Consumption

Consumption is the action of using and / or spending a product, a good or a service to meet both primary and secondary human needs. In  economics , consumption is considered as the final phase of the production process, when the good obtained is able to serve the consumer as useful.

There are goods and services that are exhausted at the time of consumption, such as food, while there are others that are only transformed, for example, a plane trip.

In the current capitalist system, consumption represents a cyclical activity, since man produces to consume, and this consumption generates more production. With consumption, it seeks to satisfy not only present needs, but also future needs.

Citing the American sociologist Jeremy Rifkin, the exponential increase in consumption occurred in the 1920s to “relieve overproduction in the United States, motivated by the increase in productivity and the decline in demand for the existence of a high number of unemployed due to the technological changes that were taking place ”.

The decade of the ’20s then resulted in a great juncture of the capitalist system. Thus, from that time, the massive circulation of capital (money) occurred precisely through the purchase and sale of products, that is, through consumption.

In addition, consumption is one of the main meters of  gross domestic product (GDP)  of a country.

Types of consumption

In macroeconomics, it is possible to distinguish between:

  • Private consumption:Represents the value of purchases of products and services contracted by families and private companies.
  • Public consumption:State purchases.

The problem with consumption

From the point of view of the sustainable economy, the big problem of consumption is that a large part of the world’s population does not produce, but does consume.

Therefore, it is becoming increasingly necessary to create a system that normalizes this situation and helps each consumer to assign some kind of productive role, however small, to keep the planet functioning properly.

 

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