ABSTRACT OF PAPER
Title: Jealousy of Trade in Hume and Smith
Author: Walraevens Benoît
The aim of this paper is to present Hume and Smith’s complementary analysis of the causes and consequences of what Hume called in an eponymous essay “jealousy of trade”, that is looking at other nations’ wealth with envy. While both thought, along with Montesquieu, that commerce “ought to be a bond of union and friendship” between men and nations, they desperately state that it has become “the most fertile source of discord and animosity”, especially among European trading nations. The jealousy of trade is the application of jealousy of state and of reason of state’s politics to trade. The spirit of conquest supersedes the cosmopolitan and peaceful spirit of commerce and foreign trade becomes the source of multiple conflicts and wars for securing or conquering markets (and the cause of increasing public debt threatening nation’s sovereignty). The passions of jealousy and envy lead nations to act against their own interest. Jealousy of trade finds its source into the ill-founded principles of political economy of what Smith labelled as mercantilism. In this partial and deceitful system of political economy, money is seen as the foundation of wealth and commerce as a zero sum game. That’s why mercantilist policies are based upon restrictions to free trade for preserving a positive balance of trade and for preventing money from fleeing abroad. Smith provides original arguments for explaining why it is so difficult to convince people, and especially legislators, of the mutual benefits of free foreign trade. On the one side, the “mercantile jealousy” is often based on the natural and noble sentiments of public spirit and patriotism which are easily turned into national prejudice, animosity and envy. On the other side, politicians and ambassadors are not incited to and often haven’t an interest in respecting their promises and agreements upon the liberalization of commerce. Indeed, there is no international system of justice sanctioning uncooperative behaviour. Moreover, representatives of different countries seldom meet each other. Therefore, their reputation will not be threatened by opportunistic behaviour. To finish with this point, merchants and manufacturers use their sophistry to and often succeed in persuading legislators that their private interest is in agreement with the general interest. Against the erroneous, detrimental and dangerous view of foreign trade advocated by mercantilism, Hume and Smith together argue that a wealthy and growing neighbour is a benefit rather than a threat to a nation’s prosperity. Insisting on the reciprocity of trade, Hume and Smith claim that jealousy and envy shall be turned into emulation, foreign trade becoming a source of peace and mutual benefits.
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