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Hume, Money, and Civilization; or, Why Was Hume a Metalist?C. George Caffentzis

Hume Studies Volume XXVII, Number 2 (November, 2001) 301-336.

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HUME TUDIESVolume 27, Number 2, November 2001, pp. 301-335

H urne, M oney, and Civilization; or,Why W as Hu rne a M etal list?

C . GEORGE CAFFENTZIS

Meanwhile, my good lad, here is a trifle for you to drinkVich Ia Vohr’s health.” The hawk’s eye of Callum flashed

delight upo n a golden guinea with which these last wordswere accompanied He hastened, not without a curse on theintricacies of a Saxon breeches pocket, or spleuchan, as he

called it, to deposit the treasure in his fo b . I

Functionalism versus Metallism?

Hume’s Political Discourses (1752) was his first immedia te comm ercial pub-lish ing success-three ed itions were pri nted in two years-for it spoke directly

to a vital concern of his ce ntral aud ience , th e lawyers, lairds, academics, an dmer cha nts of t h e Scottish Lowlands an d Borderlands: money. Hume’s book

was one of t h e most sophisticated an d elegant analyses of t h e functioning of

mon ey available un til th en. Indee d, a numb er of his sketches of monetary

behavior, especially his hydraulic approach to the flows of money on t h e

international market , have been shaped in to paradigmatic textbook ex-amples of economic reasoning since the n.2

But mode rn textbooks d o no t assume, as Hume is widely thoug ht to have

assumed, tha t mon ey was metallic, i.e., gold an d silver. This metallic assump-tion can be plainly seen in m an y passages of t he Political Discourses. F o rexample, in “Of Money” a n d “Of Interest” h e writes as if this assum ption

C . George Caffentzis is Associate Professor of Philosophy, University of Southern Maine,Portland, ME 04104, USA.e-mail: [email protected]



3 0 2 C . George Caffentzis

were so obvious to t he reader t ha t there is n o reason to make it explicit. Moneyand specie are elided in t hese chapters without m uch fuss:

It appears, that th e want of m oney can never injure any state withinitself: For m en and comm odities are the real stre ngth of any com mu-nity. It is th e simple of manner of living wh ich here hurts t he publicby confining the gold and silver to few hands, and preventing its

universal diffusion and circulat ion. R 45)3

And these commodities [the merchant] will sometimes preserve inkind, or more com monly convert i nt o money, which is their com-

mon representation. If gold and silver have increased in the statetogethe r with the industry, it will require a great quant ity of thesemetals t o represent a great quan tit y of commodities a nd labour. Ifindustry alone has encreased, th e prices of everything must sink, an da small quanti ty of specie will serve as a representa tion . R 52)

There are times when h e contras ts metallic m oney wit h its alterna tives

in the Political Discourses, but always in a derogatory way. In “Of Money” he

purposely contrasts th e int erna tional acceptance of gold and silver with th edoubts he entertains about “paper-credit”:

That provisions and labour should become dear by the encrease oftrade a nd money, is in many respects, an inconvenience; but an incon-venience that is unavoidable, and t he effect of t ha t public wealthan d prosperity wh ich are th e e nd of all our wishes. I t is compensatedby the advantages, which we reap from th e possession of these pre-

cious metals, and th e weight, which they give the nat ion in all foreignwars and negociations. But there appears n o reason for encreasingthat inconven ience by a counterfeit money, whic h foreigners willno t accept of in any payment , an d which a ny great disorder in the

sta te will reduce to nothing. R 35)

In “Of Public Credit” h e disparagingly con tras ts public securities with goldand silver (even th ough he categorizes paper-credit as a “species of m oney”):

Public Stocks, being a kind of paper-credit, have all t he disadvan-tages at tendi ng tha t species of money. They banish gold an d silverfrom t he most considerable commerce of t he state, reduce them tocommon circulation, an d by th at means render all provisions a nd

labour dearer t ha n otherwise they would be. R 95)

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Hum e, Money,and ivilization 3 0 3

In “Of the Balance of Trade” he argues that paper money is not “real cash”and drives the level of silver and gold circulating i n a country below its “na tu-ral level” R 68).

Due to passages like these, historians of political economy and econom-ics from Marx, t o Schumpeter, to Vickers, to Laidler have read Hume as a“metallist.” For example, Vickers includes Hume’s name in something of a

roll call of metallists: “Child, Petty, Locke, Cant il lon, Hume and Harris wereprominent metallists.” Of course, we must be clear about what “metallism”means as a typological term.4 To do this let us tu rn to Schumpeter’s defini-tions of two kinds of metallism, theoretical and practical:

By theoretical metallism we denote the theory tha t it is logically es-sential for money to consist of, or to be ‘covered’by, some commodityso tha t the logical source of the exchange value or purchasing powerof money is the exchange value or purchasing power of tha t com-modity, considered independent ly of its monetary role.

