ABSTRACT
If ‘income’ is to be a measure of economic performance, it must relate to the object for which economic activity takes place. The object of economic activity is one of the few issues on which there seems to be general agreement.
Consumption is the sole end and purpose of all production.
(Smith, 1776: vol. 2, 159)Human effort and human consumption are the ultimate matters from which alone economic transactions are capable of deriving any significance.
(Keynes, 1930: vol. 1, 134)All production is for the purpose of ultimately satisfying a consumer. … Consumption – to repeat the obvious – is the sole end and object of all economic activity.
(Keynes, 1936: 46 and 104)