Neo-Mercantilism and The Wealth of Nations: British Commercial Policy after the American Revolution

Abstract

Few works of economic thought have such a close association with the intellectual and economic history of their period as Adam Smith's An inquiry into the nature and causes of the wealth of nations. Three recent careful assessments of the ‘influence’ of Smith's work, however, have found little direct evidence for its positive significance for economic policy in the 1780s and 1790s. Parliamentary debate seldom referred to the Wealth of nations, and then usually negatively unless by Smith's friends, or ‘radicals and Foxite whigs’. John Locke, David Hume, Charles Davenant, Sir Josiah Child, William Petty, Josiah Tucker and Arthur Young were all cited more frequently. A wide range of parliamentary leaders read Smith carefully, and several ministers knew him well and sought his advice, but with the exception of Shelburne they appear to have applied Smith's thought eclectically. Salim Rashid has noted that in 1776 there were already influential economic authorities, notably Arthur Young and Josiah Tucker, who advocated freer markets. Conversely, for over a decade after the publication of the Wealth of nations, articles on economic matters in the major periodical reviews made scanty reference to Smith's work, while the protectionist views of Sir James Steuart, whom Smith had ignored, were often authoritative. Smith's views became respectable among the political after negotiation of the Anglo-French commercial treaty of 1786, but it was this liberal economic policy which gave the wealth of nations currency, not the reverse.