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THE LIMITS OF MERCANTILE ADMINISTRATION: ADAM SMITH AND EDMUND BURKE ON BRITAIN’S EAST INDIA COMPANY

Published online by Cambridge University Press:  24 July 2019

Gregory M. Collins
Gregory M. Collins*
Affiliation:
Yale University, Department of Political Science.
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Abstract

It is often claimed that Adam Smith and Edmund Burke held similar views on matters relating to political economy. One area of tension in their thought, however, was the institutional credibility of Britain’s East India Company. They both argued that the Company corrupted market order in India, but while Smith supported the termination of the firm’s charter, Burke aspired to preserve it. This article examines why they arrived at such divergent conclusions. It argues that the source of Burke and Smith’s friction arose from the dissimilar frames of reference through which they assessed the credibility of the Company. Burke examined the corporation’s legitimacy through the lens of British prescriptive, imperial, and constitutional history, yet Smith evaluated it as part of his larger attack on the mercantile system. These different frames of reference were responsible for the further incongruities in their thought on the Company relating to the role of prescription and imperial honor in political communities, the qualifications of traders to rule, and the appropriate tempo of policy reform. This article concludes that, even with such differences, the two thinkers’ respective criticisms of the Company illustrate the threat that monopolies pose to the liberal order.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 41 , Issue 3 , September 2019 , pp. 369 - 392
Copyright
Copyright © The History of Economics Society 2019 

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Footnotes

The author would like to thank Jimena Hurtado, Sarah Johnson, David Bromwich, and the anonymous reviewers for their constructive feedback on this article, a version of which was presented at the 114th Annual Meeting of the American Political Science Association.

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