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The Enlightenment

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Abstract

This chapter argues that the central tenets of economic liberalism were defined, almost in their entirety, by the end of the 1770s. It is divided into four sections. The first section considers the extraordinary contributions to economic theory of Richard Cantillon and the second considers those of A.R.J. Turgot. The third section compares David Hume’s concept of justice and property rights with John Locke’s. The fourth section discusses Adam Smith’s contributions to the concept of social evolution and especially the idea of the division of labour.

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Notes

  1. 1.

    B.R. Mitchell, British Historical Statistics (1988; Cambridge: Cambridge University Press, 2011), p. 8.

  2. 2.

    Phyllis Deane and W.A. Cole, British Economic Growth: 1688–1959 (Cambridge: Cambridge University Press, 1962), p. 127.

  3. 3.

    Mitchell, British Historical Statistics, p. 154.

  4. 4.

    Stephen Broadberry, Bruce M.S. Campbell, Alexander Klein, Mark Overton, and Bas van Leeuwen, British Economic Growth: 1270–1870 (Cambridge: Cambridge University Press, 2015), pp. 239–42, 164, 126, 139.

  5. 5.

    William Stanley Jevons, The Principles of Economics: A Fragment of a Treatise on the Industrial Mechanism of Society and other Papers (London: Macmillan, 1905), p. 165.

  6. 6.

    Adam Smith, The Wealth of Nations, ed. Edwin Cannan (1776; New York: Modern Library, 2000), 1.7, pp. 77–8.

  7. 7.

    Henry Higgs, ‘Richard Cantillon’, in Palgrave’s Dictionary of Political Economy, ed. Henry Higgs (London: Macmillan, 1926), p. 214.

  8. 8.

    F.A. Hayek, ‘Richard Cantillon’, in The Trend of Economic Thinking: Essays on Political Economists and Economic History, ed. W.W. Bartley III and Stephen Kresge (Indianapolis, IN: Liberty Fund, 1991), p. 267.

  9. 9.

    Joseph A. Schumpeter, History of Economic Analysis, ed. Elizabeth Boody Schumpeter (1954; New York and London: Routledge, 2006), pp. 214–15.

  10. 10.

    Murray N. Rothbard, An Austrian Perspective on the History of Economic Thought, 2 vols (1995; Auburn, AL: Ludwig von Mises Institute, 2006), vol 1, Economic Thought Before Adam Smith, p. 345.

  11. 11.

    Jörg Guido Hülsmann, ‘More on Cantillon as a Proto-Austrian’, Journal des Économistes et des Études Humaines, 11:4 (December 2001), p. 695.

  12. 12.

    Joseph J. Spengler, ‘Richard Cantillon: First of the Moderns’, The Journal of Political Economy, 62:4 (August 1954), p. 281.

  13. 13.

    Ludwig von Mises, Human Action: A Treatise on Economics (New Haven, CT: Yale University Press, 1949), p. 237.

  14. 14.

    Hayek, ‘Richard Cantillon’, p. 260.

  15. 15.

    Richard Cantillon, Essay on the Nature of Trade in General, ed. Antoin E. Murphy (1755; Indianapolis, IN: Liberty Fund, 2015), 2.2, pp. 56–7.

  16. 16.

    Ibid., 1.14, pp. 28–31.

  17. 17.

    Ibid., 1.1, p. 3.

  18. 18.

    See Mark Thornton, ‘Was Richard Cantillon a Mercantilist?’, Journal in the History of Economic Thought, 29:4 (December 2007), pp. 417–35; and Mark Thornton, ‘Cantillon, Hume and the Rise of Anti-Mercantilism’, History of Political Economy, 39:3 (September 2007), pp. 453–80.

  19. 19.

    Rothbard, Economic Thought Before Adam Smith, p. 409.

  20. 20.

    Cantillon, Essay on the Nature of Trade in General, 2.2, p. 57.

  21. 21.

    Ibid., 1.13, p. 26.

  22. 22.

    See Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Auburn, AL: Ludwig von Mises Institute, 2010), p. 96.

  23. 23.

    Cantillon, Essay on the Nature of Trade in General, 1.9, p. 13.

  24. 24.

    ‘Percentage of Employed Graduates in Non-graduate Roles, Parts of the UK, 2015 to 2017’, Office for National Statistics, 008381 (26 April 2018), available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/adhocs/008381percentageofemployedgraduatesinnongraduaterolespartsoftheuk2015to2017.

  25. 25.

    Hülsmann, ‘More on Cantillon as a Proto-Austrian’, p. 695.

  26. 26.

    Ludwig von Mises, Socialism: An Economic and Sociological Analysis, trans. J. Kahane (1922; New Haven, CT: Yale University Press, 1951), p. 292.

  27. 27.

