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David Hume on how the prosperity of one’s neighbors increases one’s own prosperity (1777)

The Scottish philosopher David Hume (1711-1776) argued that one should not be jealous of the prosperity of one’s neighbors as this provides them with the means to trade with you to mutual benefit:

Having endeavoured to remove one species of ill-founded jealousy, which is so prevalent among commercial nations, it may not be amiss to mention another, which seems equally groundless. Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbours with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish, but at their expence. In opposition to this narrow and malignant opinion, I will venture to assert, that the encrease of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbours; and that a state can scarcely carry its trade and industry very far, where all the surrounding states are buried in ignorance, sloth, and barbarism.

Having endeavoured to remove one species of ill-founded jealousy, which is so prevalent among commercial nations, it may not be amiss to mention another, which seems equally groundless. Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbours with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish, but at their expence. In opposition to this narrow and malignant opinion, I will venture to assert, that the encrease of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbours; and that a state can scarcely carry its trade and industry very far, where all the surrounding states are buried in ignorance, sloth, and barbarism.

It is obvious, that the domestic industry of a people cannot be hurt by the greatest prosperity of their neighbours; and as this branch of commerce is undoubtedly the most important in any extensive kingdom, we are so far removed from all reason of jealousy. But I go farther, and observe, that where an open communication is preserved among nations, it is impossible but the domestic industry of every one must receive an encrease from the improvements of the others. Compare the situation of Great Britain at present, with what it was two centuries ago. All the arts both of agriculture and manufactures were then extremely rude and imperfect. Every improvement, which we have since made, has arisen from our imitation of foreigners; and we ought so far to esteem it happy, that they had previously made advances in arts and ingenuity. But this intercourse is still upheld to our great advantage: Notwithstanding the advanced state of our manufactures, we daily adopt, in every art, the inventions and improvements of our neighbours. The commodity is first imported from abroad, to our great discontent, while we imagine that it drains us of our money: Afterwards, the art itself is gradually imported, to our visible advantage: Yet we continue still to repine,° that our neighbours should possess any art, industry, and invention; forgetting that, had they not first instructed us, we should have been at present barbarians; and did they not still continue their instructions, the arts must fall into a state of languor, and lose that emulation and novelty, which contribute so much to their advancement.

About this Quotation:

The 16th century French philosopher Michel de Montaigne had propounded the commonly held view that “the gain of one was the loss of another” and this lay at the base of mercantilist economic policy - that if France profited from trade with England, then it must have been at the expense of the English. David Hume was a strong supporter of free trade and he took great pains to show how the mercantilism of his day was a “narrow and malignant opinion” which did not understand both the social and economic benefits of trading with one’s neighbours. In this essay “On the Jealousie of Trade” Hume argues that the home nation benefits from being able to buy and sell goods with its neighbours, and all the more if they are becoming prosperous and more able to buy foreign goods. With increasing wealth, trade becomes both deeper and broader as more regions are able to buy more goods and more kinds of goods. Another benefit was that inventions and improvements made by one nation become available to other nations which are in “open communication” with each other. In his mind, free trade should be applied not just to goods but also to ideas, so that all nations may “advance”.

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