have otherwise caught and eaten. It's not that Able lacks the demand for fish. In fact, he loves fish and he will go hungry if he doesn't get one that day. Able has no more or less demand for fish than his two friends. But he is choosing to defer that consumption in order to potentially consume more in the future.
<strong>Risktaking:</strong> Able is also taking risk because he has no idea that his device will actually work, or allow him to catch enough fish to compensate for his sacrifice. In the end, he might just have a bunch of string and an empty stomach. If his idea fails, he can expect no compensation from Baker and Charlie, who did, after all, try to warn him of his folly.
In economic terms, capital is a piece of equipment that is built and used not for its own sake, but for building or making something else that is wanted. Able doesn't want the net. He wants the fish. The net can, maybe, get him more fish. Therefore, the net, a piece of capital, is valuable.
— Peter Schiff; How an Economy Grows and Why It Crashes
