Update: For a contemporary survey with a great deal of relevance to the matters being raised here, please see: Fear of fallowing: the specter of a no-growth world published in the March 2008 Haper's magazine.
The employer represents capital, and capital represents the means of production; hence, the employing class represents production.The end and object of production is consumption. Nothing but the desire for a commodity and a willingness to give an equivalent for it will cause it to be produced. Production is universally the economic response to, and consequence of consumption. No one will continuously produce a commodity unless he can find consumers for it. To the extent that he ignores this fact, he pays the penalty in loss and bankruptcy. The market is the basis of the workshop and the warehouse, and the habitual daily consumption of wealth by the community is the basis of the market. Thus, economic production absolutely depends upon social consumption, and the success of the employing class depends upon the extent of the consuming class.
3 comments:
If the withering of demand produces the withering of production, what produces withering of demand?
There must be a multitude of reasons for the withering of demand. Some of these may be as intangible as stylistic changes. Some as concrete as over production to the point of just one more than is needed. Things like income aren't a cause of the withering of demand, but are the operant factor in an inability to exchange for that which is produced. The demand is there, but the ability to satisfy is not.
"What produces a withering of demand?"
In subsequent sections of this pamphlet, Gunton argues that the growth of demand depends on the elevation of the standard of living of workers. The concept of standard of living he uses is more robust and theoretically interesting than simply "level of consumption". It is more like an historically established level that workers will refuse to relinquish.
So there could actually be periods in which the level of consumption exceeds the standard of living. That excessive demand would thus be precarious.
This is an important distinction when considering the difference between demand sustained by increased credit and demand sustained by rising wages. Credit-driven demand is inherently unstable. To put it proverbially, it is "easy come, easy go."
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