A Philosopher's Economist

Hume and the Rise of Capitalism

Margaret Schabas, Carl Wennerlind

• Publisher: University of Chicago Press
• Year: 2020
• ISBN:
  9780226691251
• Topic: Philosophy
• Subtopic: Philosophy History & Theory

Reconsiders the centrality and legacy of Hume's economic thought and serves as an important springboard for reflections on the philosophical underpinnings of economics. Although David Hume's contributions to philosophy are firmly established, his economics has been largely overlooked. A Philosopher's Economist offers the definitive account of Hume's "worldly philosophy" and argues that economics was a central preoccupation of his life and work. Margaret Schabas and Carl Wennerlind show that Hume made important contributions to the science of economics, notably on money, trade, and public finance. Hume's astute understanding of human behavior provided an important foundation for his economics and proved essential to his analysis of the ethical and political dimensions of capitalism. Hume also linked his economic theory with policy recommendations and sought to influence people in power. While in favor of the modern commercial world, believing that it had and would continue to raise standards of living, promote peaceful relations, and foster moral refinement, Hume was not an unqualified enthusiast. He recognized many of the underlying injustices of capitalism, its tendencies to promote avarice and inequality, as well as its potential for political instability and absolutism.Hume's imprint on modern economics is profound and far-reaching, whether through his close friend Adam Smith or later admirers such as John Maynard Keynes and Friedrich Hayek. Schabas and Wennerlind's book compels us to reconsider the centrality and legacy of Hume's economic thought—for both his time and ours—and thus serves as an important springboard for reflections on the philosophical underpinnings of economics.

CHAPTER 1

“A Rising Reputation”

Hume’s Lifelong Pursuit of Economics

As the second-born son of a Scottish laird, David Hume entered the world as David Home in 1711 with neither wealth nor title. On coming of age, Hume received an annual stipend of fifty pounds, a meager sum that forced him to practice considerable austerity. His first effort to augment his annuity was to work as a clerk for a Bristol merchant, during which time he changed his name from Home to Hume. While living in London in his late twenties and for part of his thirties, Hume considered himself “a good Oeconomist,” meaning that he lived within his means; he also acquired a reputation for dining at his friends’ homes but avoided the custom of tipping the servants (NHL, 26). Notwithstanding this youthful disposition, in later years as his income rose, Hume became known for his generosity and hospitality.1 By his fifties, he could boast an annual income of a thousand pounds, earned primarily from the sale of his books. At age fifty-two, Hume bought a large flat in one of the more fashionable districts of Edinburgh and, in 1770, built a small house near Princes Street where he spent the last six years of his life.

Many poor gentlemen in Hume’s position would enter the law or become a clergyman or soldier, and most would marry and have children. Hume did none of these. As a young man, Hume was accused of fathering a child out of wedlock; he had already departed for England when his name was cleared in court. There were later infatuations, but the young Hume lacked the means to marry in accordance with his station and remained a bachelor his entire life. Hume’s family assumed that he would enter the law, the profession of his father, Joseph Home (1681–1713), and maternal grandfather, Sir David Falconer (c. 1640–1685), who had served as President of the College of Justice. But by 1729, Hume had abandoned that pursuit, later describing his four years of study of the law as “nauseous” (HL, 1:13). The church was not an option for Hume; while observant in his youth, he confessed later in life that “I am not a Christian” (HL, 1:470). Hume did, however, wear a British uniform while serving as secretary and judge advocate under General James St. Clair (1746–48), but he did not train as a soldier nor engage in combat.

