Human needs, consumerism and welfare

Abstract Adam Smith considered consumption the sole end and purpose of all production. This presupposes a sound connection between consumption and welfare. The consumerist conceptualisation of this connection suggests that the amount of consumption equals welfare and the level of production can consequently be an indicator for welfare. The limits and problems of production measures are widely accepted. Yet, indicators like GDP remain the focus of mainstream economic theory and policy. We trace the origin of this lock-in back to the axiom of authentic and stable preferences. The suggested alternative stems from literature about human needs in heterodox economics and psychology. This literature incorporates the relevance of social aspects and cultural change for welfare. It turns out that consumerism can be a threat to well-being and welfare, rather than a requirement for it.