    Murray N. Rothbard, ‘Freedom, Inequality, Primitivism, and the Division of Labour’, in Egalitarianism as a Revolt Against Human Nature and Other Essays (1974; Auburn, AL: Ludwig von Mises Institute, 2000), p. 250.

  28. 28.

    Mark Thornton, ‘Richard Cantillon and the Discovery of Opportunity Cost’, History of Political Economy, 39:1 (Spring 2007), pp. 97–119.

  29. 29.

    Cantillon, Essay on the Nature of Trade in General, 1.7, p. 10.

  30. 30.

    Hülsmann, ‘More on Cantillon as a Proto-Austrian’, p. 696.

  31. 31.

    James M. Buchanan, Cost and Choice (Chicago, IL: Markham, 1969). For Thirlby’s essays, see James M. Buchanan and G.F. Thirlby (eds), L.S.E. Essays on Cost (New York: Littlehampton Book Services, 1973).

  32. 32.

    Hayek, ‘Richard Cantillon’, p. 264.

  33. 33.

    Rothbard, Economic Thought Before Adam Smith, p. 355.

  34. 34.

    Murray N. Rothbard, ‘A Note on Burke’s Vindication of the Natural Society’, Journal of the History of Ideas, 19:1 (January 1958), p. 116.

  35. 35.

    ‘Mississippi Bubble’, Encyclopaedia Britannica (20 July 1998), available at: https://www.britannica.com/event/Mississippi-Bubble.

  36. 36.

    For an interesting and up-to-date recent doctoral dissertation on this which strongly challenges Friedman’s claim that there is no empirical evidence for the Cantillon effect, see Simon Bilo, Back to Cantillon: On the Relevance of the Monetary Economics of Richard Cantillon, PhD diss (Fairfax, VA: George Mason University, 2013).

  37. 37.

    Cantillon, Essay on the Nature of Trade in General, 2.9, p. 91.

  38. 38.

    See also Thornton, ‘Richard Cantillon and the Discovery of Opportunity Cost’, pp. 8–9.

  39. 39.

    Leonard P. Liggio, ‘Turgot and Enlightened Progress’, Literature of Liberty, 2:1 (January-March 1979), p. 3.

  40. 40.

    Peter Groenewegen, Eighteenth Century Economics: Turgot, Beccaria and Smith and their Contemporaries (New York and London: Routledge, 2002), p. 363. It has been suggested that Smith plagiarised Turgot, but I am not at all interested in speculating on this question.

  41. 41.

    See Anne-Robert-Jacques Turgot, ‘To David Hume’, in The Turgot Collection, ed. David Gordon (Alabama, AL: Ludwig von Mises Institute, 2011), pp. 483–92.

  42. 42.

    Turgot, ‘Fairs and Markets’, in The Turgot Collection, pp. 91, 96; on interests rates, see ‘Observations on a Paper by Saint-Péravy’, pp. 131–46; on protectionist trade policy, see ‘Observations on the Paper by Graslin in Favour of Indirect Tax, to which the Royal Agricultural Society of Limoges has Given an Honourable Mention’, pp. 149–60.

  43. 43.

    Groenewegen, Eighteenth Century Economics, p. 282.

  44. 44.

    Rothbard, Economic Thought Before Adam Smith, p. 393.

  45. 45.

    Schumpeter, History of Economic Analysis, p. 315.

  46. 46.

    Turgot, ‘Reflections on the Formation and Distribution of Wealth’, in The Turgot Collection, pp. 5, 10.

  47. 47.

    Turgot, ‘Value and Money’, in The Turgot Collection, p. 169.

  48. 48.

    Ibid., p. 169.

  49. 49.

    Ibid., p. 169.

  50. 50.

    Ibid., p. 169.

  51. 51.

    Rothbard, Economic Thought Before Adam Smith, p. 390.

  52. 52.

    Turgot, ‘Value and Money’, p. 175.

  53. 53.

    Etienne Bonnot, Abbé de Condillac, Commerce and Government: Considered in their Mutual Relationship, trans. Shelagh Eltis (1776; Indianapolis, IN: Liberty Fund, 1997), p. 121.

  54. 54.

    Groenewegen, Eighteenth Century Economics, p. 289.

  55. 55.

    Turgot, ‘Value and Money’, p. 175.

  56. 56.

    Ibid., p. 175.

  57. 57.

    Groenewegen, Eighteenth Century Economics, p. 289.

  58. 58.

    Turgot, ‘Paper on Lending at Interest’, in The Turgot Collection, pp. 215–16.

  59. 59.

    Jeremy Bentham, Defence of Usury, 3rd edn (1787; London: Payne and Foss, 1818), pp. 6–15.

  60. 60.

