Consumer Sovereignty or Producer Sovereignty?

Source: EconLog
by Pierre Lemieux

“With the idea of ‘consumer sovereignty,’ standard economics may seem to claim or to assume that the utility of consumers is more important than the utility of producers. Notwithstanding the impossibility of scientific interpersonal comparison of utility, one objection is that this hierarchy is arbitrary, normatively if not also positively. Since any working person and any rentier is both a consumer and a producer, the utility of one is indistinguishable from the utility of the other. Moreover, many socialists and many traditional conservatives have argued (against classical liberals) that it is in his role as a producer that an individual’s life is significant. Thus, the objection goes, an economic system based on the sovereignty of the producer would be as efficient as, if not more efficient than, one mistakenly founded on consumer sovereignty.” (07/24/22)