Hume: Philosophy of Economics

In this chapter, Erik W. Matson describes how Hume’s international theory derives from his understanding of commerce and international trade as sources of moral improvement. Drawing on Hume's ideas of technical progress and innovation, Hume’s writings are shown to convey a nascent theory of comparative advantage.Trade benefitstrich and poor countries alike, facilitating a process of mutual emulation and development. International trade, moreover, contributes in Hume's view to cultural enhancement through its effects on socialization and the consequent extensions of individual sympathy.

Cet article examine les défis épistémologiques actuels de l’économie à travers le prisme de l’épistémologie des Lumières écossaises. Smith et Hume s’étaient concentrés sur la manière dont les connaissances (provisoires et incertaines) étaient formulées, en examinant comment des circonstances différentes engendrent et soutiennent différentes théories et approches. Sur cette base, nous explorons le discours actuel sur la manière dont les économistes doivent aborder les défis épistémologiques des situations de crise et leurs causes.

I focus on the commonly shared view that Hume’s monetary theory is inconsistent. I review several attempts to solve the alleged inconsistency in Hume’s monetary theory, including the consensus interpretation according to which Hume was committed to the neutrality of money only in the long run, while he conceded that money can be non-neutral in the short run. Then, building on a monetary version of the logical fallacy of monotonic counterfactuals in the essay Of the Balance of Trade, I argue (...) for the consistency of Hume’s theory of money by ascribing to Hume a distinction between money as collectively neutral and distributively non-neutral. (shrink)

One of Hume's early biographers, John Hill Burton, described Hume's Political Discourses as "the cradle of political economy".1 "As much as that science has been investigated and expounded in later times," Burton argued, "these earliest, shortest, and simplest developments of its principles [in the Political Discourses] are still read with delight even by those who are masters of all the literature of this great subject."2 In their recent book, Margaret Schabas and Carl Wennerlind do much to vindicate Burton's claim, illustrating (...) the genius, breadth, and lasting influence, across various schools of thought, of Hume's economics.Through a careful exposition of Hume's reflections on the methodology of... (shrink)

Hume scholarship in the history of economic thought has advanced since Eugene Rotwein’s 1955 collection Writings on Economics: David Hume, later reprinted with a new introduction by Margaret Schabas. However, as Schabas and Carl Wennerlind correctly observe, “There is as yet no monograph in English devoted to a comprehensive study of Hume’s economics, let alone one that connects this body of thought to his philosophical tenets”. Hence the motivation for the two eminent historians of economic thought, both of whom have (...) specialized in Hume for a long time, finally to put out an excellent and readable book on Hume’s economic thought.Chapter 1, a survey on Hume’s biography, claims... (shrink)

Taking the Scottish Enlightenment philosopher David Hume as its subject, this book breaks new ground in focusing its lens on a little-studied aspect of Hume's thinking: his understanding of money. George Caffentzis makes both an intervention in the field of monetary philosophy and into Marxian conceptions of the relation between philosophy and capitalist development. He vividly charts the ways in which Hume's philosophy directly informed the project of 'civilizing' the people of the Scottish Highlands and pacifying the English proletariat in (...) response to the revolts of both groups at the heart of the empire. Built on careful historical and philosophical detective work, Civilizing Money offers a stimulating and radical political reading of the ways in which Hume's fundamental philosophical claims performed concrete political functions. (shrink)

Margaret Schabas and Carl Wennerlind, A Philosopher's Economist: Hume and the Rise of Capitalism, Chicago IL, University of Chicago Press, 316 p., e-book.

