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CONSUMPTION 

 Introduction 



The attempt to gather materials on the subject of consumption is 

 beset with serious difficulties. Most writers have directed their 

 attention toward productive and distributive aspects of our economic 

 life rather than toward those which have to do with the consumption 

 of wealth. Some have analyzed the conditions of productive opera- 

 tion and have attempted to formulate principles by which efficiency 

 in wealth production may be achieved. Others have denned eco- 

 nomics wholly in terms of the price-making process and have asserted 

 that consumption has no part in this science of economics. From 

 both these points of view the present writer would venture to differ. 



For even though the goal one sets up as the ultimate purpose of 

 economic study be efficiency in production, the product must be 

 measured, not in terms of goods as such, but in terms of satisfiers of 

 human wants. If we desire to increase those satisfactions, two 

 courses are open to us. One of these is to improve our means of pro- 

 duction, so that more effective use is made of natural resources, human 

 labor, and capital goods. But we must not forget also that we have 

 another means to the same end, and that is by changing the character 

 of our consumption. 



If, on the other hand, we choose to regard economics as the 

 science of the price-making process, consideration of the facts of 

 consumption is not less important. For prices of goods must be 

 made in accordance with consumers' estimates of their utilities, 

 modified by the purchasing power which buyers derive from the 

 incomes they receive as the price of their labor or for the use of 

 their property land or capital. We shall not get very far in either 

 the theoretical understanding or the practical control of marketing 

 activities without careful study of the phenomena of demand as 

 created by the consumer. 



The aim of any rational consumption of wealth is to secure the 

 greatest amount of well-being possible from limited resources. Evi- 



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