Introduction
The challenge which national consolidation posed to old frameworks, particularly in times of crisis, was not always welcome. Consolidation could interfere with alternative coping systems and cause conflicts of interest, a term which was developing new meanings in the eighteenth century. Economic writers were left to cope intellectually with an institutional shift from a paternal system of social relations to a capitalist one, as well as with a conceptual shift wherein ambition for private economic gain began to be admired over the older values of individual honour and virtue.1
Sometimes the course of economic thought in this period is presented as a smooth and unhindered transition into modernity. Historians of economics have tended to elevate certain authors from their context, placing them into an intellectual procession.2 Alternative strands of thought meanwhile, are disinherited. Therefore Jean-Claude Perrot suggests that though the efforts of J.J. Spengler and J.A. Schumpeter purport to be ‘history’ they only amount to a ‘genealogy of recent analyses’.3 Intellectual history is supposed to include context as well as lineage.
Some of the disinherited have been accommodated under the all-embracing title of mercantilism. However, part of the problem with the term, as we shall see, is that it can serve to merge economic thinkers
1 A.O. Hirschman, The Passions and the Interests (Princeton, 1977), p. 42; J.G.A. Pocock, Virtue, Commerce, and History (Cambridge, 1985), p. 69.
2 E. Rothschild, Economic Sentiments (Cambridge, MA and London, 2001), p. 41.
3 J.-C. Perrot, Une Histoire Intellectuelle de l’Économie Politique (Paris, 1992), p. 8.
Daisy Gibbs 173 into schools or priesthoods, in a way that they themselves would have considered sacrilegious.1 This chapter considers two such authors, Sir James Steuart (1713-1780) and Jacques Necker (1732-1804), and their ambivalence towards the idea of liberty in the grain trade and
otherwise.
Both ultimately rejected the idea of a free grain trade, arguing instead that national limitations be imposed. This chapter explores their thoughts about the role of the state in the nation, and their appraisal of the value of civic freedom in respect of the supposed security of
subjugation. It is especially concerned with their attempts to find a way to balance and even control the private interests of individuals, in order to establish and promote a national interest.
The first section takes on the idea of mercantilism directly, and aims to locate Steuart and Necker within the various interpretations of the term. It disputes the applicability of the concept, given the two authors’
strong views on systems of thought. Both Necker and Steuart
disapproved of and criticised the idea of excessively systematic thought in relation to their subject, political economy. This is important
because, as outsiders and foreigners in the countries in which they came to reside, they argued that every nation had to be treated as an individual case.
This led to policy suggestions with interesting implications for the idea of national belonging, which are explored in the second section. At the same time, this section begins to open up the idea of the nation and the definitions of the national good which Steuart and Necker offered. It examines the role of the statesman that they outlined in securing it. The final section further develops the character of this statesman, by
examining the depictions rendered by Steuart, Necker and a third author, Simon-Nicolas Henri Linguet (1736-1794), of the social changes
1 A.V. Judges, ‘The Idea of a Mercantile State’, in D.C. Coleman (ed.), Revisions in Mercantilism (London, 1969), p. 35.
Daisy Gibbs 174 which followed the decline of classical slavery and feudalism. Both Steuart and Necker exhibited some nostalgia for the old system of feudal jurisdiction, even while they warranted – and, in Necker’s case, participated in – the dismantling of old structures in favour of an integrated nation. This meant that they had to cope with the decline of old parochial systems of social relations and welfare. Their endeavours to amalgamate the dislocated poor into a centralised state led them to discuss ideas of liberty, citizenship and subjecthood.
The chapter concludes that the ideas of Steuart and Necker about state intervention in the grain trade were owing to the reciprocal bonds which they perceived in society. For Steuart, these bonds were basically economic, and to be found in the self-interest of luxury as well as
essential consumption. Meanwhile, for Necker, they were forged in the political relationship between king and subject. However, in both cases, the statesman was responsible for maintaining economic and hence political stability. For this reason, the nation had to have its limits, and so too did the autonomy of those who depended upon the state for their survival.
Though the two authors considered in this chapter certainly shared attitudes and some influences, particularly the likes of Cantillon and Montesquieu, and clearly were writing in opposition to some of the same contemporary trends in economic thought, they do not seem to have been profoundly influenced by one another. Though Steuart’s Inquiry into the Principles of Political Œconomy was originally published in 1767, its journey across the Channel was somewhat laboured, and the work was not properly ‘discovered’ in France until the Revolution.1 Of course, Necker may have perused its pages in English, as his friend and antagonist, Morellet, apparently did.2
1 M. Albertone, ‘Steuart’s Difficult Reception in France’ in R. Tortajada (ed.), The Economics of James Steuart (London, 1999), p. 4.