This essay examines Hume’s treatment of money in light of his view of the imagination. It begins with his claim that money is distinct from wealth, the latter arising, according to vulgar reasoning, from the power of acquisition that it represents, or, understood philosophically, from the labor that produces it. The salient features that Hume identifies with the imagination are then put forth, namely its power to combine ideas creatively and the principle of easy transition that characterizes its movement among (...) them. Two issues that these features explain are then discussed: first, why people take value to lie in the material of which money is made, and, second, why they assign value to what they take money to represent, namely, wealth. In both cases, the imagination creates a new relation, an illusion or fiction, that cannot be traced directly to experience. In the case of money, the faculty conjoins what is intangible (the power of acquisition) with the physical qualities of specie; in the case of property it produces a causal relation that connects persons with objects to constitute stable possession that constitutes ownership. Hume also appeals to the imagination to explain the rules of property that subsequently develop (present possession, occupation, prescription, and transference). The essay concludes by emphasizing that being based on the imagination is not in itself indicative of any instability in either money or property and the practices they enshrine, a feature they share with other phenomena (such as the self and continued existence) that Hume also traces to the same faculty. (shrink)

David Hume wrote prolifically and influentially on economics and was an enthusiast for the modern commercial era of manufacturing and global trade. As a vocal critic of the Church, and possibly a nonbeliever, Hume positioned commerce at the vanguard of secularism. I here argue that Hume broached ideas that gesture toward those offered by Max Weber in his famous Protestant Ethic and the Spirit of Capitalism (1904-5). Hume discerned a strong correlation between economic flourishing and Protestantism, and he pointed to (...) a “spirit of the age” that was built on modern commerce and fueled by religious tolerance. The Roman Catholic Church, by contrast, came under considerable attack by Hume, for fostering intolerance and draining and diverting funds. Hume recognized several of the dispositions that later appealed to Weber: an increased work ethic and tendency to frugality, enterprise, and investment in Protestant regions. A neo-Weberian literature now points to additional factors, the spread of literacy and the fostering of a network of trust among strangers, both of which Hume noted. Insofar as modern commerce both feeds upon and fosters more liberties and representative government, Hume also linked these with the advent and spread of Protestantism. My aim is not to suggest that these arguments have merit—there is good reason to question each and every assertion under the historical microscope—but rather to highlight the broader religious and cultural context in which Hume’s economics was broached. (shrink)

David Hume's contributions span every branch of human inquiry: ethics, epistemology, metaphysics, political philosophy, aesthetics, religion, and economics. While reams of scholarship have been devoted to Hume's thought, his work on economics is still relatively unexplored. In this book, philosopher Margaret Schabas and intellectual historian Carl Wennerlind provide the definitive account of Hume's "worldly philosophy." Hume, they show, was intent on getting out of the armchair and ensuring that his philosophy had practical implications-to subdue superstition, soften religious zealotry, and promote (...) harmonious relations in modern society. Part of this endeavor involved material betterment, and Hume brought to his economic thought a richly astute understanding of human agency, of how our minds work and prompt our actions. The authors paint him as the quintessential proponent of liberalism and a dedicated supporter of commercial modernization. However, they note that he was not an unqualified enthusiast-he saw the potential of modern commerce to increase debt, fuel runaway inflation, and feed factionalism in political rule, for example, and he fretted over the potential for international conflicts to spiral out of control. Given Hume's friendship with Adam Smith, and his influence over nineteenth-century thinkers as prominent as Thomas Malthus, John Stuart Mill, and Karl Marx, a serious appraisal of this side of his oeuvre is long overdue. As two of Hume's closest readers, Schabas and Wennerlind offer just that in this delightfully wide-ranging exploration of the history of philosophy and modern economic thought. (shrink)

La obra filosófica de David Hume es celebrada como una de las más importantes de un autor de habla inglesa. Tal reconocimiento se debe en gran medida a su crı́tica al concepto de causalidad, que despertó a Kant de su “sueño dogmático”.En otro plano, también es reconocida la crı́tica de Hume al sistema comercial defendido por los mercantilistas. Por lo general, las dos crı́ticas han sido estudiadas de manera aislada por distintas disciplinas historiográficas. El presente trabajo se propone abordar conjuntamente (...) el concepto de causa que Hume desarrolla en ambas crı́ticas. En su obra filosófica, Hume argumenta que el concepto de causa no es un producto de la razón, sino una creencia que proviene de la costumbre de percibir que un hecho empı́rico sucede a otro. Por otra parte, en su obra económica se apoya en leyes económicas causales referidas al sistema de comercio mundial para mostrar el carácter contradictorio de la defensa del sistema comercial llevado adelante por los mercantilistas. (shrink)

