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An Introduction to Pre-Smithian Economic Thought

Many people believe that the study of economics began with the publication of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Yet, for at least two centuries prior there had been numerous writers who had explored the area and had made substantial contributions to the field. For a list of authors who were writing on economics before Smith see the school of thought of Pre-Smithian Economists.

One of the best places to begin exploring this field is the excellent collection of texts edited by Henry C. Clark, Commerce, Culture, and Liberty: Readings on Capitalism before Adam Smith, ed. Henry C. Clark (Indianapolis: Liberty Fund, 2003). Unfortunately, this book is not available online in HTML, only in PDF. So, what we have done here is to use Henry Clark’s insightful introductions to each reading with alternative versions of the texts which we do have online in HTML.

You also might wish to hear Henry Clark talk about his book in this podcast.

See our entire collection of books on Economics, our other website Econlib which is devoted to economics, an the collection of essays on economics in The Forum.

For more information about the authors and their works see:

• Pieter de la Court (1618-1685)
• Nicholas Barbon (1623-1698)
• Dudley North (1641-1691)
• Andrew Fletcher (1653-1716)
• Thomas Gordon (?-1750) and John Trenchard (1662-1723)
• Bernard Mandeville (1670-1733)
• Charles de Secondat, Baron of La Brède and of Montesquieu (1689-1755)
• David Hume (1711-1776)
• Anne -Robert-Jacques Turgot (1727-1781)
• John Millar (1735-1801)
• Étienne Bonnot, abbé de Condillac (1714-1780)

• 1. Pieter de la Court, Political Maxims of the State of Holland (1662)

  Pieter de la Court came from a family that was close to republican circles in Holland. A cloth manufacturer himself, Pieter’s grandfather Jacques had a medallion struck with the insignia “Long live liberty!” upon the death of the stadholder William I in 1650, though Pieter’s own writings on the subject are somewhat more complex and nuanced in their orientation. His Interest van Holland (The Interests of Holland ) was mostly completed by 1661. After consulting with Jan de Witt, who suggested a few changes, de la Court brought the book out in 1662. It was an immediate bestseller, widely read and discussed, but also highly controversial. For the better part of a decade, the author and his book were subject to disciplinary procedures by church and state. De la Court attempted to balance his political interests with his writer’s interest until 1672, at which point the return of the Princes of Orange to power made his republican political ambitions moot. De la Court died in 1685. The excerpts presented here are from Political Maxims of the State of Holland, translated by John Campbell, part 1, chapters 1, 9, 14, 15, and 16. This selection is meant to provide a cross-section of the ways in which the author connected commercial considerations with political and religious ones.

  Pieter de la Court, The True Interest and Political Maxims of the Republic of Holland (London: John Campbell, Esq, 1746). Chapter: PART I.

  Accessed from oll.libertyfund.org/title/85/38151 on 2009-04-23

  The text is in the public domain.

• 2. Nicholas Barbon, A Discourse of Trade (1690)

  Nicholas Barbonwas born in London in 1623. He studied medicine at the University of Leiden in 1661, receiving his M.D. at Utrecht and becoming an honorary fellow of the College of Physicians in 1664. He then became a real estate developer, and after the fire of London in 1666, he is said to have introduced fire insurance to England. Barbon developed whole sections of London in both commercial and residential real estate. He was elected a member of Parliament in 1690 and in 1695. He also took part in the land-bank speculations of the time, founding his own landbank. He died in 1698, after directing in his will that none of his debts be paid. In addition to the work included here, he wrote an essay on money in response to Locke in 1696, arguing for devaluing the silver currency. He was known also for arguing against the “balance” of trade. The edition used here is Nicholas Barbon, A Discourse of Trade, edited by Jacob H. Hollander (1690; repr. Baltimore: Johns Hopkins University Press, 1905), and is reprinted in its entirety. One of the best-known early tracts for freedom of trade, it also discusses topics as varied as the nature of value, the role of fashion in economic life, the importance of moral dispositions such as emulation and vanity, industry and liberality in commerce, and the political effects and implications of commerce.

  Nicholas Barbon, A Discourse of Trade. A Reprint of Economic Tracts, ed. Jacob H. Hollander (Baltimore: The Lord Baltimore Press, 1905).

  Accessed from oll.libertyfund.org/title/982 on 2009-04-23

  The text is in the public domain.

