Lecture
J. Keynes introduced the concept of absolute and relative needs.
According to J. Keynes, there are absolute needs, which a consumer feels regardless of the situation they find themselves in, and relative needs, which are felt when the satisfaction of needs elevates the consumer above others.
Absolute needs can be satiated; relative needs cannot.
This is why people whose standard of living has risen in absolute terms often tend to feel that their position has worsened if others now have better goods than they do. Luxury for some becomes a simple necessity for others (A. Cotta). Examples of absolute needs:
• for food, housing, clothing, spiritual development, movement, information.
Example of a relative need:
• the need for actually existing goods and services that ensure the physical and spiritual development of the individual.
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