The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Underconsumptionism

  • Michael Schneider
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1741

Abstract

‘Underconsumption’ is the label given to theories which attribute the failure of the total output of an economy to continue to be sold at its cost of production (including normal profit) to too low a ratio of consumption to output. According to underconsumption theories, such deficient consumption leads either to goods being able to be sold only at below-normal rates of profit, or to goods not being able to be sold at all. These effects are seen as leading in turn to cutbacks in production and increases in unemployment. Underconsumption theories are thus amongst those which seek to explain cyclical or secular declines in the rate of economic growth.

Keywords

Acceleration principle Aggregate demand Baran, P. A. Catchings, W. Clark, J. B. Disproportionate production Emmanuel, A. Harrod–Domar growth model Hoarding Hobson, J. A. Imperialism Kautsky, K. Keynesianism Lauderdale, Eighth Earl of Lenin, V. I. Luxemburg, R. Malthus, T. R. Marx, K. H. Redistribution of income Rodbertus, J. K. Saving equals investment Sismondi, J. C. L. S. de Sweezy, P.M. Underconsumption Underconsumptionism Wages fund 
This is a preview of subscription content, log in to check access

Bibliography

  1. Baran, P.A., and P.M. Sweezy. 1966. Monopoly capital. New York: Monthly Review Press.Google Scholar
  2. Bleaney, M. 1976. Underconsumption theories: A history and critical analysis. London: Lawrence & Wishart.Google Scholar
  3. Cazenove, J. 1822. Considerations on the accumulation of capital and its effects on profits and on exchangeable value. London: J.M. Richardson. Published anonymously.Google Scholar
  4. Chalmers, T. 1832. On political economy, in connexion with the moral state and moral prospects of society. Glasgow: William Collins.Google Scholar
  5. Costabile, L., and R.E. Rowthorn. 1985. Malthus’s theory of wages and growth. Economic Journal 95: 418–437.CrossRefGoogle Scholar
  6. Domar, E.D. 1947. Expansion and employment. American Economic Review 37: 34–55.Google Scholar
  7. Eagly, R.V. 1974. The structure of classical economic theory. Oxford: Oxford University Press.Google Scholar
  8. Eltis, W.A. 1980. Malthus’s theory of effective demand and growth. Oxford Economic Papers 32: 19–56.CrossRefGoogle Scholar
  9. Emmanuel, A. 1969. Unequal exchange: A study of the imperialism of trade. New York: Monthly Review Press. 1972.Google Scholar
  10. Haberler, G. 1937. Prosperity and depression. Geneva: League of Nations.Google Scholar
  11. Hobson, J.A. 1896. The problem of the unemployed. London: Methuen.Google Scholar
  12. Hobson, J.A. 1902. Imperialism: A study. London: Nisbet.Google Scholar
  13. Hobson, J.A. 1909. The industrial system. New York: Longmans.Google Scholar
  14. Hobson, J.A. 1922. The economics of unemployment. London: Allen & Unwin.Google Scholar
  15. Hobson, J.A. 1930. Rationalisation and unemployment. London: Allen & Unwin.Google Scholar
  16. Keynes, J.M. 1936. The general theory of employment, interest and money. London: Macmillan.Google Scholar
  17. King, J.E. 1981. Perish commerce! Free trade and underconsumption in early British radical economics. Australian Economic Papers 20 (37): 235–257.CrossRefGoogle Scholar
  18. Lauderdale, Eighth Earl of. 1804. An inquiry into the nature and origin of public wealth. Edinburgh. Reprinted, New York: Augustus M. Kelley, 1962.Google Scholar
  19. Lenin, V.I. 1897. A characterisation of economic romanticism (Sismondi and our native Sismondists). In Collected works, ed. V.I. Lenin, vol. 2. Moscow: Foreign Languages Publishing House. 1962.Google Scholar
  20. Luxemburg, R. 1913. The accumulation of capital. Trans. A. Schwarzschild, with an introduction by J. Robinson. London: Routledge & Kegan Paul, 1951.Google Scholar
  21. Malthus, T.R. 1820. Principles of political economy considered with a view to their practical application. London: Murray.Google Scholar
  22. Malthus, T.R. 1836. Principles of political economy considered with a view to their practical application. 2nd ed. London: William Pickering.Google Scholar
  23. Marx, K. 1885. Capital, vol. 2. Moscow: Foreign Languages Publishing House, 1957.Google Scholar
  24. Mummery, A.F., and J.A. Hobson. 1889. The physiology of industry. London: Murray.Google Scholar
  25. Nemmers, E.E. 1956. Hobson and underconsumption. Amsterdam: North-Holland.Google Scholar
  26. Robbins, L. 1932. Consumption and the trade cycle. Economica 12: 413–430.CrossRefGoogle Scholar
  27. Robinson, J. 1949. Mr Harrod’s dynamics. Economic Journal 59: 68–85.CrossRefGoogle Scholar
  28. Rodbertus, K. 1898. Overproduction and crises. London: Swan Sonnenschein.Google Scholar
  29. Sismondi, J.C.L. 1815. Political economy. New York: Kelley. 1966.Google Scholar
  30. Sismondi, J.C.L. 1819. Nouveaux principles d’économie politique. Paris: Delaunay.Google Scholar
  31. Spence, W. 1807. Britain independent of commerce. In Tracts on political economy. London: Longman, Hurst, Orme & Brown. 1822.Google Scholar
  32. Sraffa, P., ed. 1952. Works and correspondence of David Ricardo. Vol. 6. Cambridge: Cambridge University Press.Google Scholar
  33. Sweezy, P.M. 1942. The theory of capitalist development. New York: Monthly Review Press.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Michael Schneider
    • 1
  1. 1.