This paper examines some connections between Hume’s epistemology in his Treatise of Human Nature and his political economy. I make three claims: First, I argue that it is the development of Hume’s account of the faculty of reason in Book I of the Treatise that leads him to emphasize social science—including political economy—and the humanities over more abstract modes of intellectual inquiry. Second, I argue that Hume’s conception of reason has implications for his methodology in political economy. His perception of (...) human reason leads him to deploy a method of qualified generalization that emphasizes the by-and-large nature of theoretical statements. Third, when it comes to policy matters, the method of qualified generalization in theory cashes out in terms of practical maxims. I suggest that two central maxims in Hume’s political economy derive from his views of the usefulness of economic liberty and the coordinating nature of the status quo. (shrink)

The theories of Locke, Hume and Kant dominate contemporary philosophical discourse on property rights. This is particularly true of applied ethics, where they are used to settle issues from biotech patents to managerial obligations. Within these theories, however, the usual criticisms of private property aren’t even as much as intelligible. Locke, Hume and Kant, I argue, develop claims about property on a model economy that I call “Frontier Town.” They and contemporary authors then apply these claims to capitalist economies. There (...) are two problems with this application: First, we’ll be considering the wrong kind of property: The only property in Frontier Town are means of life. Critics, however, object to property in concentrated capital because they associate only this kind of property with economic coercion and political power. Second, the two economies differ in central features, so that very different claims about empirical consequences and hence about fairness and merit will be plausible for each. This second problem, I argue, is a consequence of the first. I conclude that Frontier Town theories are more likely to distort than to illuminate property issues in capitalist economies. (shrink)

In the year 1749 Adam Smith conceived his theory of commercial liberty and David Hume laid the foundation of his monetary theory. These two intellectual developments, despite their brevity, heralded a paradigm shift in economic thinking. Smith expanded and promulgated his theory over the course of his scholarly career, culminating in the publication of The Wealth of Nations in 1776. Hume elaborated on the constituents of his monetary framework in several essays that were published in 1752. Although Smith and Hume (...) devised their economic theories in 1749 independently, these theories complemented each other and to a considerable extent created the structure of classical economics. (shrink)

ABSTRACTIf war is an inevitable condition of human nature, as David Hume suggests, then what type of societies can best protect us from defeat and conquest? For David Hume, commerce decreases the relative cost of war and promotes technological military advances as well as martial spirit. Commerce therefore makes a country militarily stronger and better equipped to protect itself against attacks than any other kind of society. Hume does not assume commerce would yield a peaceful world nor that commercial societies (...) would be militarily weak, as many contemporary scholars have argued. On the contrary, for him, military might is a beneficial consequence of commerce. (shrink)

The title of this article refers to one of the best-known essays written by David Hume, That Politics may be reduced to a Science. Hume assumed that politics was a science because it admitted of some general truths, which could not be varied by human beings. He adopted a similar stance, albeit indirectly, in the case of economics, discovering several general truths concerning the origins of wealth, money and international trade. At times, however, he was far from being consistent and (...) this undermined these truths. Consequently, it can be argued that, from his perspective, economics was a science on a theoretical level, but it lost this character at a more practical level. Similar doubts can be raised when it comes to Hume’s role in the history of economic thought. In some respects he was an original thinker, but several of his key concepts resembled to some extent ideas that had been put forward by ‘mercantilists’, especially those ‘mercantilists’ who were active in his native Scotland in the first decade of the 18 th century. (shrink)

If Hume is considered cosmopolitan in his ethics at all, he is said to be so through his anti-mercantilist approach to commerce. Prevailing commercial interpretations attribute to Hume a cosmopolitanism that is best described as instrumental and supervenient. I argue that Hume’s principles lead to a cosmopolitan ethic that is more demanding than commercial interpretations recognize. Hume’s cosmopolitanism is more than merely supervenient and its instrumentality is such that cosmopolitan regard becomes inseparable from healthy patriotic concern. I show sympathy and (...) duty, not merely justice, central to Hume’s cosmopolitanism and address how Hume’s moderate cosmopolitanism might be enacted in society. I suggest Hume’s view can contribute to contemporary cosmopolitan discourse, aiding both those forms with which it is consonant and the practical ends of otherwise opposed, Kantian forms. (shrink)

