April 18, 2021


Book Review: A Philosopher's Economist: Hume and the Rise of Capitalism by Margaret Schabas and Carl Wennerlind (Mark G. Spencer, LSE US Centre)

Chapter Four situates Hume's economic thought in the context of his broader concerns with moral improvement. As Hume put it in 'Of the Rise and Progress of the Arts and Sciences':

Thus industry, knowledge, and humanity, are linked together by an indissoluble chain, and are found, from experience as well as reason, to be peculiar to the more polished, and, what are commonly denominated, the more luxurious ages. (114)

It is in that context that Hume's praise of middling-sort merchants makes sense. And it is why he could write that 'The same age, which produces great philosophers and politicians, renowned generals and poets, usually abounds with skillful weavers, and ship-carpenters' (132). 'We cannot reasonably expect', postulated Hume in another memorable line, 'that a piece of woollen cloth will be wrought to perfection in a nation, which is ignorant of astronomy, or where ethics are neglected'.

Chapters Five and Six present Hume's treatment of money, banking, international trade and public finance. On these topics the man of letters wrote 'theory with concrete policy recommendation in mind' (142), including for Scotland. Hume discovered the 'specie-flow mechanism' (144), building on Thomas Mun and others. He 'was strongly committed to any methods that would promote the "universal diffusion and circulation" of money' (162). And he advocated for low interest rates, while appreciating that money was a 'complex phenomenon'; it had 'a will of its own' (176). Hume thought, as did his American friend Benjamin Franklin, that free commerce between countries -- not a 'jealousy of trade' -- would increase wealth and foster global peace. An unmanageable public debt put all at risk, however.

A concluding, seventh, chapter provides a survey of Hume's 'imprint' on economics in his time and later. Part of Hume's impact was second-hand, through his best friend's book -- Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Hume's influence is traced to nineteenth- and twentieth-century economists as divergent as John Maynard Keynes, Friedrich Hayek and Milton Friedman, among many others.

Few readers of this book will challenge that Schabas and Wennerlind 'demonstrate that Hume was engaged in thinking and writing about economics for his entire adult life and that his contributions are extensive and significant'. At the core of the volume's textual evidence are Hume's fifty moral, political and literary essays, including the twelve essays in Political Discourses (1752). But all of Hume's major philosophical and historical writings are referenced. Some scholars may resist the authors' strongest claim: 'An inquiry into the ideal economic conditions to promote political stability and peace more strongly connects Hume's entire corpus of writings, from his Treatise on through to his History of England and posthumous Dialogues, than anything drawn specifically from his epistemology or metaphysics. We do not make this claim lightly' (13). Their book also shows that Hume's histories were central -- more than his abstract philosophy -- to Hume's goals.

Posted by at April 18, 2021 9:38 AM