Underconsumption: Motive Force of Capitalist History

“Sweezy”, Bob Pollin writes, “was the most powerful Marxist exponent of underconsumptionism since Rosa Luxemburg. Keynes himself later embraced this as his analysis of the 1930s depression.

Underconsumption is the tendency in capitalist economies for the capitalists to produce more things than the people can afford to buy.

(This capitalist problem could be solved) through more income equality, and more social control over investment spending. But capitalists don’t like that solution.

Therefore, as Sweezy and Baran argued in Monopoly Capital, (capitalists) come up with alternative means of getting buyers for the things monopolist firms decide to produce: they get the military to spend, they induce spending through advertising, and they ride the wave of epoch-making innovations like the automobile (which brought public highway construction and government subsidized construction of the suburbs).”

–Alexander Cockburn, 2004. “Understanding the World with Paul Sweezy,” CounterPunch, March 6/7.

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