Many Hume scholars have partially anticipated the essential links between his magnum opus—the History of England—and other writings, but we lacked an appropriate theoretical framework. According to Andrew Sabl,2 the key to the breakthrough is provided by “coordination theory.” The approach to Hume’s work through the lens of twentieth-century political theories has been preceded, to take one example, by Russell Hardin, who envisions Hume’s notion of convention as a prototype of game theory. Hardin also mentions coordination theory in relation to (...) game theory,3 but it is Sabl who elucidates its comprehensiveness and significance, and successfully grasps the essential features of Hume as a political theorist. The most... (shrink)

Axios's Essence of... Series takes the greatest works of practical philosophy and pares them down to their essence. Selected passages flow together to create a seamless work that will capture your interest from page one. This newest volume in the series is dedicated to David Hume who is ranked as one of the greatest Western philosophers and economists. You will find three main sections on Hume (Religion, Morals, and Economics) as well as a section on his life.

This paper traces missing links in the history of economic thought. In outlining Hume's concept of 'the reflexive mind' it shows that this opened frontiers between philosophy and psychology which Bertrand Russell denied and which logical positivism in philosophy and positive economics displaced. It relates this to Hume's influence not only on Smith, but also on Schopenhauer and the later Wittgenstein, with parallels in Gestalt psychology and recent findings from neural research and cognitive psychology. It critiques Kant's reaction to Hume's (...) claim that one may assume but cannot prove cause and effect and how Samuelson's Foundations of Economic Analysis has been Kantian but wrong in claims for axioms that are universal truths. It illustrates how Samuelson's presumption that language and mathematics are 'identical' was as mistaken as the logical atomism of Russell and the early Wittgenstein, relates this to Kleinian splitting, denial and projective identification and suggests that recovery of greater realism in economics needs to regain links with such philosophy and psychology. (shrink)

Diese Essays können als literarische Neu- und Umformulierung der philosophischen Absichten des Traktats gelten und lassen sich auch als Reaktionen Humes auf aktuelle Probleme lesen. In ihnen dokumentiert sich ein Politikverständnis, das aus der Tradition einer umfassenden philosophia practica lebt und eingebettet ist in eine weite, gesellschaftstheoretische Perspektive. Die Ausgabe bietet die erste umfassende Neuausgabe der Essays in deutscher Sprache seit 1800.

MARGARET LYNN SCHABAS (Toronto, 1954) is professor of philosophy at the University of British Columbia in Vancouver and served as the head of the Philosophy Department from 2004-2009. She has held professoriate positions at the University of Wisconsin-Madison and at York University, and has also taught as a visiting professor at Michigan State University, University of Colorado-Boulder, Harvard, CalTech, the Sorbonne, and the École Normale de Cachan. As the recipient of several fellowships, she has enjoyed visiting terms at Stanford, Duke, (...) MIT, Cambridge, the LSE, and the MPI-Berlin. In addition to her doctorate in the history and philosophy of science and technology (Toronto 1983), she holds a bachelor of science in music (oboe) and the philosophy of science (Indiana 1976), a master’s degree in the history and philosophy of science (Indiana 1977), and a master’s degree in economics (Michigan1985). -/- She has published four books and over forty articles or book chapters in science studies. Some of the journals in which her articles can be found are Isis, Monist, History of Political Economy, Public Affairs Quarterly, Daedaelus, Journal of Economic Perspectives, and Studies in the History and Philosophy of Science. Her first book, A world ruled by number (1990) examines the emergence of mathematical economics in the second half of the nineteenth century. Her second book, The natural origins of economics (2005), traces the transformation of economics from a natural to a social science. She also has two co-edited collections, Oeconomies in the age of Newton (2003), with Neil De Marchi, and David Hume’s political economy (2008), with Carl Wennerlind. She is currently writing a monograph on Hume’s economics, as well as articles on the history and philosophy of bioeconomics. She is currently president of the History of Economics Society. -/- EJPE interviewed Margaret Schabas at the University of British Columbia in March 2013. In this interview, she recounts her earliest foray into the history and philosophy of economics, the conceptual trade between economics and natural science, and her most recent undertaking: the history and philosophy of bioeconomics. (shrink)