• 3. Dudley North, Discourses upon Trade (1691)

  Dudley North was born the son of the fourth Baron North in 1641. It is said that he was stolen by a beggar-woman for his clothes as a child but was soon recovered. He showed no taste for book learning early in life and was apprenticed to an English merchant named Davis, who made him agent to the Turkish trade at Smyrna in 1661 and Constantinople in 1662. By all accounts, he was a vigorous and successful factor, giving life to what had been a rather sluggish trade there. He was made treasurer of the Turkey Company, and there was apparently some talk of his becoming ambassador of England to Constantinople. Having made a fortune, he returned to London in 1680, a respected man of the world, fluent in Turkish and some of the dialects of the Levant. In 1682, he was named sheriff of London, to the great dismay of the Whigs. Afterward, he became a commissioner for the customs and an agent in the treasury as well as a Tory member of Parliament from Banbury during the reign of James II. After the accession of William of Orange in 1689, he remained in London and was the subject of an inconclusive inquiry for his role in packing the juries that condemned Algernon Sidney and others in 1682. Thereafter, he was active mainly in commercial ventures until his death on the last day of 1691. The work reprinted here is Discourses upon Trade (1691; repr. Baltimore: Johns Hopkins University Press, 1907, ed. Jacob H. Hollander), and is one of the earliest attempts to theorize as a whole the workings of a market economy in England.

  Sir Dudley North, Discourses upon Trade. A Reprint of Economic Tracts, ed. Jacob H. Hollander (Baltimore: The Johns Hopkins Press, 1907).

  Accessed from oll.libertyfund.org/title/299 on 2009-04-23

  The text is in the public domain.

• 4. Andrew Fletcher, Second Discourse on the Affairs of Scotland (1697)

  Andrew Fletcher was born in 1653 to the laird of Saltoun, Sir Robert Fletcher. In his youth, he traveled much and conceived a great interest in books, old buildings, and the great cities of northern Europe (London, Paris, Amsterdam). He early plunged into a political career, becoming commissioner for his county in 1678 and again in 1681. It was then that he first took a position against a standing army. During Monmouth’s rebellion, which he supported, he shot dead a man named Dare over his use of Dare’s horse in an expedition. After being estranged from Monmouth, he was arrested and imprisoned in Bilbao on orders of the English government in 1686 and sentenced to death for treason. After escaping prison, he next fought with the Hungarians against the Turks (whom he is said to have called the “common enemy of mankind”). By now of marked republican leanings, he refused an amnesty because it emanated from the King and not the legislature. He was with William of Orange in 1688 and returned to Scotland at that time; his lands were restored to him by special act of Parliament in 1690. In the tumultuous debates of the 1700s, he led the national party against the court party on the Union question. He proposed home rule, a national militia, and annual Scottish Parliaments. As a majority drifted toward the Union position (1704-7), he had to be restrained more than once from the threat of a duel with Lord Stair and the Duke of Hamilton during sessions of Parliament. He was accused of fomenting a French invasion of Scotland for the Pretender in 1708. Acquitted, he left public life. He oversaw the construction (1710) of an innovative barley mill modeled on one he had seen in his travels to Amsterdam. He died a lifelong bachelor in September 1716. The Jacobite Lockhart said of Fletcher that he was “so steadfast to what he thought right that no hazard nor advantage, no, not the universal empire, nor the gold of America, could tempt him to yield or desert it.” The present work was written in 1698 and published as part of a somewhat larger work, Two Discourses Concerning the Affairs of Scotland (Edinburgh, 1698).

  Andrew Fletcher, Selected Discourses and Speeches: A Discourse of Government with Relation to Militias (Edinburgh, 1698); Two Discourses concerning the Affairs of Scotland (Edinburgh, 1698); Speeches by a Member of the Parlaiment (Edinburgh, 1703); A Conversation concerning a Right Regulation of Government (Edinburgh, 1704). Chapter: the second DISCOURSE concerning the AFFAIRS OF SCOTLAND; written in the year 1698

  Accessed from oll.libertyfund.org/title/1222/83366 on 2009-04-23

  The text is in the public domain.

