Back To Adam Smith

Although the idea of consumer sovereignty did not originate with Adam Smith, we economists have a long tradition of tracing ideas back to that venerable figure. Writing at the dawn of the formal study of economics, Adam Smith laid out a powerful vision of the economy as an entirely voluntary process. At times, he went considerably further. For example, once while lecturing his students, Smith remarked:

an ordinary day-labourer, whom we false account to live in a most simple manner, has more of the conveniencies and luxuries of life than an Indian prince at the head of 1000 naked savages. His coarse blue woolen coat has been the labour of perhaps 100 artificers, the shearer, the picker, the sorter, the comber, the spinner, etc. as well as the weaver and fuller whose loom and mill alone have more of art in them than all the things employed about the court of a savage prince; besides the ship which brought the dies and other materials together from distant regions, and all the workmen, wrights, carpenters, coopers, smiths, etc. which have been employed to fit her out to sea and the hands which have navigated her. The iron tool with which he works, how many hands has it gone thro.—The miner, the quarrier, the breaker, the smelter, the forger, the maker of the charcoal to smelt it, the smith, etc. have had a hand in the forming it. How many have been required to furnish out the coarse linen shirt [which] he wears; the tanned and dressed-leather shoes; his bed which he rest(s) in; the grate at which he dresses his victuals; the coals he burns, which have been brought by a long land sea carriage; and other workmen who have been necessary to prepare his bread, his beer, and other food; besides the glass of which his windows are composed, production (of) which required vast labour to bring it to its present perfection, which at the same time excludes the wind and rain and admits the light, a commodity without which this country would scarcely be habitable, at least by the present effeminate and puny set of mortals. So that to supply this poor labourer about 1000 have given their joint assistance. He enjoys far greater convenience than an Indian prince. [Smith 1978: 338-9]

So, here we have a fanciful image of a poor, overburdened farmworker suddenly transformed into a sovereign consumer commanding a princely retinue of workers. Smith was writing at a time when social relations in Great Britain were turbulent to say the least (Thompson 1963). Were Smith's words meant to offer the poor some consolation, suggesting that they should be grateful for their affluence and put aside the revolutionary activities that troubled Smith's society? More likely, Smith was aiming at easing the consciences of the rich and privileged.

Smith's vision of consumer sovereignty mostly fell from view for a century and a half. By the end of the nineteenth century, workers were beginning to mount a powerful challenge to the existing order. Socialist parties were the fastest growing political organizations throughout the world. Economic and political leaders feared imminent revolution, just as they did at the time of Adam Smith.

In that environment, leading intellectuals began to counsel workers that they should not interpret their lives in terms of their unsatisfying existence as workers, but rather in terms of their experiences as consumers. The most famous call came from Walter Lippmann in his influential Drift and Mastery (1914):

Many radical socialists pretend to regard the consumer's interest as a rather mythical one But we are finding, I think, the real power emerging today is just the mass of people who are crying out against the "high cost of living." That is a consumer's cry. Far from being an impotent one, it is, I believe, destined to be stronger than the interests of either labor or capital. [Lippmann 1914: 54]

So, workers may suffer indignities at the workplace, but as consumers they are sovereign—at least according to this comforting rhetoric.

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