2 H.C. Clark, Compass of Society (London, 2007), p. 318.
Daisy Gibbs 175 By comparison, Necker’s Sur la Législation et le Commerce des Grains, was promptly translated into English in 1776 just a year after original publication.1 However, its appearance in English was accompanied the same year by Adam Smith’s Wealth of Nations, and by 1777, a
disaffected Steuart was turning from political economy.2 Perhaps the two authors knew of one another, but it was in keeping with their alleged convictions that they tried, ostensibly at least, to keep their work their own.
The Mercantile and other Systems in Economic Thought
According to Gustav Schmoller, who coined the new term, mercantilism means ‘state making – not state making in a narrow sense, but state making and national-economy making at the same time’.3 Tariffs and protectionist laws were merely the practical forms that the subjugation of economic issues to a political vision took. 4 The vision in question was that of the nation state. This required a recalibration of the economy, which would transform commercial activity from a local to a national enterprise. The vision was not without opposition from towns, districts, various estates, corporations, and others, and therefore mercantilism took the form of a conscious programme of state building.
The process therefore had to do with building national sentiment, recalibrating the meaning as well as the apparatus of the economy.
Schmoller emphasised the importance of the idea of a ‘national interest’, braced against foreign competition, in his system. ‘General postulates’, he suggested, functioned as ‘rallying points’ for public opinion, and served to furnish a sense of ‘collective interests’.5 Ultimately, he argued, ‘the feeling and recognition of economic
1 J. Necker, On the Legislation and the Commerce of Corn (London, 1776).
2 A. Skinner, ‘Introduction: Biographical’ in J. Steaurt, An Inquiry into the Principles of Political Œconomy, ed. A. Skinner (Edinburgh, 1998), I, p. lxii.
3 G. Schmoller, The Mercantile System and its Historical Significance (New York, 1896), p. 50.
4 Ibid, p. 51.
5 Ibid, p. 59.
Daisy Gibbs 176 solidarity, in regard alike to those within and those without, necessarily created at the same time a corporate egoism’.1 Part of the task of
Schmoller’s mercantilism, therefore, was creating an economic solidarity of interests on a national level.
However, since Schmoller, the term mercantilism has developed a negative reputation and new meanings. The idea of mercantilism as coherent and calculated procedure on the part of statesmen has now been all but entirely discredited. Joyce Oldham Appleby, Charles Wilson and Barry Supple all imply that what is now known as mercantilism was by no means systematic in its day, when actually it was a string of separate but conventional beliefs or reactions to a spate of individual but similar problems.2 Thus Supple wrote that ‘if these men had their faults then they are largely those of any group desperately involved in an economic crisis. The whole tenor of what has come to be known as mercantilist literature owes not a little to this involvement’.3 According to this train of thought, mercantilism is a fallacy and an anachronism:
the semblance of a coordinated system is only perceivable in hindsight, even if contemporary approaches were dictated by convention.
Mercantilism itself became little more than the economics of depression.4
To this day the term remains in use, only now it can be used to signify anything from a strict ideology; to a prominent Weltanschauung of the early modern period; to something which never really existed and is simply part of the historian’s ‘equipment’ for categorising and handling features of the past.5 It can even sometimes be used in periodization to denote an era of close international competition, especially in
1 Ibid, p. 77.
2 D.C. Coleman, ‘Mercantilism Revisited’, HJ, 23:4 (1980), pp. 773-4; J.O. Appleby, Economic Thought and Ideology in Seventeenth-Century England (Princeton, 1978), pp.
5-6; C. Wilson, England’s Apprenticeship, 1603-1763 (London, 1965), p. 57.
3 B.E. Supple, Commercial Crisis and Change in England (Cambridge, 1959), p. 221.
4 D. Vickers, Studies in the Theory of Money, 1690-1776 (Philadelphia, 1959), p 311.
5 A. Finkelstein, Harmony and the Balance (Michigan, 2000), p. 251; quote from Judges,
‘The Idea of a Mercantile State’, p. 55.
Daisy Gibbs 177 commerce and supported by government policies.1 Though the term has been exposed as ‘an incoherent frame of analysis’ it still lives on as a way of describing the intellectual milieu of the early period in the field that became economics.2 It is so vague, and yet versatile, that it
seemingly cannot be killed, at least not permanently.
