12 - Hume’s Principles of Political Economy

Summary

David Hume's essays were “the cradle of economics,” suggested John Hill Burton, in his important biography of Hume. Although this may be a biographer's exaggeration, there can be no doubt that Hume's work provided an important contribution to political economy as a discipline, together with a significant critique of the “mercantile” system that was later attacked by his friend Adam Smith.

ECONOMICS: THE BACKGROUND

Mercantilism is difficult to define. As the historian P.J. Thomas put it: “Mercantilism has often been described as a definite and unified policy or doctrine, but that it has never been. In reality it was a shifting combination of tendencies which, although directed to a common aim - the increase of national power - seldom possessed a unified system of policy, or even a harmonious set of doctrines. It was a very complicated web of which the threads mingled inextricably.” In the seventeenth and eighteenth centuries the object of policy was the enhancement of the power of the nation state, a strategy that was to be attained in a number of ways, at least one of which was economic. The power of this state was to be enhanced by the accumulation of treasure through trade, the maximization of employment, and the encouragement of population growth.