I Don't Buy it

Adam Smith wrote “consumption is the sole end and purpose of all production” (68). Economies divide labor so they can mass-produce for mass-consumption. Societies mass-consume because consumption improves quality of life. The consumption Smith is referring to is not just of necessary goods. He finds benefit in the division of labor’s ability to spread “universal opulence…to the lowest ranks of the people” (62). Smith alludes to the idea that consumption makes us happy, or at least better off. He notes how accommodation for even the peasants under a division of labor becomes “simple and easy” (63). Yet his hidden assumption that we live to consume – that consumption improves our quality of life – does not seem wholly true.

There is evidence of a link between wealth and happiness. And evidence exists that wealth generates happiness because we spend it: in 2006, the United States had a negative savings rate, meaning Americans consumed even more than they earned.

However, the positive relationship between wealth and happiness decreases with income. After you afford life’s necessities – food, water, shelter – you no longer enjoy wealth to nearly the same degree. Humans consume to live; they do not live to consume.

So Smith’s primary issue with division of labor misses the point. He worries that “the man whose whole life is spent in performing a few simple operations…generally becomes as stupid and ignorant as it is possible for a human creature to become” (68). But this man becomes more than stupid - he becomes discontent. He hates his job and becomes dissatisfied with the consumption benefits that his job provides. The opportunity costs associated with added work, including family time, travel, and leisure outweigh the increased consumption power. In short, his quality of life decreases despite increasing consumption.

Western Europe provides an example. While Western Europeans and Americans have comparable qualities of life, Americans work longer days and more days. The threshold above which Europeans value leisure, family etc. more than consumption is lower than in the United States, which goes to prove that a) there is a threshold and humans do not only aim to maximize consumption and b) views of consumption are social constructs, not universal laws of human nature. Societies may link quality of life with consumption, but not all do, and the strength of the link will vary by society.