The opportunity to revise the concept has led to an impulse on the part of some historians to rescue their pet early-modern economic writers from being counted among this elusive ‘priesthood’.3 For instance, several historians have sought to redefine the economics of Necker, who had formerly been accused of being a mercantilist. Already in 1847, in a reprint of Necker’s Sur la Législation et le Commerce de Grains, editors Gustave de Molinari and Eugène Daire typified the overall intellectual persuasion of the work as ‘nothing other than the mercantile system’, though they did qualify this charitably enough by adding ‘with some variations’. However, they pressed home the point that the ‘protection of manufactures was the obligatory corollary of the system’, which apparently made Necker a mercantilist.4
Later, Henri Grange reassigned Necker far more innocuously as a primitive socialist and intellectual predecessor of Marx, drawing on his apparent attention to class struggle and appreciation for the
predicament of the worker.5 Likewise Joseph Spengler opted to describe both Necker and the French writer, Linguet, as pre-Marxist, because of their attitudes to property. However, he ignored or avoided the other term, despite the fact that both of these French writers have been characterised as mercantilists in the Colbertian tradition.6
Meanwhile, Robert Harris came to the conclusion that Necker cannot be properly accommodated under the denomination of either mercantilist
1 D. Ormrod, The Rise of Commercial Empires (Cambridge, 2003), p. 6.
2 P.J. Stern and C. Wennerlind, ‘Introduction’ in idem (eds.), Mercantilism Reimagined (New York, 2014), p. 3.
3 Judges, ‘The Idea of a Mercantile State’, p. 35.
4 G. de. Molinari and E. Daire (eds.), Mélanges d’Économie Politique (Paris, 1847), p.
225, n. 1.
5 R.D. Harris, Necker: Reform Statesman of the Ancien Régime (London, 1979), p. 55.
6 J.J. Spengler, French Predecessors of Malthus (New York, 1965), p. 323.
Daisy Gibbs 178 or proto-socialist. Instead, he elected to consider Necker as a
pragmatist whose most important influence was the economics of the physiocrats, which he took such extensive pains to challenge.1
The practice of reclassifying the author persists even in more recent literature and in light of further revisions or rehabilitations of the term mercantilism. Thus Léonard Burnand basically justifies Necker’s interventionist stance on grain, arguing that it did not stem from a mercantilist emphasis on national power or grandeur, but from a humanitarian concern for assuring the basic needs of the French population.2 Many of the policies that Necker endorsed and
implemented might be characterised as mercantilist because of their protectionist slant. However, in Burnand’s analysis, Necker’s apparent humanitarian goals save the man himself from this supposed slur.
Certainly all of this has to do with dismantling a term which has in many ways become too vague as to serve a useful purpose. Such lumping can result in an oversimplification that deprives our sense of the past of the detail it deserves. This is why Nancy Koehn complains that the deep economic understanding demonstrated by another key subject of this chapter, James Steuart, and others, has been overlooked by historians too keen to ‘label all of Adam Smith’s predecessors as mercantilists’.3
As with Necker, Steuart’s work has undergone multiple reappraisals.
Initially typified as a mercantilist, Steuart was later re-categorised in the light of the Keynesian Revolution as something like a classical liberal.4 This rediscovery particularly after 1936 saw Steuart’s writings, which had formerly been described as ‘unfortunate’,5 taken seriously for perhaps the first time since Adam Smith somewhat cruelly chose to
1 Harris, Necker, p. 56.
2 L. Burnand, Les Pamphlets contre Necker (Paris, 2009), p. 28.
3 N.F. Koehn, The Power of Commerce (Ithaca, 1994), p. 73.
4 G.M. Anderson and R.D. Tollison, ‘Sir James Steuart as the Apotheosis of Mercantilism’, Southern Economic Journal, 51:2 (1984), p. 456.
5 J.K. Ingram, History of Political Economy (Edinburgh, 1888), p. 86.
Daisy Gibbs 179 ignore them entirely in Wealth of Nations.1 John Maynard Keynes stated outright that he wished to ‘do justice to schools of thought which the classicals have treated as imbecile for the last hundred years’.2 Still looking upon mercantilism as a school, Keynes restored the possibility of rationality in the works of the authors who fell under the title, and, in a way, added himself to their ranks as a long-lost heir to the tradition.
Unlike Necker therefore, Steuart remained typified as a mercantilist, only the system to which he belonged was no longer necessarily flawed.
Whether Steuart is diagnosed with it or not, evidently mercantilism had also therefore become synonymous with being wrong or backward in respect to economics, in just the way that Adam Smith originally envisioned this supposedly counterproductive system. Even Eli
Heckscher wrote of his subject that ‘there are no grounds whatsoever for supposing that the mercantilist writers constructed their system…
out of any knowledge of reality however derived’.3 Correction and replacement of misguided doctrine, it has been suggested, was in fact an important element of the genesis of systems and isms as rhetorical devises and of the etymology of ism especially.4 In this sense, the term has become more scandalous libel than analytical label.