• 5. Thomas Gordon and John Trenchard, Cato’s Letters (1721)

  

  Cato’s Letters were written by Thomas Gordon and John Trenchard. Gordon was born in Scotland of obscure origins in the late seventeenth century. He may have acquired a law degree, perhaps at Edinburgh in 1716, but he earned his early living as a tutor in languages. Shortly after moving to London, he met the older Trenchard, who had been born in Somerset in 1662 and educated in the law at Trinity College in Dublin. Leaving law for a government position in 1690, Trenchard acquired a sizable enough fortune from an advantageous marriage and from inheritances to be able to devote himself to political writing. He became an MP from Taunton in 1722, which he remained until his death the next year. Among the topics on which he earned his early reputation were standing armies (1690s), church authority, and political liberty. His writings include The Natural History of Superstition (1709) and The Independent Whig, a journal that began publication in 1720. The occasion for the publication of Cato’s Letters was the bursting of the South Sea Bubble in 1720. The work became one of the chief vehicles for conveying Lockean and radical Whig ideas on liberty throughout the English-speaking world in the eighteenth century. It began publication in The London Journal in late 1720 and continued toward the end of 1722. The selection reproduced here comes from John Trenchard and Thomas Gordon, “Trade and Naval Power the Offspring of Civil Liberty only, and cannot subsist without it” (Feb. 3, 1721).

  John Trenchard, Cato’s Letters, or Essays on Liberty, Civil and Religious, and Other Important Subjects. Four volumes in Two, edited and annotated by Ronald Hamowy (Indianapolis: Liberty Fund, 1995). Vol. 2. Chapter: NO. 64. SATURDAY, FEBRUARY 3, 1722. Trade and Naval Power the Offspring of Civil Liberty only, and cannot subsist without it. (Trenchard)

  Accessed from oll.libertyfund.org/title/1238/64487 on 2009-04-23

  The copyright to this edition, in both print and electronic forms, is held by Liberty Fund, Inc.

• 6. Bernard Mandeville, The Fable of the Bees (1723)

  

  Bernard Mandeville was born in Holland in 1670 into a family of physicians and naval officers. He received his degree of Doctor of Medicine at Leiden in 1691 and began to practice as a specialist in nerve and stomach disorders, his father’s specialty. Perhaps after a tour of Europe, he ended up in London, where he soon learned the language and decided to stay. He married in 1699, fathered at least two children, and brought out his first English publication in 1703 (a book of fables in the La Fontaine tradition). He wrote works on medicine (A Treatise of the Hypochondriack and Hysterick Passions, 1711), poetry (Wishes to a Godson, with Other Miscellany Poems, 1712), and religious and political affairs (Free Thoughts on Religion, the Church, and National Happiness, 1720). He died in 1733. His most famous work, The Fable of the Bees, or Private Vices, Publick Benefits, from which the present poem is taken (“The Grumbling Hive”), came out in more than half a dozen editions beginning in 1705 and became one of the most enduringly controversial works of the eighteenth century for its claims about the moral foundations of modern commercial society.

  Bernard Mandeville, The Fable of the Bees or Private Vices, Publick Benefits, 2 vols. With a Commentary Critical, Historical, and Explanatory by F.B. Kaye (Indianapolis: Liberty Fund, 1988). Vol. 1. Chapter: [1]The Grumbling Hive: o r, Knaves turn’d Honest. a

  Accessed from oll.libertyfund.org/title/846/66863 on 2009-04-23

  The copyright to this edition, in both print and electronic forms, is held by Liberty Fund, Inc.

• 7. Montesquieu, Spirit of the Laws (1748)

  Charles de Secondat, Baron of La Brède and of Montesquieu, was born in 1689. He came from a judicial family and became a lawyer in Bordeaux as well as a judge in its local parlement. His 1721 work The Persian Letters, an epistolary novel concerning the travels to France and Europe of some Persian noblemen, was one of the founding literary productions of the French Enlightenment, with its oblique social satire and its comparative exploration of human customs and human nature. It had sufficient impact to secure his entry into the Académie Française in 1728. His Considerations on the causes of the greatness of the Romans and their decline (1734) also made a sizable impact on contemporaries, but it was Esprit des lois (1748) that assured his immortality. That work, on which he labored for twenty years, was an exploration of the history of the law and its relations to social and political systems. It contains, among many other things, an interpretation of the English parliamentary system that was destined to be highly influential on both sides of the Atlantic. He popularized the notion that an English parliamentary system based on checks and balances, and on a systemic separation of powers, was crucial to liberty. The book was condemned, to his great dismay, by the Parlement of Paris. He died in 1755. The excerpt contained here is the full text of book 20, which is devoted to commerce.

  Charles Louis de Secondat, Baron de Montesquieu, The Complete Works of M. de Montesquieu (London: T. Evans, 1777), 4 vols. Vol. 2. Chapter: BOOK XX.: OF LAWS IN RELATION TO COMMERCE, CONSIDERED IN ITS NATURE AND DISTINCTIONS.