Rather than take up the sword, Hume derived his income from his pen, as clerk, tutor, secretary, librarian, statesman, and, above all, “Scholar & Philosopher” (HL, 1:13). As Hume observed at the start of his autobiography, “almost all my life has been spent in literary pursuits and occupations” (E-MOL, xxxi). Nevertheless, Hume never held an academic position. His candidacies for a professorship at both the University of Edinburgh (1745) and the University of Glasgow (1752) were each denied, purportedly for his irreligious writings. He also struggled to make a name as a scholar. Although his first and now best-known work, A Treatise of Human Nature (1739–40) did not gain the recognition he had expected, his first two volumes of Essays, Moral and Political (1741–42) proved more successful. He was given the princely sum of 150 pounds for each print run, but five years later, with nothing new to show, he was forced back to dependency on his elder brother, John Home of Ninewells. In a heartfelt letter to his mentor Lord Kames, at age thirty-six, Hume worried about “continuing a poor Philosopher for ever,” noting that it was too late for him to enter the law (NHL, 24–26).

Hume’s decision to remain a poor philosopher bore fruit in the years 1747 to 1751, while residing at Ninewells, the family estate.2 In just three years, Hume wrote his two Enquiries (1748 and 1751), A Dialogue (1751), and substantial parts of the Four Dissertations (1757)—namely, A Dissertation on the Passions, based on Book 2 of the Treatise, and The Natural History of Religion. Less well known is the fact that he completed, in 1750, a work entitled A Dissertation on Geometry and Natural Philosophy that was intended as one of the Four Dissertations but was never published and subsequently lost.3 By 1751, Hume had also drafted the Dialogues concerning Natural Religion that was published posthumously in 1779. Most important for our study here, he completed the highly acclaimed work on economics, the Political Discourses (1752). Hume’s only remaining major work after these three intensive and productive years was not in philosophy but did the most to lift him out of his financial straits. The History of England (1754–62) took about five years to gain a following; however, by 1760 he could boast that “the copy-money given me by the booksellers, much exceeded any thing formerly known in England” (E-MOL, xxxviii). It is estimated that Hume earned at least 3,200 pounds from the sales of his History and became one of the first Britons to live comfortably as the author of nonfiction.4

Hume did not live entirely on book royalties. Several appointments provided modest incomes, the first in 1745 as a tutor and companion to the Marquess of Annadale, one of the wealthiest aristocrats in England and the second, in 1746 and 1748, in the service of General St. Clair. In each case, Hume disputed a breach of contract on the terms of employment, and he subsequently wrote dozens of letters to secure full payment from the marquess and the promised half pension from the British army. From 1752 to 1757, Hume was keeper of the Advocate’s Library in Edinburgh, receiving a meager stipend but gaining access to an invaluable collection for his research on English history (E-MOL, xxxvi). In 1763, Hume returned to salaried work for the British government, first as secretary and then, in 1765, as acting ambassador at the embassy in Paris. Two years later, in 1767, he moved to London to serve as undersecretary of state for the Northern Department until 1769. Hume had already attained financial independence; presumably he took these posts in part for the challenge. They also came with ample pensions and, for the first time in his life, Hume could declare himself a wealthy man.

In 1776, Hume composed a short autobiographical essay “My Own Life,” that mutes his relatively turbulent path through life. Hume experienced numerous accusations of impropriety, dismissals, or rejections from suitable posts, a near excommunication from the Church of Scotland, protracted efforts to secure payments or recognitions due, and subsequent vilifications from several people he had befriended, most famously Jean-Jacques Rousseau. Hume observed in an early essay that wisdom is necessarily in short supply (E-DM, 83). Evidently, in his case what wisdom he acquired, along with his “rising reputation,” was hard earned (E-MOL, xxxvi). In contrast to the prudent and steady path taken by his closest friend, Adam Smith, Hume did not always navigate life’s shoals adroitly.

