Powerful Consumer: Psychological Studies of the American Economy

by George Katona

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276 pages, Hardcover

First published October 17, 2011

Reviews

[Thomas Ray]

The Powerful Consumer, 1960, George Katona (1901-1981), HC110 C6 K33 Memorial Library

[Teresa · Rating 5 out of 5]

George Katona is the economist who discovered that consumers matter to the economy. And this classic work presents the early post-WW2 economic data that confirmed the role of consumer sentiment and income expectations in generating buying behavior that effects the entire economy without "cancelling itself out", as Keynes argued it would.

Also explains how GDP is calculated, which I found fascinating. And did you know that "consumer income" includes any money you DON'T PAY FOR RENT if you own a home? Although you're really just consuming the capital that you paid into the home when you bought it.

Well written, with lots of plain English explanation for economic concepts and virtually no mathematical models. Also provides lots of great historical data to compare with today. You can FEEL the economic prosperity of the 1950s, the enormous reserve of savings from war bonds that people finally got to spend after WW2 (though most continued to save), the "improved income equality" (that's a quote) compared to prewar Depression days, the "strong unions" (also a quote) that made people feel their income was secure, and the heady discovery of modern conveniences like cars (replaced new every 2 years!) and refrigerators (people still had ice boxes?) and TV sets and other durable goods. Not to mention new suburbs full of affordable housing for young families.

A fantastic adventure in economic time travel. The past really is a different country. Recommended.