Abstinence, a term describing the way in which capital can be accumulated. It was first used in this sense by Nassau Senior.
Capitalaccumulation consists of the production of capital goods (buildings, machinery, raw materials, etc.) which are used with other factors of production to produce consumer goods. The production of capital goods requires the use of factors that could have been employed to produce consumer goods. Current consumption is therefore reduced in order to increase the output of consumer goods in the future. The capital goods could not have been produced if the community had used all its income to satisfy its current wants. Capitalaccumulation therefore requires the sacrifice of some current consumption in favor of future consumption.
Senior defined abstinence as 'the conduct of a person who either abstains from the unproductive use of what he can command, or designedly prefers the production of remote to that of immediate results'. There are two elements in this definition. First, capital accumulation consists of the conversion of current income into future income; but if the loss of current income is permanent, the 'abstinence' is said to be the psychic (i.e. imagined) cost or disutility of saving. Secondly, capital goods have varying rates of turnover; their products take different lengths of time to produce or mature. In this context there is 'waiting', that is, foregoing present con-sumption in the expectation of enjoying increased consumption in the future. It is this 'abstinence' that is used in economics to indicate the 'waiting' required for the accumulation of capital. It is not 'abstinence' in its everyday sense of disutility or moral abstemiousness.
Abundance, a situation in which human needs for goods and services can be met fully: the opposite of scarcity. It would require unlimited supplies of almost all conceivable commodities. The existence of a price is evidence of scarcity; goods available in abundance (like air) can command no price. Abundance is impossible as long as people's wants are not limited. Since it is hard to conceive of productive resources capable of meeting unlimited needs, and since the demand for leisure would also have to be fully met, it is not clear how pro-duction would take place at all. There may often be an abundance of particular goods or services, but the underlying condition of scarcity seems likely to be present always in the human environment. Utopias, such as those of Sir Thomas More and Karl Marx, imply abundance in the full sense of the word.
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