Ernest Mossner depicts Hume’s life as beset with many disappointments and intrigues, both personal and professional.5 Hume comes across as his own worst enemy, too forthright and too trusting of others who could not always see that his objective was not to offend but to enlighten. More recently, James A. Harris’s Hume: An Intellectual Biography (2015) offers an account of Hume’s life that downplays the sensationalist details that preoccupied Mossner. Harris portrays Hume’s life as segmented, broken into distinct chapters rather than unified by a single mission. Hume is depicted as a brilliant man of letters who contributed to philosophy but also to many other subjects, including economics. Mossner registers that Hume’s Political Discourses “established him at the summit of British economists,” but it is Harris who provides the substance for this accolade.6

Hume corresponded with many of the leading philosophers of his day, including Francis Hutcheson, Voltaire, Montesquieu, Rousseau, Edmund Burke, and Thomas Reid. He befriended many prominent savants, Jean d’Alembert, Denis Diderot, Comte de Buffon, and Benjamin Franklin, as well as the historians Catharine Macaulay, Edward Gibbon, and James Boswell. He was on close terms with the Scottish stadial theorists Lord Kames, Adam Ferguson, and John Millar. He also exchanged ideas with leading contributors to economics, such as Lord Elibank, Robert Wallace, Abbé Morellet, Anne-Robert-Jacques Turgot, James Steuart, Isaac de Pinto, and, last but not least, Adam Smith.

During Hume’s life he became known as “the Socrates of Edinburgh” and his native town as “the Athens of the North.”7 One contemporary, William Smellie, boasted that if one were to stand at the “Cross of Edinburgh,” at a suitable time in the day, some fifty men of genius and learning would pass in the span of a few minutes.8 Roger Emerson estimates, with considerable attention to the historical record, that there were about seven hundred Enlightened Scots in 1760.9 England might have had ten times that number and France twenty, but in total, the number of readers of philosophical works would not have exceeded thirty thousand across Europe. Hume’s success as an author, selling approximately ten thousand copies of each of his mature works, his two Enquiries, his Essays (including the Political Discourses), and The History of England, is thus remarkable.

Only Edinburgh could rival Paris in terms of contributions to philosophy during the Enlightenment.10 Hutcheson, Hume, Smith, and Reid brought Scottish philosophy to the attention of the learned world. Although Hutcheson lived in Glasgow, Reid in Aberdeen, and Smith only briefly in Edinburgh, it was Hume’s city that became preeminent, mostly because as the seat of local governance, it drew the most educated elite at the time. According to Harris, the Edinburgh in which Hume retired was a very different, more secular and intellectually advanced place than the one he had lived in as a young man up through the 1750s.11 By the 1760s, professors at the University of Edinburgh whom Hume counted as friends and equals included William Cullen, Hugh Blair, William Robertson, and Adam Ferguson. He befriended the artist Allan Ramsay, who painted Hume twice, and novelists and poets such as Tobias Smollett, John Home, James Macpherson, and William Wilkie. In Hume’s opinion, these Scottish writers were the most eloquent in all of Europe.12

The Scottish Enlightenment had a strong association with the natural sciences. The Select Society of Edinburgh (1754–64) that Hume cofounded listed as its primary objective the promotion of scientific methods in agriculture, engineering, and medicine. This objective suggests that for much of the 1750s, Hume willingly if not enthusiastically kept abreast of scientific research, particularly research that led to practical results, a proclivity evident in his Treatise, Early Memoranda, and Dialogues concerning Natural Religion. Hume may have been deemed an amateur, but an amateur in the full sense of the word: a lover of knowledge including the natural sciences.13 He formed associations with Colin Maclaurin, John Pringle, Joseph Black, and James Hutton, the most eminent contributors to Scottish mathematics and science of the eighteenth century. From 1751 to 1763, Hume served as joint secretary to the Philosophical Society of Edinburgh. This society was formed in 1737 and was intended to facilitate the exchange of ideas between physicians and naturalists. Over time, it grew to include intellectuals such as Hume who were neither. At the meetings, members would present their research and sometimes conduct experimental demonstrations. The initial publications were exclusively on medical topics but, under the urgings of Maclaurin, expanded to include essays on general science. In 1754 and 1756, Hume coedited with Alexander Monro II, a leading physician, two volumes entitled Essays and Observations, Physical and Literary. A third volume was published in 1770 and includes a number of entries from the early 1760s that Hume would have edited.14

