Is Consumption the Sole Purpose of Production?
Contemplating Adam Smith's conclusion about productivity.
The New Year is upon us and my winter vacation is drawing to a close. My period of rest, relaxation, and dissipation is almost up; I return to college in two days. As I prepare to buckle down for classes, clubs, and co-curricular activities, I find myself pondering the motivation behind this academic productivity. Is production an end in itself, merely as a means to some end, or is there another answer? Not having forgotten everything from fall term, the following excerpt from The Wealth of Nations recurred as I considered this question: “Consumption is the sole end and purpose of all production…” Adam Smith is so confident in this conclusion that he describes it as “so perfectly self-evident that it would be absurd to attempt to prove it.”
I do not find Smith’s conclusion “perfectly self-evident.” I will not attempt to refute it wholesale, but I cannot agree that consumption is the sole end of production. To be sure, production for its own sake does seem ridiculous. For example, building homes that nobody will live in, cars that nobody will drive, or growing food that nobody will eat seems pointless at best and wasteful at worst. These goods are produced for consumers in exchange for goods and services—most often represented by money—valued by producers.
When people go to work, they do so to create something others value so that they have the power to purchase and consume those things that they value. When I strive to do well at college, I am making an investment in my future earning potential so that I can do the things I’ve done during my time off: purchase gifts for loved ones, enjoy delicious (and expensive) meals with my family and friends, and travel hundreds of miles to see my girlfriend. A hearty debate regarding the extent to which people, myself included, produce to consume such goods, services, and experiences will be debated fiercely ad infinitum, but to suggest that this consumption is the one and only reason behind production strikes me as dubious.
If future consumption were the singular reason for my academic “production”, broadly (and perhaps generously) understood, I would put in only as much work as required to attain my desired GPA, degree, internship, job offer, salary, etc. I don’t do this. Instead, I take classes, take them seriously, and put in the costly intellectual labor of time, energy, and focus necessary to master the material to the best of my ability. I do this because there is something intrinsically valuable, virtuous, and deeply satisfying about the act of high-quality production in all domains: material, intellectual, physical, and social. Perhaps this enjoyment of the act of production can be described as simply a different kind of consumption. In that case, I must agree entirely with Smith. However, I don’t believe this is the case—at least, this is not how I interpret Smith—and so I must disagree with his conclusion.
I am excited to return to school for two reasons, then. I am eager to do what must be done at college so I can afford the life I wish to lead thereafter. I also know that I will enjoy the mental exertion required to understand game theory and the political economy of China1 in and of itself.
Two of the courses I am taking this winter quarter are Econ 35: Game Theory and Econ 15: Political Economy of China.