Luxury and Economic Development: David Hume and Adam Smith

Abstract

David Hume thought that a taste for luxury was desirable, because it promoted economic and political development (it brought down feudalism, among other things). Adam Smith's early works follow a very similar line though, unlike Hume, he saw a taste for luxury as rather contemptible despite its desirable effects. In the Wealth of Nations, however, saving is the key to growth, suggesting that spending on luxury harms growth, but Smith wanted to hang on to the arguments he had taken from Hume. This may explain a number of oddities and inconsistencies in the Wealth of Nations.

Managing brands in times of economic downturn: How do luxury brands fare?

“…Fourth, luxury brands provide prominent and controversial consumption symbols in society, viewed by some observers as the epitome of excess (for example, Sekora, 1977 ), and by others as a tonic for our humdrum world (for example, Twitchell, 2001 ). Fifth, sales of luxury goods are frequently seen as a bellwether of economic conditions ( Bils and Klenow, 1998 ;Brewer, 1998 ;Browning and Crossley, 2000 ;Kiesling et al , 2009 ).…”

How did it all begin? Adam Smith on the early and rude state of society and the age of hunters

“…This insistence on the political purpose of the four stages theory might seem to downplay its explanatory power in relation to economic development, which is how many have interpreted it (Stull 1986, Reid 1989, Meek 1971, 1976a: 225, Skinner 1982, Brewer 1998, Marouby 2004. As an all-encompassing theory of progress, it indeed demonstrates the improvement of division of labour and security of property through the stages, and culminating in the eighteenth-century British economy.…”

Changing patterns of conspicuous consumption: Media representations of luxury in second homes

“…Throughout the centuries, luxury has variously (and often controversially) been associated with the fall of civil society, greed, sin, guilt, economic growth, foreign/imported goods, capitalism, maintenance of the social hierarchy and reward (Berry, 1994; Brewer, 1998; Plato, 1930; Sekora, 1977; Sombart, 1967; Twitchell, 2002). While luxury is very difficult to define due to its socially constructed nature (Berry, 1994), this section outlines the meaning(s) of luxury utilised in this article.…”