A couple of weeks ago I contracted strep throat. It was debilitating.
As someone who has endured multiple bouts with malaria, suffered through typhoid fever, and survived COVID-19, I expected to overcome strep throat without struggle. I was wrong. There was struggle, and my experience with this infection, coupled with a short essay by the brilliant Deirdre McCloskey, has taught me an important lesson about the ultimate goal of an economy.
In her essay, Quit Worrying and Learn to Love Trade With China, McCloskey writes this, “The goal of an economy, as Adam Smith taught us, is consumption, not jobs or production.” Contracting strep throat brought this statement to life.
Once I initially got sick, all I could think about–and do–was figure out a way to relieve the pain in my throat. At this point, I did not know I had strep throat and so I consumed my way to knowledge, treatment, and better health.
I consumed information on the Internet to try and diagnose why I felt a sharp pain in my throat whenever I swallowed; I consumed cold medicines to help alleviate the pain; I consumed tea with honey to help soothe my throat; I consumed pain relievers and fever reducers to help with my condition; I consumed sick days offered by my employer; I consumed water, vitamin C drinks, and more water. No matter what I consumed however, I didn’t seem to get better. And so, I consumed the services of nurses at an urgent care facility close to my home. While I was there, I consumed tests for the flu, COVID-19, and strep throat. All tests, but strep throat, came back negative. And there, just like that, the road to recovery began. But so did the consumption of my treatment.
The nurse prescribed Amoxicillin–an antibiotic–for me. I picked it up at my local drugstore and began consuming it. She also prescribed several pain relievers which I also purchased and also promptly consumed too. Today, as I write this, thankfully I am back to almost perfect health.
And so, what is the goal of an economy? It is simple: consumption.
It may seem a flimsy or insubstantial goal but upon further reflection, I am convinced that there is no higher purpose for an economy than its ability to enable average men and women and boys and girls to simply consume.
What could be more important than enabling people to consume education, food, healthcare, leisure, knowledge, religion, friendships, dignified jobs, laughter, good governance, feelings of safety, social mobility, and perhaps most important of all, hope?
Does your economy enable people to consume hope that their lives and the lives of their children will improve over time?
Nothing is more important than consumption. Not jobs. Not production. Not even equality. Consider an economy where everyone is equal but no one can consume what they need to make progress.
How can we build economies where the vast majority of people have the chance to consume the products and services that will help them make progress?
Innovation is the answer. But not just any type of innovation, market-creating innovations. Market-creating innovations transform complicated and expensive products into products that are simple and affordable so many more people can access them. These innovations set off a domino effect that serve as the foundation for building prosperous societies where consumption–not nonconsumption (the opposite of consumption)–becomes the norm.
As much progress as the global economy has made over the past three centuries, the world is still replete with nonconsumers. Today, too many people don’t have access to simple and affordable products and services that can help them make progress. A few weeks ago, as I laid in bed struggling with strep throat, I couldn’t help but think about the billions of people in economies where consumption, especially consumption of healthcare, was difficult or, worse, impossible.
Economies are a complicated hodgepodge of many components. There are infrastructures to build and manage; institutions to develop and sustain; cultures to preserve and forgo; not to mention debts to pay and funds to raise. But at the core of every economy, the goal should be to fuel consumption for its average citizens. Once this happens, prosperity and flourishing will be within reach.