The Keynesian revolution went some way amongst economists to take the sting out of the term. However, Ronald Meek has suggested that these sorts of reinterpretations tend to take place ‘ex post rather than ex ante’, and that the rehabilitation acts almost as a sort of justification or corroboration of a new theory post factum.5 His article exposes the possible flaw with such rehabilitations, in the sense that they are prone to take certain authors out of context and backdate progress in
economic thought, making the whole process seem a teleological
1 D. Winch, ‘Scottish Political Economy’ in M. Goldie and R. Wokler (eds.), The
Cambridge History of Eighteenth-Century Political Thought (Cambridge, 2006), p. 445.
2 J.M. Keynes to R.F. Harrod, 27th August 1935 in The Collected Writings, XIII: The General Theory and After. Part 1: Preparation, ed. D. Moggridge (London, 1973), p. 552.
3 E. Heckscher, Mercantilism (London, 1955), II, p. 347.
4 H.M. Hopfl, ‘Isms’, British Journal of Political Science, 13:1 (1983), p. 8.
5 R.L. Meek, ‘The Rehabilitation of Sir James Steuart’ in D. Mair (ed.), The Scottish Contribution to Modern Economic Thought (Aberdeen, 1990), p. 221.
Daisy Gibbs 180 procession towards enlightenment.1 Again, therefore, mercantilism was in danger of becoming a misrepresentative and even more
anachronistic term, without even having lost the vague and lumping quality which makes it a blunt and clumsy tool eternally to hand, but never that helpful.
Reinterpretations of the one author and school, meanwhile, may also have the knock-on effect of inspiring a reassessment of whatever came before or followed. At the same time as Steuart made his comeback, Smith’s work also underwent a reappraisal. This was suddenly portrayed as less than ground breaking, and it was Steuart who was now the real stick in the mud. For example, in Meek’s account, Smith’s theory merely ‘corresponded better with the zeitgeist of his time’. By comparison, Steuart’s mercantilist approach had ‘had its day’.2 Both Steuart and Smith therefore are portrayed here as belonging to and defining one of two consecutive movements or schools.
All of this is highly ironic, given the fact that the two mercantilists in question considered their own work relatively original and free of systematic thought. Necker, for example, was extremely critical of those whom he believed would approach the issue of political economy by espousing general rules. These ‘charlatans’, ignorant of the finer points of political economy, offered one or the other of ‘the two extremes, sustained prohibition & liberty [prohibition & liberté constantes]’.3 This was at best lazy administration, on the part of those who were unable or unwilling to intercede with the constant attention and intervention which the economy really needed.4 Necker used a medical analogy here, probably aimed at Quesnay, a physician by training, but which was echoed in remarkably similar terms by Adam Smith: if the economic
1 Ibid, p. 228.
2 Ibid, p. 223.
3 J. Necker, Sur la Législation et le Commerce des Grains (Paris, 1775), II, p. 83.
4 Ibid, pp. 81-3.
Daisy Gibbs 181 woes of the nation were a range of maladies attacking that body, then a simple cure-all was unlikely to help.1
Necker applied the term ‘system’ to both approaches for managing the grain trade, and pointed out that when each was implemented to the extreme, it failed. ‘Each party’, he wrote, ‘can easily gather anecdotes amenable to the system which they support, or at least contrary to the one they are attacking’.2 He used terms such as ‘liberty’ and
‘prohibition’ to describe systems of policy, but not for the ‘parties’ or factions who proposed them. This was not unusual. As far as David Todd could discover, the earliest use of the term protectionniste was by Frédéric Bastiat in reference to the British Anti-Corn Law League in 1845. He points out that, even by the nineteenth century, advocates of regulation still avoided the term ‘protectionist’.3 It remained, therefore, the system rather than its advocates that carried the label. In keeping with this convention, Necker used the idea of system in the Smithian manner, to describe a set of policies.
Therefore, Necker’s depiction of systems as almost tangible
frameworks of legislation differed slightly from that of Jean-François Melon, who had defined them as ‘the assembly of several propositions bound together, of which the consequences tend to establish a truth or opinion’.4 This interpretation bore greater resemblance to a doctrinal approach, rather than, as Necker had it, the results of doctrine or belief in the form of concrete policy. Yet at the same time, Necker actually attributed adherence to these systems to an undue faith in their basis in systemic assumptions of how the world functioned. In other words, to an excessive and perhaps uncritical reliance on ideas apparently
deduced from logic and not based on experience. Arnault Skornicki has even gone as far as to suggest that Necker considered his physiocrat
1 Cf. A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. R.H.
1 Cf. A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. R.H.