People's living standard can be divided into four grades. The first grade is necessary consumption of clothing, food, housing and transportation. The second grade is ordinary consumption, which means buying some more clothes and purchasing TV sets and washers, etc. The third grade is extravagant consumption, which means going to hotel and restaurants, taking cars and going to dancing-halls, etc. The fourth grade is over-extravagant consumption.
Nowell answers:
Without getting into your typology, which may be perfectly valid, it is, in theoretical terms, not strictly relevant. There's a book out called "The Millionaire Next Door." There are about 200,000 US millionaires who live in suburbs in modestly priced houses and drive used cars and don't do over-extravagant consumption and not much "third grade" consumption.
The social economic problem is that this failure to consume decreases aggregate income at the same time that resources are concentrated in the hands of people who may or may not invest it in a manner that is socially beneficial. See Hobson's Imperialism, and also Keynes' General Theory. "Consumption levels" are not strictly speaking the analytical problem, except in terms of equity considerations for the low end. Consumption levels are a problem if you're doing a kind of ecological analysis and want to cut down resource impact of various activities.
-- Gregory P. Nowell Associate Professor Department of Political Science, Milne 100 State University of New York 135 Western Ave. Albany, New York 12222
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