The ultimate utilization of goods and services by consumers, excluding the products used in the production of other goods (i.e., the machinery used to make the goods). The term is derived from the Latin consumere, to use up, generally referring to food, which, in the Middle Ages and Early Modern period, constituted commodity consumption for most people. While the majority of one's income was spent on food in the 16th century, by the 18th century more of the population had become consumers in the modern sense of the word. Consumption has evolved to include the use of products or goods for one's satisfaction beyond immediate needs. This subjective view is associated foremost with the economist and political philosopher Jeremy Bentham (1748-1832).
Consumption, primarily determined by income and price, is closely linked to production and the wholesale and retail trades, thus creating the foundation of a modern capitalist society. While manufacturers seek to increase consumption through advertising and marketing, modern governments are ultimately able to control the levels of consumption through taxation. Although taxation, to an extent, limits the amount of disposable income, thus affecting what can be spent on service and goods, growth is supported by fiscal innovations, such as the stock exchange and consumer credit and related interest rates.
Consumption, central to most economies and globalization, is typically the main component, and one of the primary determinants, of the growth of a country's gross domestic product (GDP). However, growth in consumption is increasingly associated with issues such as environmental degradation, poverty, hunger, and even the rise in obesity.
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