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Private Consumption, Wage Share of GDP and Reproduction Schemas

  • Stavros Tombazos
Chapter
Part of the Palgrave Insights into Apocalypse Economics book series (PIAE)

Abstract

The financial system of the neoliberal period has allowed the massive “transfer” of future demand by wage earners to the present time through rising debt, whose servicing has increasingly undermined the disposable part of their wages for consumption. Marx’s schemas of extended reproduction are modified to show that borrowing stimulates consumption, which has a positive effect on investment and employment, thus leading to greater production. However, these reproduction schemas are structurally unstable and from the outset have an expiration date. They collapse, once the so-called markets begin to doubt whether the accumulated rights on future wages will be redeemed. Thus, the economic crisis manifests itself initially in its financial dimension, as an accumulation of unsustainable private debts.

Keywords

Reproduction schemas Future demand Private debt Debt service Disposable income 

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Stavros Tombazos
    • 1
  1. 1.University of CyprusNicosiaCyprus

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