ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Expansion of Luxury Goods and Immiserisation of the Poor

Expansion of Luxury Goods and Immiserisation of the Poor Ranjit Sau FAST growth in one sector may have adverse effects on other sectors of the economy; it may even lead to an absolute deprivation of some sections of the population. The Seventh Plan of India aims at further accelerating the expansion of certain goods which are, in fact, items of luxury consumption that mostly the rich can afford. Economics literature is fond of classifying commodities under two heads; capital goods, and consumer goods. Rarely are the latter subdivided into essential, and luxury goods. Occasionally one comes across the category of what is called wage goods, no doubt; but luxury goods are hard to come by in economic theory, and are much less investigated. Classical theory is preoccupied with corn. The neoclassical theory of general equilibrium makes no such distinction at all; product-mix in it has no impact on income distribution. On the other hand, luxury goods do appear in Sraffa (1960, pp 6-7); but they are assigned a passive role in the theoretical structure, Marx (1885, pp 406-16), in the analysis of simple reproduction, subdivides Department II into necessities of life, and articles of luxury, the latter entering the consumption of only the capitalist class. But again luxury goods as such do not have the pride of place in the Marxian theory of value and accumulation. In Kalecki (1971) luxury goods, or "consumption goods for capitalists", seem to be accorded a more respectable mention as constituting a separate sector, but they do little else. Luxury goods, we believe, are an under-estimated category in economic theory.

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Back to Top