The Economics of Abundance

The Economics of Abundance

Affluent Consumption and the Global Economy

New Directions in Modern Economics series

Brendan Sheehan

This book addresses the challenge posed by J.K. Galbraith over 50 years ago to make a constructive contribution to a different style of economic analysis – the economics of abundance. It identifies a system of abundance inhabited by the ‘people of plenty’ and illustrates that the driver of growth in this system is spending by affluent consumers. This timely book provides essential heterodox economic theory to explain this spending and explore its key drivers and constraints.

Chapter 2: The Institution of Marketing

Brendan Sheehan

Subjects: business and management, entrepreneurship, economics and finance, institutional economics


A. INTRODUCTION The system of abundance has solved the problem of production. It has the capacity to churn out daily a vast cornucopia of products of inestimable variety. Yet the productive success of the system threatens its survival. For as the people of plenty accumulate an ever-greater profusion of possessions and experiences the perennial threat is that they might increase their spending at a slower rate than the growth of the productive potential of the economic system. The dominant priority of the economic system is therefore to persuade affluent consumers to embark on ever-greater bouts of spending. More specifically, the challenge is to persuade the people of plenty to keep spending at a rate, in both volume and value terms, that will satisfy the corporate desire for ever-greater profits. The system of abundance addresses this challenge by spontaneously creating an institutional arrangement whose purpose is to persuade affluent consumers to spend more. This is the institution of marketing. It acts to sustain and reproduce the conditions for economic growth in the system of abundance driven on by expanding consumer spending. This chapter fleshes out the idea of the institution of marketing initially outlined in the previous chapter. In the process it will become clear why the institution of marketing is a central conceptual framework for understanding the economic dimension of the human condition of the people of plenty. Section B examines the progenitor concept developed in the seminal work of Potter – the institution of advertising. It corrects confusions and limitations...

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