  Accessed from oll.libertyfund.org/title/838/71769 on 2009-04-23

  The text is in the public domain.

• 8. David Hume, “Of Refinement in the Arts” (1752)

  

  David Hume was born in 1711 into a family of modest landed wealth. After writing his masterpiece, Treatise on Human Nature, in 1739, which he complained “fell dead-born from the press,” Hume turned his talents to writings that would be more accessible to worldly as well as philosophical audiences. Thus, in the 1740s, he came out with a very successful and influential collection of Essays Moral, Political and Literary, from which the present essay is taken, which he continued to revise and expand in the 1750s. In 1752, he became librarian for the Faculty of Advocates in Edinburgh. Hume was a friend of Adam Smith, who was twelve years his junior and who acknowledged his debt both to Hume’s general philosophy and to his essays on economic subjects, such as the one chosen here. Hume also wrote a justly influential History of England (beginning in 1754) as well as important philosophical works such as Philosophical Essays Concerning Human Understanding (1748), An Enquiry Concerning the Principles of Morals (1751), and Dialogues Concerning Natural Religion (published posthumously). A notorious atheist, he died without recanting his religious views and was publicly eulogized by Adam Smith in 1776. “Of Refinement in the Arts” is the later title of an essay originally published in 1752 under the title “Of Luxury.” It contains some of his most far-reaching observations on the character of “commercial society.”

  David Hume, Essays Moral, Political, Literary, edited and with a Foreword, Notes, and Glossary by Eugene F. Miller, with an appendix of variant readings from the 1889 edition by T.H. Green and T.H. Grose, revised edition (Indianapolis: Liberty Fund 1987). Chapter: ESSAY II: OF REFINEMENT IN THE ARTS

  Accessed from oll.libertyfund.org/title/704/137528 on 2009-04-23

  The copyright to this edition, in both print and electronic forms, is held by Liberty Fund, Inc.

• 9. Turgot, Reflections on the Formation and the DistributionWealth (1766)

  

  Anne -Robert-Jacques Turgot, Baron of Aulne, hailed from one of France’s oldest and most prestigious families. Born in Paris in 1727, Turgot distinguished himself at the Sorbonne and became one of the leading protégés of the liberal intendant of commerce of the time, Vincent de Gournay. In the 1750s, he drafted a number of highly original works on the historical evolution of the human mind and on economic development, among other things, and acquired the reputation as a polymath genius. After composing several articles for the Encyclopédie in the 1750s on topics as varied as etymology and market-fairs, he dissociated himself from the project in the aftermath of the controversy of 1758 that led to its temporary suppression. In 1761, he became provincial intendant for Limousin, where he remained for thirteen years, developing a reputation for reformist vigor and effectiveness in an undynamic province. During that period, he became the leading exponent of free trade in grain, though his relations with the Physiocrat school that made that position a matter of dogma were cool. In 1774, he was elevated to controller-general of France, in which position he attempted to implement on a national scale the reforms he had reflected on, described, and attempted locally for many years. His far-reaching reforms, such as the abolition of the guilds, met with a backlash, and he was disgraced and forced from office nineteen months later in early 1776. He died in 1781. The work excerpted here, Reflections on the Formation and the Distribution of Wealth, is as close as Turgot came to writing a polished masterpiece. Written in the 1760s, it contains far-reaching discussions of topics such as money, exchange, value, and capital investment in agriculture, all set in a distinctive historical framework not dissimilar to that of Scottish historians such as Robertson and Millar. It is known that Turgot discussed economic matters with Adam Smith during the latter’s sojourn in France in the 1760s and that he corresponded with Hume, who was in Paris from late 1763 to 1766, during the same decade. He also wrote the work during the Physiocrats’ period of greatest creativity and influence. Though the work was completed by the end of 1766, it did not appear in print until 1770. The excerpt chosen begins just before section XXXI on the “birth of commerce” and ends with a general statement on the wealth of a nation (sections 28-91).

  Anne-Robert-Jacques Turgot, Reflections on the Formation and the Distribution of Riches, trans. William J. Ashley (New York: The Macmillan Co., 1898).

  Accessed from oll.libertyfund.org/title/122 on 2009-04-23

  The text is in the public domain.

