Search

The literature is abundant with studies about income inequality, consumption, public and household debt but scarce with studies about the corporations and their corporate power. This paper shows that corporate power influences increased consumption in order to secure its investments and provide sufficient demand. Secondly, rising consumerism influences growing household and public debt with multiple transmission mechanisms that work simultaneously and reinforce each other. Thirdly, growing household and public debt increase inequality, disabling the government to invest in education, health care, infrastructure or social transfers, and preventing the people from investing in their education or increasing their savings and, consequently, their wealth and financial independence. Finally, the inequality causes an increase in corporate power. People who are impoverished and thus unequal in comparison with the production owners and capitalists are also weaker in the bargaining process. They cannot improve their position, so the corporate power rises completing the cumulative and circular causation. DOI: 10.15458/85451.46