Adam Smith on consumption as the only end and purpose of production
The Scottish moral philosopher Adam Smith (1723–1790) was the author of two books, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).
In Book IV of Wealth of Nations, Smith explores two different systems of political economy, beginning with the mercantile system. Mercantilism was the reigning political ideology of Smith’s day, and the one against which he argues in this book. (When Smith refers to “the very violent attack I had made upon the whole commercial system of Great Britain” (26 October 1780, Letter from Adam Smith to Andreas Holt), the attack is Wealth of Nations and the commercial system in question is mercantilism.)
In Smith’s conclusion of the Book IV discussion of the mercantile system, he explains why it is so wrongheaded:
Consumption is the sole end and purpose of all production; and the interest 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 it 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 and object of all industry and commerce. (IV.viii.49)