The Classical Dynamics of Hume, Smith, Ricardo and Malthus
Chapter 2: Trading in Innovation: Hume and the Case for Freer Trade
I Economics and the Science of Man David Hume (1711-1776) occupies a curious place in economic literature. His most distinctive contribution must surely be the significance he attributed to commercial forces within the interaction of economics, politics, and social values over time. Yet within economics he is best, often only, known for his monetary economics, most especially for his analysis of the balance of trade. While this dichotomy has long been lamented among Hume specialists, it has proved resilient. This chapter attempts to breach the barrier between these discussions by reexamining Hume’s case for freer trade. I hope to show that Hume’s case for freer trade was ultimately based on his analysis of technical change, more particularly the interaction between international trade and technical change. This analysis derives directly from his distinctive research strategy: the science of man. Additionally, I hope to show that this analysis is of considerably greater potential relevance for the present corpus of international economic theory than his price-specie-flow mechanism (PSF). It follows that specific elements and characteristics of his science of man must be placed at the center of any attempt to evaluate either his relevance for present international economic theory, or his distinctive position within the long-standing debate on the rela.tive advantages and disadvantages of greater economic openness. It seems unlikely that the most relevant elements of Hurne’s contribution to the argument for more liberal trade telations will be fully appreciated unless we dispel the presently acclepted notion that his monetary economics was his...
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