underconsumption and overproduction
underconsumption and overproduction(MARXIAN ECONOMICS) the tendency of capitalist economies to generate insufficient demand, and hence insufficient consumption (underconsumption) to absorb all that is produced (overproduction). Taking the wider perspective of a possible future economy in which production is for ‘use’ or ‘need’, rather than profit, i.e. that which an economy might theoretically be capable of producing, ‘underconsumption’ will also involve underproduction. The problem in accepting a theory of‘underproduction’, however, is that finding a means of avoiding underconsumption and overproduction has proved elusive in real world economies (see ECONOMIC SURPLUS). see also CRISES OF CAPITALISM.
Collins Dictionary of Sociology, 3rd ed. © HarperCollins Publishers 2000