Robert Nozick addresses the idea of egalitarian redistribution in an argument standardly considered original: the “Wilt Chamberlain Argument”. However, this argument is found in David Hume's An Enquiry Concerning the Principles of Morals, first published in 1751. Placing this argument within a Humean and Hayekian, rather than a Lockean or Kantian, perspective radically changes its import for issues of economic justice. Rather than vindicating the radical individualism of Nozick and other libertarians, applied to our circumstances using Hume's conventionalist and evolutionary (...) account of justice, Hume's Wilt Chamberlain argument vindicates moderate redistribution constrained by the rule of general laws and the goal of fostering innovation and industriousness. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Reviewed by:David Hume’s Political EconomyJohn RobertsonCarl Wennerlind and Margaret Schabas, eds., David Hume’s Political Economy (London and New York: Routledge, 2008), Pp. xiii + 378. ISBN 978-0-415-32001-6, Cloth, $160. ISBN 978-0-415-49413-7, Paper, $44.95.This collection of papers is as welcome as it is overdue. As its editors observe in their introduction, the reference point for studies of Hume’s economic thinking has remained Eugene Rotwein’s “Introduction” to his volume David Hume: (...) Writings on Economics (Madison: University of Wisconsin Press) since its publication in 1955. The conference from which these papers derive was convened forty-eight years later, in 2003, and the volume was another five years in preparation (while this review, in turn, has taken its own time). But David Hume’s Political Economy is not a random collection of conference papers: editorial direction has ensured a substantial publication, and an important contribution to Hume studies. The individual contributions fall into four broad categories, with fruitful overlaps between them. These are: (1) Hume’s biography and his immediate Scottish context; (2) the philosophical framework of Hume’s economic thinking provided by his account of human nature; (3) Hume’s treatment of money; and (4) the reception of Hume’s economic writings in France, as a starting-point for exploring his contribution to the wider European Enlightenment debate over the prospects of the modern commercial economy.Two established scholars of the Scottish Enlightenment open the volume. Roger Emerson identifies “Scottish contexts for David Hume’s political-economic [End Page 123] thinking” (10), and Ian Simpson Ross traces “the emergence of David Hume as a political economist” (31) in a more strictly biographical perspective. Emerson draws on his knowledge of Scottish improvers, most notably Lord Ilay, third duke of Argyll, and explores the several ways in which Hume could have been aware of their activities and the issues they had to confront. Ross directs attention to specific episodes in Hume’s life that may have stimulated Hume’s interest in economic affairs. By their use of the conditional and the subjunctive, both contributors acknowledge that the suggested connections are speculative: for reasons which he left to be inferred, Hume was reluctant to apply his arguments explicitly to local, Scottish circumstances. But as Ross demonstrates in the case of Hume’s friendship with Isaac Pinto, and later in the volume Robert Dimand documents in the matter of Hume’s memorandum on Canadian paper money, there are still details of Hume’s biography to be filled out. As more Hume letters become available, it is likely that further such episodes may come to light: Hume’s biography is not an exhausted subject.A fine essay by Christopher Berry on “Hume and Superfluous Value” (49) opens the second set of contributions. Re-visiting Hume’s intervention in the Luxury Debate, Berry argues that Hume rejected the Stoic ideal of poverty embodied in Epictetus’s view that slippers were simply for the protection of the foot indoors, and any ornamentation was superfluous “luxury.” Instead, Hume deliberately attached value to the superfluous. It was precisely the indulgence of luxury, the enjoyment of a more beautiful slipper, which aroused and sustained the “industry” of men, whence derived the enrichment of society and the strengthening of the power of the sovereign. Other contributions in this group are less successful. Till Grüne-Yanoff and Edward McClennen target Albert Hirschman’s thesis that in a commercial society the passions are tamed by the increasing importance attached to the particular passion of “interest.” Instead of relying solely on “interest,” Hume envisages an evolution or “refinement” of the passions, in which reason “serves” the passions by helping individuals to determine how to achieve their ends (86). Quite why this process should be termed a “natural history of the passions” (86) is, however, unclear, as is the extent to which the authors wish to rehabilitate “reason” in Hume’s explanation of action. Richard Boyd seeks to extrapolate from Hume’s writings a concept of “civility” adequate to the pluralism of modern commercial society. Working hard with exiguous evidence—“civility” is mentioned in passing on only a few occasions in... (shrink)

