Foster and Catchings

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Pre-Keynesian American underconsumption theorists, their main theses being worked out in Profits (1925) and Money (1928). They argued that insufficient consumer income is what leads to collapses in consumption and hence profits, prices and outputs. They base their theory on a primitive but clumsy version of a multiplier-accelerator mechanism. If retained company profits are hoarded (rather than being lent out), then consumer income is insufficient for consumers to absorb output. They argued that even if the firm invests this hoarded money itself (and thus pays the income out to workers), the problem is not solved: increased investment increases demand, yes, but it also pushes out output even further. The imbalance between aggregate demand and supply, Foster and Catchings argue, will thus maintain itself.

Their theory contains a fatal flaw in the "long-run", but seen in a short-run, dynamic manner, it is reminiscent of that of Malthus during the General Glut controversy. They publicly offered a cash award to any economist who could prove their argument flawed. Dozens upon dozens of people submitted proofs (e.g. Friedrich Hayek, 1929), but while they acknowledged minor errors, Foster and Catchings maintained that their central thesis remained correct. Apparently, Foster and Catchings had early sympathizers in Paul H. Douglas and Charles F. Roos.

William Trufant Foster, 1879-1950.

• Shall we Abandon the Gold Standard?, 1922.
• Edison-Ford Commodity Money, 1923.
• Profits, with W. Catchings, 1925.
• Business Without a Buyer, with W. Catchings, 1927.
• Money, with W. Catchings, 1928.
• The Road to Plenty, with W. Catchings, 1928.
• Apparently an innovative educator, he was the first president of Reed College - and the writer of its "fight song"!

Waddill Catchings, 1879-1969.- (1)

• Profits, with W.T. Foster, 1925.
• Business Without a Buyer, with W.T. Foster, 1927.
• Money, with W.T. Foster, 1928.
• The Road to Plenty, with W.T. Foster, 1928.
• Obvious Facts of Business, 1936.
• Progress and Plenty, 1939
• Bias Against Business, 1956
• Do Economists Understand Business?, 1955.
• Money, Men and Machines, with C.F. Roos, 1958.
• Businessman and economist, worked in several iron and steel companies in New York and Ohio.

Resources on Foster and Catchings

• "The Road to Plenty: A Review of Foster and Catchings' pre-Keynesian Analysis" by Howard Katz (1977).
• "Money or Your Life" by E.C. Riegel, preface to his Private Enterprise Money (c. 1944)
• "Foster and Catchings - Amerikanske underkonsumpsjonister" by Preben Munthe, 1997, Ekonomisk Debatt (Swedish, PDF)

免責条項、© 2002-2004 Gonçalo L. Fonseca, Leanne Ussher, 山形浩生