The Analysis Of China’s Insufficient Domestic Demand Based On Marxist Economics —The Cause And The Fundamental Solution Path

Different from the meaning of the shortage of total demand(or effective demand) in Western Economics, in Marxist Economics, the insufficient demand is seen as the specific performance of the contradiction between the production and realization of the surplus value. The essence of China’s insufficient domestic demand is relatively the lack of the purchasing power of consumer demand which compared to the excess capacity. Keynes’s theory of effective demand can not be used to solve our demand shortage for it’s emphsis on the management of investment demand, unreasonable explaination of the insufficient consumer demand, and it’s overly expansionary policy practice which easily lead to the further deterioration in insufficient demand.Marx believed that consumer demand is fundamently realized by the restriction of the ownership of production relations. the logic behind this is that consumer demand depends on the distribution of incomes, and the distribution relationship is determined by the relations of production (ownership relations). For the inherent contradictions in the capitalist mode of production, the problem of overproduction and insufficient consumer demand can not be solved under the conditions of capitalist private ownership. Marx’s analysis about the inevitability of the lack of consumer demand in capitalism tells us that, in a general sense, we should explore the root cause of the shortage of domestic demand from the perspective of ownership relations of production.Empirical analysis shows that the substantial decline of the public ownership in our ownership structure,which resulting in a significant wide in income gap, thus causing the insufficient purchasing power of consumer demand in our society as a whole is the root cause of insufficient domestic demand.Taking the distribution according to labor as the main body of the initial distribution on the basis of public ownership is the fundamental policy of expanding domestic demand. Furthermore,we should play the scientific role of non-public economy on expanding domestic demand, and properly understand the mixed-ownership economy.The key lies in expanding domestic demand is the improvement in initial distribution relationship. For the redistribution can not change the basic pattern of the initial allocation which is determined by the ownership relations of production, the views and policy practices which rely solely on the regulatory role of the redistribution can not narrow the income and demand gap fundamentally. we should known that the initial distribution is the basis and prerequisite of the redistribution. Under market economy, distribution according to labor can be achieved as the dominant of the initial distribution. Government should work hard to achieve the distribution according to labor in the initial distribution through the deepening of the reform of the initial distribution.Meanwhile, redistribution also plays a regulatory and complementary role in the expansion of domestic demand significantly. Determined by the basic socialist economic system, our country’s redistribution system has important features which is different from capitalist countries. In order to establishing and perfecting the socialist redistribution system with Chinese characteristics, the government should strengthen it’s functions in regulating income redistribution and should innovate redistribution mechanism on the basis of solving the outstanding issues in the fields of tax, social security and transfer payments.