This collection of papers is as welcome as it is overdue. As its editors observe in their introduction, the reference point for studies of Hume’s economic thinking has remained Eugene Rotwein’s “Introduction” to his volume David Hume: Writings on Economics (Madison: University of Wisconsin Press) since its publication in 1955. The conference from which these papers derive was convened forty-eight years later, in 2003, and the volume was another five years in preparation (while this review, in turn, has taken its (...) own time). But David Hume’s Political Economy is not a random collection of conference papers: editorial direction has ensured a substantial publication, and an important contribution to Hume studies. The .. (shrink)

This essay argues that while the so-called "Hume's Early Memoranda" has long been regarded as Hume's juvenile work composed before A Treatise of Human Nature, there is significant internal and external evidence to the contrary. M. A. Stewart's recent thesis made a new attempt to move the period of composition to the early 1740s. I seek in the following essay to date the composition even later, in the latter half of the 1740s. Re-examined in this new light, the memoranda credibly (...) emerges as a work of preparation for Hume's political economy to be published as Political Discourses in 1752. Historical and biographical details thus reconstructed around the process of Hume's composition of the memoranda reveal the hitherto-unrecognized complexity with which Hume's economic thought was gradually formed in close and profound connections with his moral, political and historical thinking. (shrink)

Hume insisted that property serve as the foundation of society because it best promotes the greatest amount of industry and therefore contributes to public utility. Industry thus plays a central role in Hume’s theory of justice. Given that Hume extensively discussed the social, political, cultural, and moral implications of industry in the Political Discourses, I suggest that Hume’s economic writings should be understood as an integral part of his overall philosophical project. In offering a parallel reading of the Enquiry Concerning (...) the Principles of Morals and the Political Discourses, I argue that Hume’s theory of justice does not resolve into a mere theory of property, as many philosophers complain, but rather, emerges as a rich account of how justice both generates the greatest material affluence and promotes the formation of the most virtuous society. (shrink)

For the last 30 years I have been writing a trilogy on Locke’s, Berkeley’s, and Hume’s philosophies of money. With the publication of Clipped Coins. Abused Words and Civil Government; John Locke’s Philosophy of Money and Exciting the Industry of Mankind; George Berkeley’s Philosophy of Money and with the last volume on Hume in preparation, the trilogy is now almost completed.

The book covers Hume's biographical development; his self appraisal as a 'man of letters'; his philosophical writings with emphasis on their direct and indirect economic content; his self-aware criticism of his approach to the Treatise and the development of his rhetorical understanding of the needs/interests of his readers/potential readers; his rhetorical turn and Ciceronian adjustments to his writing within the genre of the essay, including his two Enquiries; his political essays and his nine essays conventionally classified as economic. The work (...) aims to show how the Treatise and its vicissitudes gave rise to his economics. The work takes a broad approach to Hume and his writings on economic topics from the Treatise, through the Enquires and on to his political and economic essay. The work also explores Hume's textual method and charts the move from abstruse philosophy to a Ciceronian engagement with social conditions and problems as developed in the Political Discourses. In addition, Hume's extensive use of analogies is also brought into clearer focus than is found in other texts. Overall, the book will be of great use to both postgraduates and undergraduates alike. (shrink)

