Thursday, March 13, 2008

Robert Skidelsky on Adam Smith

Robert Skidelsky writes in the Cyprus Mail on ‘The moral vulnerability of markets’:

‘Adam Smith wrote that “consumption is the sole end and purpose of production”. But consumption is not an ethical aim. It is not positively good to have five cars rather than one. You need to consume in order to live, and to consume more than you strictly need in order to live well. This is the ethical justification for economic development. From the ethical point of view, consumption is a means to goodness, and the market system is the most efficient engine for lifting people out of poverty: it is doing so at a prodigious rate in China and India.

Robert Skidelsky is a distinguished professor emeritus of political economy and best known for his magnificent biographies of John M. Keynes. In this article (here) he makes a moral case against rampant consumption based on envy, greed and (above all) high level borrowing.

However, I think his use of part of a sentence from Wealth Of Nations to support his case is not quite sound, because he uses an argument of Adam Smith (about the need to oppose ‘producer interests’ in favour of consumer interests) as an argument against consumption.

Here is the full sentence within the full paragraph:

Consumption is the sole end and purpose of all production; and the interests of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident, that is would be absurd to attempt to prove it. But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end of all industry and commerce.’ [WN IV.viii.49: p 660]


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