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.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
OECD definition: “Net household saving is defined as the subtraction of household consumption expenditure from household disposable income, plus the change in net equity of households in pension funds” (https://data.oecd.org/hha/household-savings.htm).
- 2.
OECD definition: “Real household net disposable income is defined as the sum of household final consumption expenditure and savings, minus the change in net equity of households in pension funds. This indicator also corresponds to the sum of wages and salaries, mixed income, net property income, net current transfers and social benefits other than social transfers in kind, less taxes on income and wealth and social security contributions paid by employees, the self-employed and the unemployed” (https://data.oecd.org/hha/household-disposable-income.htm).
Bibliography
Bank for International Settlements. (2017). 87th Annual Report, 1st April 2016–31st March 2017. Basel. Retrieved from: https://www.bis.org/publ/arpdf/ar2017e.pdf
Committee on Oversight and Government Reform. (2008, October 23). The Financial Crisis and the Role of Federal Regulators. Retrieved from: https://www.gpo.gov/fdsys/pkg/CHRG-110hhrg55764/html/CHRG-110hhrg55764.htm
Dew-Becker, I., & Cordon R. J. (2005, September). Where did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income. Retrieved from: http://zfacts.com/metaPage/lib/gordon-Dew-Becker.pdf
Lipietz, A. (1987). Mirages and Miracles: the Crises of Global Fordism. London, New York: Verso.
Marx, K. (1992). Capital: A Critique of Political Economy. Volume Two. London, New York: Penguin Books.
Tombazos, S. (2014). Time in Marx. The Categories of Time in Marx’s Capital. Leiden, Boston: Brill Academic Publisher.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
Tombazos, S. (2019). Private Consumption, Wage Share of GDP and Reproduction Schemas. In: Global Crisis and Reproduction of Capital. Palgrave Insights into Apocalypse Economics. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-030-05725-1_3
Download citation
DOI: https://doi.org/10.1007/978-3-030-05725-1_3
Published:
Publisher Name: Palgrave Pivot, Cham
Print ISBN: 978-3-030-05724-4
Online ISBN: 978-3-030-05725-1
eBook Packages: Economics and FinanceEconomics and Finance (R0)