CONSUMPTION (Lat. consumptio, a con suming, from con.sunicre, to consume, from cum-, together suincre, from sub, under ± cmcre, to buy). One of the divisions—with production, exchange, and distribution—into which the sub ject of political economy is commonly divided. In the greater part of the works upon the sub ject, consumption follows the divisions above noted, and the subject has generally been treated in a stepinotherly fashion. It seems to have been assumed that the consumption of goods, the goal of all economic effort, sufficiently explains itself. Such treatment as is found deals with a few well-defined aspects. One of these has been the discussion of luxury, and the respective effects upon the economic order of wasteful and careful personal expenditure. In further examination of this subject attention has been called to the objects of personal expenditure. An examina tion of household budgets, especially those of the laboring classes, has given rise to an extensive and interesting literature. Attention was first directed to this line of investigation by the French economist Le Play and the German stat istician Engel (q.v.). Much consideration has also been given under the head of consumption to the effects upon the economic order of the various forms of taxation.
It is obvious that consumption cannot be con fined to the consideration of personal expendi ture—that it is an integral part of the processes of production: and in this sense consumption has been defined as the 'withdraw-al of goods from the market,' and would thus include not only direct consumption of goods for the satisfaction of immediate wants, but also the indirect con sumption of goods in the production of other goods. it is this view of the subject which has
in later years led to the attempt to correlate the phenomena of consumption more closely with the other economic processes. The stimulus seems to have been given by German economists, who have directed attention to the fact that the ultimate goal of all economic effort is the satis faction of human wants. From this it was a natural step to a closer analysis of the human wants themselves, and this analysis has led up to the newer economic doctrine of which in Eng land Marshall (q.v.), on the Continent of Europe the Austrian writers and in the United States Clark (q.v.) and Patten are the leading expo nents. Their view is well stated in Marshall's Principles of Economics (London, 1800-91), in which consumption or demand is given the first place in the discussion. The analysis of the forces which awaken the demand for goods, thus giving direction to the national production, has given rise to many new views in economies, and has reopened the discussion of fundamental prin ciples. Such a development corresponds to the actual development of modern life in which the rapid strides of physical and mechanical science seem to have thrown for the time being questions of the limitations of human powers by physical conditions into the background. See EXCHANGE; POLITICAL ECONOMY; PRODUCTION.