    Eugen Böhm-Bawerk, Capital and Interest, trans. George D. Hunke and Hans F. Sennholz, 3 vols (1884; South Holland, IL: Libertarian Press, 1959), vol 2: The Positive Theory of Capital, p. 82.

  61. 61.

    Groenewegen, Eighteenth Century Economics, p. 303.

  62. 62.

    Turgot, ‘Reflections on the Formation and Distribution of Wealth’, p. 36.

  63. 63.

    Ibid., p. 36.

  64. 64.

    Groenewegen, Eighteenth Century Economics, p. 307.

  65. 65.

    Israel M. Kirzner, ‘Ludwig von Mises and the Theory of Capital and Interest’, in The Economics of Ludwig von Mises: Toward a Critical Reappraisal, ed. Laurence S. Moss (Kansas City, MO: Sheed and Ward, 1976), p. 63.

  66. 66.

    See also Hans-Hermann Hoppe, Economic Science and the Austrian Method (Alabama, AL: Ludwig von Mises Institute, 1995), pp. 14–15.

  67. 67.

    In navigating the potentially daunting field of Hume studies, as ever I have found it useful to consult John Dunn and Ian Harris (eds), Hume: Great Political Thinkers 10, 2 vols (Cheltenham: Edward Elgar Publishing, 1997).

  68. 68.

    David Hume, An Enquiry Concerning the Principles of Morals, ed. J.B. Schneewind (1751; Indianapolis, IN: Hackett Publishing, 1983), 3.1, pp. 20–6.

  69. 69.

    Ibid., 3.2., pp. 27–8.

  70. 70.

    F.A. Hayek, ‘Richard Cantillon’, p. 287.

  71. 71.

    Richard Cantillon, Essay on the Nature of Trade in General, trans. Antoin E. Murphy (1755; Indianapolis, IN: Liberty Fund, 2015), p. 4.

  72. 72.

    Ibid., p. 4.

  73. 73.

    Turgot, ‘Reflections on the Formation and Distribution of Wealth’, p. 6.

  74. 74.

    Hume, An Enquiry Concerning the Principles of Morals, 3.2, p. 28.

  75. 75.

    For a recent account on the persistence of the altogether stupid idea of ‘perfect equality’ in the face of both reason and overwhelming evidence, see Kristian Niemietz, Socialism: The Failed Idea That Never Dies (London: The Institute of Economic Affairs, 2019). I am not the first author to point out that Hume predicted the terrors of twentieth-century communist regimes; see also Richard Pipes, Property and Freedom (New York: Vintage Books, 1999), pp. 216–17.

  76. 76.

    Hülsmann, ‘More on Cantillon as a Proto-Austrian’, p. 695.

  77. 77.

    Robin Dunbar, ‘Neocortex Size as a Constraint on Group Size in Primates’, Journal of Human Evolution, 22:6 (June 1992), pp. 469–93.

  78. 78.

    David Hume, A Treatise of Human Nature, ed. L.A. Selby-Bigge, 2nd edn (1739; Oxford: Oxford University Press, 1978), 3.2.2, p. 495.

  79. 79.

    Christopher J. Berry, David Hume (New York and London: Continuum, 2009), p. 41.

  80. 80.

    Hume, A Treatise of Human Nature, 3.2.8, p. 541.

  81. 81.

    For a discussion of the possibility of the government ‘crowding out’ the proper enforcement of these right, see Anthony de Jasay, ‘Adaptive Selection: Property and Contract’, in Political Philosophy, Clearly: Essays on Freedom and Fairness, Property and Equalities, ed. Hartmut Kliemt (Indianapolis, IN: Liberty Fund, 2010), pp. 40–1.

  82. 82.

    Hume, An Enquiry Concerning the Principles of Morals, 3.2, p. 32.

  83. 83.

    John Day, ‘Hume on Justice and Allegiance’, Philosophy, 40:151 (January 1965), p. 37.

  84. 84.

    David Miller, ‘Hume and Possessive Individualism’, History of Political Thought, 1:2 (June 1980), p. 268.

  85. 85.

    Norman Kemp Smith, The Philosophy of David Hume (1941; New York and Basingstoke: Palgrave Macmillan, 2005), pp. 148–9.

  86. 86.

    Hume, An Enquiry Concerning the Principles of Morals, Appendix III, p. 96.

  87. 87.

    Ibid., p. 96n.

  88. 88.

    Ibid., 3.2, p. 33.

  89. 89.

    de Jasay, ‘Adaptive Selection: Property and Contract’, p. 40.

  90. 90.

    David Hume, ‘Of the Populousness of Ancient Nations’, in Essays: Moral, Political, and Literary, ed. Eugene F. Miller (1777; Indianapolis, IN: Liberty Fund, 1994), pp. 383–4.

  91. 91.

    Jonathan Haidt, The Righteous Mind: Why Good People Are Divided by Religion and Politics (New York: Random House, 2012), pp. 197–205.

