{"resolved":true,"match_type":"uuid","source_type":"original_book","book_id":"10f0f318-a2eb-4ea9-8798-d4fb0304f8c3","title":"Time for Things Labor, Leisure, and the Rise of Mass Consumption","author":null,"edition":null,"publisher":null,"year":null,"isbn":"9780674250529","requested_by":"printed_page","book":{"source_type":"original_book","book_id":"10f0f318-a2eb-4ea9-8798-d4fb0304f8c3","id":"10f0f318-a2eb-4ea9-8798-d4fb0304f8c3","uuid":"10f0f318-a2eb-4ea9-8798-d4fb0304f8c3","title":"Time for Things Labor, Leisure, and the Rise of Mass Consumption","normalized_title":"timeforthingslaborleisureandtheriseofmassconsumption","author":null,"edition":null,"publisher":null,"year":null,"isbn":"9780674250529","isbns":["9780674250529","9780674250536","9780674979512"],"parsed":true,"ai_readable":true,"document_type":"book","page_count":355,"navigation_url":"https://workshop.closeclaw.top/ai/book/10f0f318-a2eb-4ea9-8798-d4fb0304f8c3","title_url":"https://workshop.closeclaw.top/ai/title/Time%20for%20Things%20Labor%2C%20Leisure%2C%20and%20the%20Rise%20of%20Mass%20Consumption","fixed_page_url_template":"https://workshop.closeclaw.top/ai/book/10f0f318-a2eb-4ea9-8798-d4fb0304f8c3/page/{printed_page}","path_api_url_template":"https://workshop.closeclaw.top/api/ai/book/10f0f318-a2eb-4ea9-8798-d4fb0304f8c3/page/{printed_page}","read_url":"https://workshop.closeclaw.top/api/ai/read/10f0f318-a2eb-4ea9-8798-d4fb0304f8c3","page_url":"https://workshop.closeclaw.top/api/ai/books/10f0f318-a2eb-4ea9-8798-d4fb0304f8c3/page","search_url":"https://workshop.closeclaw.top/api/ai/books/10f0f318-a2eb-4ea9-8798-d4fb0304f8c3/search"},"page":{"printed_page":68,"pdf_page":76,"physical_index":76,"physical_index_base":0,"printed_page_status":"recognized","page_sha256":"d19b3e0531938bebadd11b0d516f99638465d9f02644043c8f0e0b63ea0e5f10"},"chapter":"FOR","content":"The failure of the rate of savings to increase as a proportion of income as real wages increased runs, as mentioned, in some tension with economic theory.39 J. M. Keynes (1936) long ago posited as a “law of consumption” that as real income increases, spending will also increase, but not in proportion to increasing income, with savings making up the diference between rising real wages and consumer spending. Keynes, like many other economists, thought that the marginal propensity to consume decreases as income increases: “It is obvious that a higher absolute level of income will tend, as a rule, to widen the gap between income and consumption” and therefore “as a rule .  .  . a greater proportion of income [will be] saved as real income increases” (1936, p. 97).40 The reasoning here, which is fairly intuitive, is, once more, that the marginal benefits of consumption decline as income goes up, and so, all things being equal, with higher incomes we should expect a shift from consumer spending to saving.41 Although Keynes does not spell out the point, presumably part of his thinking was that, as real income rises, the benefit of having savings (as a kind of insurance against misfortune) increases relative to that of immediate consumption.\n\nBut as we have seen, Keynes’s assumption about the marginal propensity to consume (which simply echoed the received wisdom of his discipline) is not borne out by the pattern of consumption in the United States in the twentieth century. Had increasing income been used to increase savings, then the failure of work hours to fall substantially as hourly wages rose would perhaps make more sense. Household savings ofer some protection against unpredictable events, such as illness or unemployment. And as discussed in the previous section, funneling more income into savings as earnings increase might be expected against the background of the quite substantial increase in life expectancy over the course of the century, in conjunction with the emergence of the institution of retirement. Yet household saving in the United States was oddly unresponsive to the combination of increasing real wages during the working years and increased need for savings to fund retirement.\n\nMoreover, not only did household savings rates not increase with rising real income, but the use of credit, the antithesis of savings, expanded over the course of the century. Martha Olney shows how, following World War I, the practice of installment buying spread rapidly across the economy. The beginning of the collapse of inhibitions against borrowing can be traced to the\n\n68\n\nTime for Things","previous_page":67,"next_page":69}