There’s more to the economics of consumption than (almost) unconstrained utility maximisation

G. M. Peter Swann

in Innovation By Demand

Published by Manchester University Press

Published in print August 2002 | ISBN: 9780719062674
Published online July 2012 | e-ISBN: 9781781700273 | DOI:
There’s more to the economics of consumption than (almost) unconstrained utility maximisation

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This chapter examines the way in which economists have understood demand. It argues that mainstream, neoclassical or ‘standard’ economists focus on demand as a process in which selections are made among commodities, typically assuming ‘rational’ and profit-maximising behaviour on the part of the actors making the selections. The chapter looks at the major contributors to the economics of consumption: in addition to the mainstream (the econometric paradigm, W. M. Gorman, A. S. Deaton, and J. Muellbauer), it considers the contributions of ‘the giants’ (including Adam Smith, Karl Marx, John Maynard Keynes, John Stuart Mill), and ‘the travellers’ (T. Scitovsky, J. K. Galbraith, P. Earl, William Arthur Lewis). It concludes that there is more to the economics of consumption than the mainstream economists' paradigm of utility maximisation. Indeed, it argues, economists should look to other disciplines for inspiration. Evolutionary economics in particular has taken on board some of the preoccupations of sociologists in its concept of the selection environment, in which non-market as well as market factors play a significant role in the selection process.

Keywords: demand; economists; consumption; evolutionary economics; Adam Smith; economics; utility maximisation; selection; Karl Marx; John Maynard Keynes

Chapter.  8396 words. 

Subjects: Political Economy

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