By practical metallism we shall denote sponsorship of a principle ofmonetary policy, namely, th at th e mon etary uni t ‘should’ be keptfirmly linked to, and freely interchangeable with, a given quantityof some co m m ~ d i t y .~

These are, of course, two quite different kinds of comm itment . The formerclaims a logical or “analytic” connection between money and some com-modity, while th e latter calls for principled (moral and/or political) relationto hold between money and a particular commodity (which, in t he nature ofthings, might only accidentally be realized precisely).

Schumpeter includes Hume in his list of theoretical metallists, whichbegins with Aristotle and ends with Marx. In particular, he argues that Hume’sview of money’s metallic essence was typical of th e average monetary view ofth e period. He claims that Hume’s view “differs from [Sir Josiah] Child’s onlyin explicitness an d polish,” while Child, a mercantilist theorist and spokes-man of t he English clo th industry in t he late seventeenth century, “clearlyidentified money with those parts of t he stocks of gold and silver that fill themoneta ry function an d held th at in spite of this function gold and silver,

coined or uncoined, still remained commodities exactly like ‘wine, oil, tobacco,cloth and stuff.”’6 Indeed, in his short discussion of Hume’s central monetarytext, the 1752PoliticalDiscourses,Schumpeter dismisses any possibility of “nov-elty” in Hume’s work, al though he recognizes its “force and felicity.”

Given the weight of the passages from Hume and the commentary litera-ture, can there be any reasons to be skeptical about Schumpeter’s categorization

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304 C. George Caf fen tzis

of Hume as a theoretical metallist? In this paper I argue that such doubts areindeed justified. Hume was never a theoretical metallist. However, there is nosingle category th at easily subsumes his moneta ry ontology, for his views onmoney were philosophically complex an d sensitive t o economic develop-ments, especially those transpiring in Scotland. In order t o best locate Hume’sview of money, one must situate Hume’s monetary theory more deeply in thepolitical project t ha t he was embarked on i n the Political Discourses and in thephilosophy of money he created to accomplish his aims. In so doing, I con-clude that Hume was, paradoxically, a practical, not a theoretical, metallistin spite ofand because of the developments in Scottish society after t he 1745Jacobite rebellion.

The first source of doubt to as Hume’s theoretical metallism is rooted in

his attitude toward th e eminent philosophers of money who immediatelypreceded him and wi th whose works he was qui te familiar, Locke’s contribu-tions to t he “recoinage debates” of 1696 an d Berkeley’s The Querist (1735-7).Locke was a paradigmatic theoretical metallist who argued that , even if thefull-weight recoinage of England’s money supply did generate a deflation, i twas worth it in order t o keep the whole monetary system from collapsing dueto the increasing gap between the coinage’s face value an d its actual clipped

value. In brief, he argued tha t the idea of money was a compound of an idea ofa mixed mode an d th e idea of a corporeal substance. For Locke mixed modesa r e “Combina t ions of simple Ideas, as are not looked upon to becharacteristical Marks of any real Beings that have a steady existence, butscattered and independent Ideas, put together by the Mind, are distinguishedfrom the complex Ideas of Substances,” while corporeal substances are “Com-bina tions of simple Ideas, as are by Experience a nd Observation of Men’sSenses taken notice of t o exist together, and are therefore supposed to flow

from the particular inte rna l Cons titu tion , or unkn ow n Essence of t ha t Sub-stance.’”The mixed mode aspect of m oney arose from its social and culturaluse, while its material substance aspect allowed for its transcultural univer-sal exchangeability. The gold an d/or silver substances ( and the ir primaryqualities) const itut ing money gave it an objective status, a “standard madeby natu re,” that could elicit agreement across languages and cultures.

Berkeley’s not io n of m oney was premised on his rejection of Locke’s no-tion of material substance. From a Locke’s perspective, Berkeley’s espousal of

a paper money system for Ireland was an attempt t o identify money as a mixedmode alone; hence it was doomed to catastrophe. But Berkeley’s critique ofmaterial substance implied that any not ion of money rooted in it , like Locke’s,would be a will-o’-the-wisp. For Berkeley, as I have argued elsewhere, “m oneywas a mixed-mode no tio n stripped of any essential dependence on material

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Hume, Money, and Civilization 3 0 5

corpuscular substances. Its purpose was to stimulate and regulate act ion, notto measure and store a quantity of specie.”8Money, by being a ticket, a counter,a token, a tally, or a mark-all metaphors th at Berkeley used to describe itsfunction-escaped th e impossible Lockean expectat ion of being beyond allinterpretation and subjectivity, for the primary func tion of money was to“excite th e indust ry of mankind.”

