I just want to use the four-grade division of people's living standard as the criterion to judge the development of social economy of a country. If you read my articles "On the Development of Social Economy" and "A Letter To Professor Deng From Jinan University" <http://www.geocities.com/WallStreet/Exchange/3058/development.htm> <http://www.geocities.com/WallStreet/Exchange/3058/letteraa.html>, you will understand more.
Sincerely, Ju-chang He
SHENZHEN, P.R. CHINA Welcome to visit My Home Page at <http://www.geocities.com/WallStreet/Exchange/3058/>
Greg Nowell wrote:
>
> Chang wrote:
>
> 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
>
> Fax 518-442-5298