Underconsumption is the term we’re now using to describe the thesis that we are living in a world of excess supply. The novelty here – as I pointed out yesterday – is not that the world is oversupplied – and therefore lacking in developed economy private capital investment, but rather that the oversupply situation is longstanding.
We had two periods of undersupply after the two World Wars in the twentieth century, the rest of the last 100 years has been dominated by economic depression and falling real wages in the developed world.