Modern Transformation of Relations between Production and Consumption

Abstract

ABSTRACT. In this paper we study the antecedents and consequences of modern transformation which happens with relations between production and consumption. A theoretical justification of the thesis about blurring relationship between growth of consumer's opportunities and resource provision's improvement for human capital accumulation is proposed. The reason for this phenomenon is called the predominance of one from two forms of consumption expansion.Specifically, the predominance of the growth of goods diversity, in comparison with increase of their availability is in our opinion the reason for weakening the positive impact of consumption growth on the accumulation of human capital. An empirical confirmation of this thesis is revealed in the analysis of variance in connection between scale of individual consumption and labor productivity in the group of European countries, as well as the U.S. and Japan.JEL Classification: D11, D12, E03Keywords: consumption, human development, human capital accumulation, labor productivity.(ProQuest: ... denotes non-US-ASCII text omitted.)IntroductionDesire of Humanity to expand the tight restrictions imposed on individual consumption by production possibilityies has always been an important driving force of social development. For many centuries, the technical component of social development appeared for people as a process of creation the new ways to meet human needs. The last two hundred years, social component of development seemed as ensuring availability of such ways for more and more people. Increasing diversity of goods, available to members of the society and economic progress were inseparable: the first acted as the main purpose of development, and its most important prerequisite, since the improvement of the living conditions increased endowment of economic activity by the most important resource - educated, healthy, prone to constructive interaction and creative people.Capitalist economy, using this fundamental human desire to expand choice, provided unprecedented success in the growth of the comfort and safety of life, creating a powerful and reliable mechanisms for associate the owner's personal welfare with productive force of his resource (see, for example, Schumpeter, 2011, North, 2010).However, countries which have reached the highest standards of general population's well-being, faced a qualitatively new problems of relationship between production and consumption. And tasks of formulating a new hierarchy of development priorities, defining a new role of consumption in the reproduction system of post-industrial global economy are actualized for modern economic science.The problem of irrational, wasteful consumption is actualized by virtue of tangible successes in the development of productive possibilities and improvement of income distribution's mechanisms: the rationalization of consumption becomes more promising source of pulses for welfare's growth, just in light of the decreasing marginal utility of production's and distribution's enhancements. With the growth of the effort needed to make further progress in the spheres of production and distribution, the increasing of negative (and in many ways - irreversible) effects of growth the intensity of material resources' flow (Daly, 1994), more attractive, and in many respects, even uncontested become need of consumption's rationalization.Therefore, an important and promising direction of modern economic theory's development seems clarifying the functional role of consumption in the reproductive process of the post-industrial economy, defining the role of various public institutions in the formation of socially necessary consumption's measure and the allowable deviations from such measure. As well as learning how to reconcile the principles of personal freedom and consumer sovereignty with necessity to take into account growing social consequences of individual choice. …