These dichotomies matched t he ontologies and concepts of money thatstructured th e field Hume entered i n writing th e Political Discourses. Hume’s

acceptance of Berkeley’s critique of Locke’s doctrines of substance, abstrac-

t ion, pr imary qual i t ies , should have brought Hume to quest ion thephilosophical justification of Locke’s metallism: v iz . , that specie providesmoney with an objective naturalized substratum that makes internationaltrade possible. What, th en , would have brought Hume to embrace metallism?Given the binary structure of the philosophical/monetary field at the time,Hume’s anti-substantialism seems t o be an in cohere nt founda tion for ametallist ontology of money, which presumes th e existence of intrinsic val-ues and objective properties. This tension prompts one to ask: was Humecoherent th roughout th e range of his work? Was his philosophy compatiblewith his political economy as it intersected the monetary field? Could heconsistently be a Berkeleyian-influenced skeptic concerning substance and

an adhere nt of Locke’s metall ism? To answer these questions adequately, onemust study his monetary texts in conjunc tion with his philosophical ones.

Hume’s philosophical writings certainly abound with kernels of pureanti-substantialism. From his radically anti-Cartesian account of the self ormind as ”n othing but a heap or collection of different perceptions unitedtogether by certain relations and supposed, though falsely, to be endowedwi th a perfect simplicity or identi ty” to his crit ique of t he “fiction” of sub-stance as th e result of the tende ncy t o fallaciously homogenize smalldifferences in to identities, Hume qui te self-consciously made the metaphysi-

cians of substance something of t he knights errant of philosophy (T 207, 220 .9

Thus he writes of the proponents of substance:

they seem to be i n a very lamentable condition, and such as the poetshave given us but a faint no tion i n their descriptions of the pun ish-

me nt s of Sisyphus an d Tantalus. For what can be imagined moretorm ent ing, t ha n t o seek with eagerness, wha t for ever flies us; andseek for it i n a place, where ’tis impossible i t can ever exist? (T 223)

This anti-substantialism has been one of most attractive features ofHume’s thought t o those schools of philosophy th at rage against schools.




Hume, Money, and C ivilization 3 0 7

to im ita te th e example of King William’s reign, when the clipt money wasraised to th e old st andard” (an entr y in t he Errata of the original PoliticalDiscourses) R 39). Hume claims tha t th e best form of recoinage would have a“penny’s worth of silver taken from every shilling, t he new shilling would prob-ably purchase everything tha t could have been bought by the old; the prices of

everything would thereby be insensibly diminished. . In executing such aproject, it would be better to make the new shilling pass for 24 halfpence, inorder topreserve the illusion, and make it be taken for the same” R 39, italics mine) .

It is import ant for our purposes t o not e tha t Hume’s suggested monetarymanipu lat ion essentially uses the hu ma n mind’s “t endenc y to fallaciouslyhomogenize small differences in to identities” tha t brings about the “fictions”

of substance, according t o Hume’s acc ount , to create a beneficent “gradualand universal encrease in t he deno minati on of money.” Thus, in this case,Hume’s philosophical anti-substantialism directly supports his criticism ofstrict metallism, c i la Locke.

Marx also foun d Hume’s metallism problematic a nd insisted o n point-ing to a cont rad ict ion in his monetary views, since “[Hume] makes gold andsilver enter the world of commodities as noncommodities; but as soon asthey appear in th e form of coin, he turns them , on th e contrary, into merecommodities, whi ch m ust be exchanged for other commodities by simple

barter.”13 Hume does not dis tinguis h, as a theoretical metallist should inMarx’s view, how th e qua nti ty of money increases and therefore he confuses a“sudden and forcible transfer of hoarded money from one country to another ,”an undervalued recoinage of t he sort described above, an issuing of token

money or paper-credit notes, a nd the importat ion of gold and silver whosecost of production has lowered. As a consequence, Marx argued th at for Hume“gold an d silver are thus thing s without value, but in t he process of circula-tion, in which th ey represent commodities, they acquire a fictitious value.”’“

Marx is right here; thi s is hardly th e doctrine of a theoretical metallist, but isit a symptom of Hume’s general suspicion of “int rins ic value” of anythin g,gold and silver inc luded?

