David Hume's essays were “the cradle of economics” suggested John Hill Burton, in the first important biography of Hume. Although this may be a biographer's exaggeration, there can be no doubt that Hume's work provides an important contribution to economics as a discipline together with a significant critique of the types of policy recommendations which are associated with the mercantilist position.

ECONOMICS: THE BACKGROUND

Mercantilism is difficult to define. It has been aptly described as "a shifting combination of tendencies which, although directed to a common aim - the increase of national power - seldom possessed a unified system of policy, or even a harmonious set of doctrines. It was a very complicated web of which the threads mingled inextricably." Hume, unlike Adam Smith, made no attempt to treat mercantilism as a system, but he did identify a number of "threads" in the literature.

First, Hume drew attention to the position that foreign trade is more important than domestic, a point of view which is admirably summarised by the title of Thomas Munn's England's Treasure by Forraign Trade. Or, The Ballance of our Forraign Trade is the Rule of our Treasure (1630). Second, he identified the associated concern with the determinants of the rate of interest when he examined the view that interest was determined by the quantity of money. Third, he considered the claim that industry "would not emerge spontaneously, it would have to be induced by legislation, " a point which is neatly caught in William Petyt's Britannia Languens (1680).