By the 1760s, the University of Edinburgh could boast one of the most prestigious medical schools in the Western world, primarily because of such scientific luminaries as Cullen, Black, and three generations of Alexander Monros.15 A sign of its sustained eminence in science is the fact that the two most prominent British scientists of the nineteenth century, Charles Darwin and James Clerk Maxwell, studied at Edinburgh. Black and Cullen were Hume’s personal physicians and attended Hume in his terminal months after a diagnosis of intestinal cancer (HL, 2:449–50). In 1754, Black was the first to isolate a new gas that he called “fixed air,” now known as carbon dioxide. In 1756, Cullen devised an important analysis of evaporation that prompted Turgot to formulate the physical theory of state change, that all substances with enough heat could expand from solid to liquid to gas. These breakthroughs discredited the Aristotelian doctrine of the elements and facilitated the establishment of modern chemistry, grounded in the discoveries of oxygen and hydrogen in the 1760s and 1770s.16 Hume’s close association with some of the leading contributors to science of his day strongly suggests he brought an informed understanding of science to bear in his plan to develop and elevate the science of economics.

We will not rehearse Hume’s personal life in much detail here. Our emphasis is rather on the various experiences and encounters that informed his economics, and moral and political thought more generally. Hume recognized the value of “a cautious observation of human life” in making “any addition to our stock of knowledge” (T, 6; EHU, 12). Hume, we will show, was ever attentive to learning about agricultural and artisanal techniques, mercantile trade, and the rise of private and public finance, and he wove these topics into his economic thought. As Emma Rothschild has noted, Hume’s Political Discourses “includes a mass of details of commercial existence.”17 Our case also emphasizes that Hume’s firsthand experience with Scotland figured prominently in his economic thought. His close contact with the leading Scottish improvers, merchants, and bankers gave him considerable opportunity to reflect on the symbiotic relationship between economic and political betterment.

It is our ambition to highlight the sense in which economic ideas and policies pervaded Hume’s entire adult life, in his publications and correspondence as well as his actions. Hume proclaims at the start of his first Enquiry, the Enquiry concerning Human Understanding (1748), that “a philosopher may live quite remote from business,” but this does not undercut the potential of philosophy to “diffuse itself throughout the whole society” (EHU, 8). Quite literally, economics was Hume’s applied philosophy, the ideal domain in which to develop his prolonged reflections of human nature. This is an underappreciated side to Hume, but one that seems obvious when one is reminded that his closest and most enduring friendship for more than twenty-five years was with Adam Smith and that one of the last books he read with care was Smith’s newly issued Wealth of Nations.

Hume’s Education and Travels Abroad

Hume was born in Edinburgh on April 26, 1711, and spent his childhood at Ninewells, a large estate in the southeast of Scotland. His father died when he was two years old. Hume was very close to his mother (1683–1745) and sister (1710–90), both named Katherine. Hume spoke glowingly of his mother, particularly her intelligence and devotion to “the rearing and educating of her children” (E-MOL, xxxii). She had come to live at Ninewells at the age of five when her widowed mother, Mary, married Hume’s paternal grandfather, John Home. Hume’s parents were thus stepsiblings, together for twenty years before their brief and purportedly happy marriage of five years. Ninewells remained Hume’s official home until his older brother, John Home, married in 1751.

In 1721, at the age of ten, Hume and his brother went together to study for four years at the University of Edinburgh.18 At the time, the University of Edinburgh was more like a preparatory college than a full-blown university. It paved the way, more often than not, for students to pursue a degree in law or medicine at one of the Dutch universities. The strong imprint of Dutch thinking on Scottish savants meant that Hume would have absorbed the ideas of Hugo Grotius, Baruch Spinoza, and Pierre Bayle, who live...