Wk. 6 David Hume, Of Commerce (1752)

Question 1

David Hume, Of Commerce (1752)

Answer 1

David Hume, Of Commerce (1752) – David Hume (1711-1776) was a Scottish philosopher, often classified as a leading figure in the Enlightenment. This text is his consideration of the effects of commerce on a nation. Pay particular attention to the way commerce relates to subjects that we might think of as noneconomic, such as politics and war.

How, according to Hume, did nations make progress or become more modern?

• According to Hume, Nations made progress by increasing commerce and trade.
• Hume Equated commerce and trade to “Greatness” and “Happiness” – “The greatness of a state, and the happiness of its subjects, (…) are commonly allowed to be inseparable with regard to commerce;”
  
  • “Thus the greatness of the sovereign and the happiness of the state are, in a great measure, united with regard to trade and manufactures.”
• Said that better commerce empowers the common man – “…and as private men receive greater security, in the possession of their trade and riches, from the power of the public, so the public becomes powerful in proportion to the opulence and extensive commerce of private men.”
• Breaks up commerce into two primary classes: husbandmen (farmers) and manufacturers. And that greater productivity in farming allows labor to move into manufacturing create a surplus of available labor. – “though the arts of agriculture employ at first the most numerous part of the society. Time and experience improve so much these arts, that the land may easily maintain a much greater number of men, than those who are immediately employed in its culture, or who furnish the more necessary manufactures to such as are so employed.”
• The stockpile of labor can be used in one of two ways, the first of which is to produce luxury. – “If these superfluous hands apply themselves to the finer arts, which are commonly denominated the arts of luxury, they add to the happiness of the state;”
• Hume seems to think that a better use for this stockpile of labor is working for the nation in military operations for the purpose of “Greatness of State” – “But may not another scheme be proposed for the employment of these superfluous hands? May not the sovereign lay claim to them, and employ them in fleets and armies, to encrease the dominions of the state abroad, and spread its fame over distant nations?”
• And so there is a give-and-take between greatness and happiness in a society. – “Here therefore seems to be a kind of opposition between the greatness of the state and the happiness of the subject. A state is never greater than when all its superfluous hands are employed in the service of the public.”
• A concern for failing to provide luxury and happiness is that it will take away an important motivation to work harder. – “They have no temptation, therefore, to encrease their skill and industry; since they cannot exchange that superfluity for any commodities, which may serve either to their pleasure or vanity.”
• The stockpile of labor in manufacturing is an asset to a nation because it can be quickly deployed to other uses of state (military) – “The more labour, therefore, is employed beyond mere necessaries, the more powerful is any state; since the persons engaged in that labour may easily be converted to the public service.”

What is the role of global trade in this account?

• Trade brings luxury. Luxury brings motivation to work harder and do better. And all this can come about through intelligent trading, exporting our surplus items that are made cheaply by us and importing needed items from other countries that are made cheaply by them (and otherwise expensive for us to make ourselves.) – “The temptation is stronger to make use of foreign commodities, which are ready for use, and which are entirely new to us, than to make improvements on any domestic commodity, which always advance by slow degrees, and never affect us by their novelty. The profit is also very great, in exporting what is superfluous at home, and what bears no price, to foreign nations, whose soil or climate is not favourable to that commodity.”

Additional Notes:

• He notes how the rising merchant class poses a challenge to the nobility and also stimulates competition, two powerful drivers of revolution and empowerment of the common (non-noble) people. – “merchants, who possess the secret of this importation and exportation, make great profits; and becoming rivals in wealth to the ancient nobility, tempt other adventurers to become their rivals in commerce”