Capacity to consume

The recent appearance of books concerning American consumption, particularly its potentialities, has created the concept capacity to consume. Yet authors of such books have made little attempt to define the concept or to recognize its major implications. Capacity to consume can be defined as the power to use goods and services in the satisfaction of human wants. There are four determining factors of such capacity: (1) wants; (2) goods and services available; (3) time and energy; and (4) purchasing power. The importance of purchasing power usually has been recognized. The Brookings Institution study, Americds Capacity to Consume, strongly emphasizes the income aspect. But the other three factors are also important in bringing about consumption, especially when viewed as consumption of particular goods and services. Wants must exist and goods and services must be available. As for time and energy- they are factors resembling purchasing power since they are needed to make wants effective, that is, to transform wants into demand.