Will Limited Needs Kill Capitalism?

Gilles Saint-Paul, Université des Sciences Sociales de Toulouse

Abstract

This paper argues that a number of ``unorthodox" analyses of capitalism can be understood from the point of view of orthodox economic theory. Our argument is based on the assumptions of monopolistic competition and that utility derived from consuming an individual good is bounded. The model's predictions are consistent with some popular heterodox views, such as ``In modern capitalist society, productivity is so high that many people are nearly saturated with goods;" ``Productivity growth reduces the real consumption wage of workers;" and ``The benefits from growth are appropriated by symbol manipulators." Furthermore, depending on relative levels of product diversity and physical productivity, globalization may harm poorer workers in LDCs, rather than unskilled workers in developed countries, as is usually predicted.

Recommended Citation

Saint-Paul, Gilles (2006) "Will Limited Needs Kill Capitalism?," Capitalism and Society: Vol. 1 : Iss. 1, Article 4.
DOI: 10.2202/1932-0213.1000
Available at: http://www.bepress.com/cas/vol1/iss1/art4

Discussion and Commentary

Robert M. Solow, Massachusetts Institute of Technology, Comments on Papers by Saint-Paul, Aghion, and Bhidé (May 2006)