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It seems to me that M-C-M' is the opposite of the idea that
consumption is the purpose of production. That is, if
the particular capitalist cuts down on consumption, his
profits will grow faster. On the macro level, the idea
is to create an economy in which only Dept. I exists.
The capitalist spirit is willing but the flesh is weak.
(Didn't Tugan dream of an accumulation process without
workers?)
At 03:55 PM 4/8/00 -0400, you wrote:
>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.
>
>
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