  92. 92.

    Turgot, ‘Reflections on the Formation and Distribution of Wealth’, p. 15.

  93. 93.

    Gerard Casey, Freedom’s Progress: A History of Political Thought (Exeter: Imprint Academic, 2017), p. 522.

  94. 94.

    Daniel B. Klein and Erik W. Matson, ‘Mere-Liberty in David Hume’, GMU Working Paper in Economics, 18: 14 (June 2018), p. 7.

  95. 95.

    Hayek, ‘The Legal and Political Philosophy of David Hume’, in The Trend of Economic Thinking, p. 117.

  96. 96.

    Condillac, Commerce and Government, pp. 138–40.

  97. 97.

    Matt Ridley, The Evolution of Everything: How New Ideas Emerge (New York: Harper Collins, 2015), pp. 1–5, 21–36.

  98. 98.

    Adam Smith, Lectures on Jurisprudence, ed. R.L. Meek, D.D. Raphael, and Peter Stein (1763; Oxford: Oxford University Press, 1978), p. 14.

  99. 99.

    Yuval Noah Harari, Sapiens: A Brief History of Humankind (London: Vintage Books, 2011), pp. 22–44.

  100. 100.

    Hans-Hermann Hoppe, ‘The Origins of Private Property and the Family’, in The Great Fiction: Property, Economy, Society, and the Politics of Decline (Baltimore, MD: Laissez Faire Books, 2012), pp. 27–30.

  101. 101.

    Ibid., pp. 30–1.

  102. 102.

    Ibid., pp. 32–3.

  103. 103.

    ‘Crime in England and Wales: Year Ending December 2018’, Office for National Statistics (December 2018), available at: https://www.ons.gov.uk/file?uri=/peoplepopulationandcommunity/crimeandjustice/datasets/policeforceareadatatables/yearendingdecember2018/policeforceareatablesyearendingdecember2018.xlsx.

  104. 104.

    Edmund Burke, Reflections on the Revolution in France and on the Proceedings in Certain Societies in London Relative to that Event, ed. Connor Cruise O’Brien (1790; London: Penguin, 1968), p. 195.

  105. 105.

    Francis Fukuyama, The Origins of Political Order: From Prehuman Times to the French Revolution (London: Profile Books, 2011), p. 66.

  106. 106.

    Burke, Reflections on the Revolution in France, pp. 140, 117.

  107. 107.

    Smith, The Wealth of Nations, 1.3, p. 19.

  108. 108.

    See Mises, Socialism, and F.A. Hayek, ‘The Use of Knowledge in Society’ (1945), in Individualism and Economic Order (1948; Chicago, IL: University of Chicago Press, 1982), pp. 77–91.

  109. 109.

    George Stigler, ‘The Division of Labour is Limited by the Extent of the Market’, The Journal of Political Economy, 59:3 (June 1951), pp. 185, 192.

  110. 110.

    Francis Fukuyama, The Origins of Political Order, p. 67.

  111. 111.

    Data from https://tradingeconomics.com/.

  112. 112.

    Craig Smith, The Philosophy of Adam Smith: The Invisible Hand and Spontaneous Order (New York and London: Routledge, 2006), p. 68.

  113. 113.

    Jared Diamond, Guns, Germs and Steel: A Short History of Everybody for the Last 13,000 Years (London: Vintage, 1997).

  114. 114.

    Francis Fukuyama, The Origins of Political Order, p. 85.

  115. 115.

    Hans-Hermann Hoppe, ‘From the Malthusian Trap to the Industrial Revolution: An Explanation of Social Evolution’, pp. 63–83.

  116. 116.

    Adam Ferguson, An Essay on the History of Civil Society (New Brunswick: Transaction Publishers, 1991), p. 8.

  117. 117.

    Adam Smith, Lectures on Jurisprudence, p. 398.

  118. 118.

    George H. Smith, The System of Liberty: Themes in the History of Classical Liberalism (Cambridge: Cambridge University Press, 2013), p. 150.

  119. 119.

    Jesse Norman, Adam Smith: What He Thought and Why It Matters (London: Penguin, 2018), p. 69.

  120. 120.

    See E.O. Wilson, On Human Nature, rev. ed (1978; Cambridge, MA: Harvard University Press, 2004).

  121. 121.

    Jonathan Haidt, The Righteous Mind: Why Good People Are Divided by Religion and Politics (New York: Random House, 2012), p. 369.

  122. 122.

    Smith, The Wealth of Nations, 1.1, p. 12.

  123. 123.

    Leonard E. Read, I, Pencil (1958; Atlanta, GA: Foundation for Economic Education, 2015).

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    Neema Parvini

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Parvini, N. (2020). The Enlightenment. In: The Defenders of Liberty. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-39452-3_4

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