• 10. John Millar, On the Origin of the Distinction Ranks (1771)

  

  John Millar of Glasgow, the son of a Scotch Presbyterian minister, was born in 1735. He grew up with his uncle on a small family estate near Glasgow after 1737. There, he studied with Adam Smith, among others, when Smith was teaching moral philosophy. Though intended for the ministry, he had doubts about the profession of faith and instead pursued the law. He served as tutor to the son of Lord Kames and came to know David Hume, whose metaphysical system he admired. He became an advocate in 1760 but abruptly changed course the next year by accepting for family reasons (he had just married) a less lucrative though more secure professorship of law at Glasgow, a post for which he was recommended by Smith and Kames. He soon had large followings of students in civil law and in jurisprudence. He also lectured on Scottish law, English law, and government. He and his wife, who had eleven children, also took in student boarders. He became a member of the Literary Society of Glasgow, where he defended Hume’s theories against those of his friend and faculty colleague Thomas Reid. He outspokenly defended Whiggish causes such as parliamentary reform, abolitionism, and American independence, and was a member of the Society of the Friends of the People. He was sympathetic to the French Revolution and opposed war against France. His main works, based on his lectures, were On the Origin of the Distinction of Ranks (1771), which was influenced by Montesquieu, Hume, and Smith, and was translated in his lifetime into French and German; and Historical View of the English Government (1787), a Whiggish history dedicated to Fox. He died in 1801. The present excerpts are taken from the third edition (1779) of On the Origin of the Distinction of Ranks (originally published in 1771 as Observations Concerning the Distinction of Ranks in Society): (Chapter 1, section VI) “The effects of great opulence, and the culture of the elegant arts, upon the relative condition of the sexes,” (Chapter 2, section II) “The influence of the improvement of arts upon the jurisdiction of the father”. These excerpts were chosen because they apply a distinctively Scottish historical method to an understanding of the condition of women in commercial society.

  John Millar, The Origin of the Distinction of Ranks; or, An Inquiry into the Circumstances which give rise to Influence and Authority in the Different Members of Society, edited and with an Introduction by Aaron Garrett (Indianapolis: Liberty Fund, 2006).

  Accessed from oll.libertyfund.org/title/287 on 2009-04-23

  The copyright to this edition, in both print and electronic forms, is held by Liberty Fund, Inc.

• 11. Condillac, Commerce and Government Considered in Their Mutual Relationship (1776)

  

  Étienne Bonnot, abbé de Condillac, was born in Grenoble in 1714 into a family of local and royal officials. He had a brother who was also an important philosophe, Gabriel, abbé de Mably. Poor vision seems to have kept him from reading until at least the age of twelve, when he began to be educated by a local priest and at the Jesuit collège. He went to Paris and the Sorbonne, and became a priest in 1740, though he said only one Mass. He came instead to know the salon scene (especially Rousseau, Diderot, d’Holbach, Helvétius, and Voltaire) and take up English philosophy with enthusiasm. In 1746, he wrote a sensationalist work in the Lockean and Newtonian traditions (opposed to Descartes), Essay on the origin of human knowledge, which argued that all the higher mental powers derive from the senses. In 1749, his work A Treatise on systems argued for human limits to our knowledge, against the disordered imagination of philosophical systems. A Treatise on the sensations (1754) deepened this line of thinking. His Course of Study (Cours d’étude), based on his tutorial of the child Ferdinand, son of the Duke of Parma (1758-67), applied these ideas to education. He became a member of the Académie Française. Diderot was among the many Frenchmen influenced by Condillac’s philosophy. In 1780, the Polish government invited him to write Logic, or the first developments of the art of thinking. That same year, he turned down an offer to tutor the dauphin’s sons; he died in 1780. The work excerpted here is his 1776 Le Commerce et le gouvernement considérés relativement l’un à l’autre. Notably, he makes subjective utility, not intrinsic quality, the touchstone of value and departs from the Physiocratic dogma that land alone is the source of all wealth, for which reason he was anathematized by that school. His ill-timed treatise was one of the most important general statements of market economics before Adam Smith, by whose work it was eclipsed. As such, it makes a fitting end to the present introduction. The excerpts here are chapters 1, 6, 7, and 8. and were chosen because they provide a useful introduction to his ideas on value and on the sources of wealth.

  Étienne Bonnot, Abbé de Condillac, Commerce and Government Considered in their Mutual Relationship, translated by Shelagh Eltis, with an Introduction to His Life and Contribution to Economics by Shelagh Eltis and Walter Eltis (Indianapolis: Liberty Fund, 2008).

  Accessed from oll.libertyfund.org/title/2125 on 2009-04-23

  This book was originally published by Edward Elgar Publishing in 1997, copyright 1997 by Shelagh Eltis and Walter Eltis. Reprinted by permission of Edward Elgar Publishing.