Underconsumption in Latin American Economic Thought: Some Considerations

The object of this paper is twofold: to introduce a new theoretical distinction of underconsumption theories and to criticize Latin American under consumptionism in terms of its general theoretical propositions and its empirical validity. It is seen that the causal ordering that the Latin American writers use does not coincide with some basic propositions of the Marxist "laws of accumu lation;" rather than starting with the relations of production or "value rela tions," they choose the (personal) distribution of income and the structure of de mand as the analytical point of departure. At the empirical level as well it is very difficult to show, as the Latin American writers argue, that consumer durables are underconsumed, or even if this occurred, that this underconsumption could threaten the performance of the economy as a whole. Moreover, it is not neces sarily true that concentration at the top or in favor of the middle sectors would be the best alternative to expand demand for all classes of consumer durables, and so remove the presumed constraint on their growth.