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 6: The Role of Markets

Brendan Sheehan

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

Extract

A. INTRODUCTION The preceding chapters have set out a comprehensive analysis of the drivers and constraints on consumption spending in a system of abundance. This included an examination of the numerous ways in which the institution of marketing works to amplify the drivers of spending and relax the constraints. The work of the institution ensures that consumer spending – in value and volume terms – broadly rises at a rate sufficient to utilise the ever-expanding capacities of corporations to produce. All of this has profound implications for the way in which markets work, which this chapter seeks to address. The essence of all markets is a set of arrangements by which buyers and sellers are connected together in order to conduct transactions. The sellers provide the products and the buyers provide the money. Beyond this, the market form can vary quite significantly. This chapter outlines three market forms that apply to the system of abundance. In so doing it will introduce a distinctive conception of the market – that of a corporate-guided market for a branded product. This is the general market form in the system of abundance, through which the vast majority of everyday transactions are conducted. The concept builds upon the key insights of J.K. Galbraith with respect to a distinctive market form which he terms a “managed market”. This Galbraithian managed market form is actually a special case of a corporate-guided market, applicable to certain high prestige branded products. Galbraith in turn breaks free for the mainstream frame of reference...

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