[ show plain text ]
On Sat, 8 Apr 2000, Martha Campbell wrote:
> I did not argue that Keynes said consumption is the purpose
> of production, Keynes himself says this (GT. p104)....
Yes. "Consumption -- to repeat the obvious -- is the sole end
and object of all economic activity." He's repeating Smith. I
think he means it's the _ultimate_ end; he recognizes of course
that capitalistic production is motivated by profit, not
directly by consumption. But he wants to make the point that
consumption is the limiting factor in the last instance --
"Aggregate demand can be derived only from present consumption
or from present provision for future consumption." Investment
can be profitable only if there's an expectation of sufficient
consumption demand somewhere down the road. This does not
contradict his view that present consumption depends on income
(given the "slowly changing background factors"), which is in
turn determined by investment via the multiplier.
Allin Cottrell.
This archive was generated by hypermail 2b29 : Sun Apr 30 2000 - 19:59:43 EDT