Monetary policy is a modern idea of which David Hume is generally considered a precursor. Moreover, thanks to Milton Friedman and Robert Lucas, he is often presented as one of the first and most illustrious endorser of monetarism. This paper argues against this view, and in agreement with Joseph Schumpeter, that Hume's contribution to economics, while not insignificant, cannot claim any real novelties. It offers an interpretation of Hume as a descendant of a pre-modern understanding of money rather than a (...) forerunner of modern monetary ideas, and as a scholar exposing common ideas of his time rather than a prophet of economic theories developed centuries later, and argues that there is little in Hume that resembles today's monetary policy prescriptions. (shrink)

This chapter contains section titled: Hume as Economist Hume's Philosophical Economics Luxury, Knowledge, and Economic Development Money and International Trade Quantity Theory Reconsidered Manners and Diversity of Economic Development Conclusion: Economics and Civilization References Further Reading.

Contemporary economists deem virtually every piece of reasoning and argumentation in economics a model, forgetting that there may well be other conceptual tools at hand. This article demonstrates that David Hume used thought experiments to make some remarkable breakthroughs in monetary economics, and that this resolves a longstanding debate about an apparent inconsistency in Hume, between the neutrality and non-neutrality of money. In the actual world, money is never neutral for Hume; only in thought experiments does a sudden growth in (...) the money stock result in an identical and hence neutral increase in the price level. Thought experiments isolate tendencies but do not lend themselves to direct confirmation. Moreover, Hume’s dislike for the French model builders, Melon and Quesnay, captures an important juncture in mid eighteenth-century economic discourse regarding the warranted level of abstraction and of idealization. (shrink)

Hume’s Political Discourses won immediate acclaim and positioned him as an authoritative figure on the subject of political economy. This volume of thirteen new essays definitively establishes the central place of political economy in Hume’s intellectual endeavor, as well as the profound and far-reaching influence of his theories on Enlightenment discourse and practice. A major strength of this collection is that the contributors come from a diverse set of fields – philosophy, economics, political science, history and literature. This promotes a (...) comprehensive reading of Hume’s political economy, taking into account his entire set of writings and correspondence, in a way that captures his polymathic genius. Hume’s analyses of trade and commerce not only delve into the institutions of money and markets, but also human agency, the role of reason and the passions, manners and social mores. Hume sought general principles but also concrete applications, whether he grappled with the problem of economic development, with the debates on luxury consumption, or with the mounting public debt. This book is a key resource for students and researchers in the areas of economic and political philosophy, history of economic and political theory, and the history of ideas. (shrink)

In their classic analyses, Hobbes and Hume argue that offensively violating a covenant is irrational because the offense ruins one’s reputation. This paper explores conditions under which reputation alone can enforce covenants. The members of a community are modeled as interacting in a Covenant Game repeated over time. Folk theorems are presented that give conditions under which the Humean strategy of performing in covenants only with those who have never offensively violated or performed with an offensive violator characterizes an equilibrium (...) of the repeated Covenant Game. These folk theorems establish that for certain ideal settings Hobbes’ and Hume’s arguments against offensively violating covenants are compelling. However, these ideal settings presuppose that the community has certain mechanisms that generate common knowledge of the identities of those with whom one should perform. I analyze the results of computer simulations of the interactions in a community whose members must rely upon private communication alone. The computer simulation data show that in this community, reputation effects cannot effectively deter members from offensively violating covenants. I conclude that Hobbes’ and Hume’s warnings against offensive violation are compelling only on condition that the community is sufficiently structured to generate common knowledge among its members. I also conclude that even in such structured communities, the Humean strategy is not the uniquely “correct” policy. (shrink)

David Hume's monetary theory has two standard yet inconsistent readings. As a forefather of the quantity theory of money, Hume sees money as neutral. As an inflationist, Hume sees an active positive role for monetary policy. This paper reads Hume consistently instead, by showing that for Hume money is endogenous and demand driven. Hume would read the money equation as reverse causation and the co-presence of inflation and output growth as driven by demand. The 18th century knowledge of monetary theory (...) corroborates this reading. (shrink)