Underconsumption

Abstract

Hobson is best known among economists for his exposition and advocacy of the underconsumption theory. He was preceded as an underconsumptionist by James Maitland, Eighth Earl of Lauderdale, Thomas Robert Malthus, J.-C.-L. Simonde de Sismondi and Johann Karl Rodbertus, among others. These predecessors, however, were practitioners of what J. A. Schumpeter termed ‘advance economics’, by contrast with ‘synchronisation economics’:

that is, all analytic patterns that do not in a stationary process assign any fundamental role to the fact that what society lives on at any given moment is the result of past production, on the ground that, once a stationary process has been established, the flow of consumers’ goods and the flow of productive service [sic] are synchronised so that the process works as if society did live on current production. (1954, p. 565, emphasis in original)²