David Hume (1711-1776) and James Steuart (1712-1780)
David Hume is best known for his work on political philosophy. However, he wrote a series of essays on money, population and international trade which must rank among the major economic writings of the 18th century. Certainly they influenced Adam Smith and have a sparkling quality that still makes them worth reading today. His statement of the so-called specie-flow mechanism constituted his answer to the mercantilist concern with the maintenance of a chronic surplus in the balance of payments. He also put forward what is now known as the 'theory of creeping inflation' and advocated the notion that political freedom flows from economic freedom. James Steuart was a British mercantilist, the last in a long line stretching back to the 16th century. He advocated the entire armoury of mercantilist policies: the regulation of foreign trade to induce an inflow of gold, the promotion of industry by inducing cheap raw material imports, protective duties on imported manufactured goods, encouragement of exports, particularly finished goods because they are labour-intensive, control of the size of population by emigration and immigration to keep wages low, all capped by a denial of Hume's argument that an inflow of gold will only raise prices and thus drive gold abroad.
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Political Economy 114 Winter 57287
Sentiments Journal of the History of Philosophy 221 January 5179
A. S. SKINNER Adam Ferguson Adam Smith argued argument aspiration effect balance of trade balance of wealth banks borrowing Cantillon capital circulation classical commodities consumption David Hume discussion domestic economic activity economic development economic growth economic thought economists eighteenth century employment equilibrium essay exchange economy funds history of economic Hume's Ibid important increase industry influence inland trade Jefferson JOURNAL OF ECONOMICS Kames labour level of aspiration luxuries M. A. AKHTAR manufacturing ment mercantilist Millar modern monetarism monetarist monetary Montesquieu nature output paper money Physiocrats Political Economy population position problem production profits proportion public credit public debt quantity of money quantity theory rate of interest result Scottish Sir James Steuart social society specie stage of inland statesman Steuart's analysis subsistence supply and demand surplus taxes theory of economic tion Viner wages Wealth of Nations writings