under-consumption, theories of

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under-consumption, theories of The notion of under-consumption posits a persistent shortfall in the demand for consumption goods which creates a tendency towards overproduction and stagnation in capitalist economies. It results from the conflict between capitalists' desire to restrain the tendency of real wages to rise and their need to realize surplus value through the sale of commodities. The term has been linked to theories of imperialism and underdevelopment, in that markets in the Third World are sometimes targeted to absorb the excess commodities produced in the First.