Sources
Help build the largest human-edited directory on the web.
Submit a site - Become an editor
Wikipedia. Licensed under the GNU Free Documentation License.
Are you an expert in this subject? Join the discussion and share your knowledge at Wikipedia.org.
General glut
From Wikipedia, the free encyclopedia
The General glut problem is a problem identified within the classical political economy of the era of Adam Smith and David Ricardo. The problem is that, as labor becomes specialized, if people want a higher standard of living, they must produce more. However, producing more lowers prices and leads to the need to produce yet more in response. If those who have money choose not to spend it, then it is possible for a national economy to become glutted with all of the goods it produces, and still be producing more in hopes of overcoming the deficit. While Say's Law supposedly dealt with this problem, successive economists came up with new scenarios which could throw an economy out of General equilibrium, or require expansion through conquest, which became termed imperialism. It was never considered that since humans always want more, a "glutted" market would simply find unmet desires and satisfy them.
 |
This economics or finance-related article is a stub. You can help Wikipedia by expanding it. |