These inconsistencies discussed by Vickers an d Marx are rooted in a morebasic tension in his philosophy of mo ney th at puts his ultim ate theoreticalmetallism in questi on. But d eterm ining whether Hume was a metallist at a l land, if he was, what kind of metallist he was, requires more th an an examina-ti on of his philosophical texts . A careful study of the historical context of thefirst edition of the Political Discourses (1752) an d the transformation of Hume’sviews on mo ney in his writings after 1752 is also needed in order to under-stand th e source of Hume’s ambivalences an d complexities.




3 0 8 C George Caf fentz is

The Scottish Setting of the Paradox

In order to examine and resolve thi s tension in Hume’s philosophy of money,it is crucial to consider t he role money played in th e political project Hume

conf ronted during the writing a nd publication of t he Political Discour ses.Thebook was published in 1752, but we know that it was conceived in t he lat e1740s , since a precis of its main th eme s can be found in Hume’s letter to

Montesquieu of 10 April 1749.15

What was the decisive political/social project occupying the minds ofHume and the other “Enlightened” Scots of his day that could have been the

source of Hume’s polit ical-economic concern?16 This project was complex and

Janus-faced. One side of t he project was long-term an d faced sou th to London

and through London to the world market. After the disastrous collapse i n1700 of the Darien Company, th e Scottish ruli ng elite’s mai n att emp t at de-veloping its own colony in Panama, their o nly reasonable pa th to takingpart in th e world market was thro ugh Lo ndon, and th e majority of the m

reluctan tly acceded to t his bitt er wisdom by accepting the offer of Union in1707.l’ Immediately after t he Union, t he circle of improving lairds, lawyerstrained on the conti nent, a nd Atlantic merchants located in the corridorbetween Edinburgh and Glasgow exerted an impressive political, juridical,

and intellectual impact on London and th e Empire more tha n commensu-rate to their financial and merchant capital.18 The intell ectual achievem entsof this elite were recognized in t he eighteenth cen tury and even today theScottish Enlightenmen t is given a place of honor next t o the French with th eEnglish trai ling behi nd. The juridical impact , especially through th e work ofWilliam Murray, Lord Mansfield, a Lowland Scot, literally revolutionizedBritish commercial law an d nearly t hrea tened to do th e same for its criminallaw by injecting the principles of Scottish civil law into English commonlaw. The Scots also literally “invaded” th e British army, its diplomatic ser-vice, and penetrated in to t he highest levels of th e executive.20

Hume was a ready recruit in th is “invasion,” for he served as a clerk in aBristol merchant ’s firm, a n aide-de-camp in th e British army, and i n a n um -

ber of posts in the diplomatic corps in Turin, Vienna, an d, of course, Paris.But his most importa nt th rust was intellectua l. The project he took u p afterthe publication of Political Discourses was The History of England, which be-

came the authorit ative account for th e English of their own history for almosta century. Ce rtainly Hume’s prescriptions in 1752 (especially in “Of the Bal-ance of Trade,” “Of Taxes,” and “Of Public Cre dit” ) were directed against t helong-established mercantilist policies em ana tin g from London th at ham -pered Scottish trade and indus try for nearly a cen tury .

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Hume, Money, and Civilization 309

But ther e was ano ther face to th e political project of Hume’s circle, onewhich looked nor th t o the Scottish Highlands. That aspect of the project wasimperative at th e time, but it has been neglected by most of Hume’s commen-tators.21 The ’Forty-Fiver and its after math clearly cons titute d the most

decisive moments of Scottish history overlapping the writing of the 1752PoZiticaZ Discourses. In 1745, thousands of armed Scottish Highlanders andothers, bent on overthrowing the English crown an d put ting Bonny PrinceCharlie’s father on the th ron e, marched in to th e Lowlands, taking Edinburgh

and all the major Scottish towns. Then th ey penetrated deep into England.The invasion lost mom en tum at Derby, within on e hundred miles of Lon-do n, an d the Highlanders retreated back into Scotland th at winter. This forcedefeated or outmaneuvered the official troops sent against t he m unt il, f i -

nally, th ey were confronted and decisively destroyed by t he British Army atCul loden, in Scotland, in April 1746.22

The official “cause” of this remarkable political-military knife thru st intothe heart of the most powerful state on the planet was Jacobitism, i.e., thedemand for the return of th e Stuarts to th e British Thron e. And much has

been made of the “roman tic” (tending on “crazed”) aspects of the cause of“Bonny Prince Charlie” in song an d But what made so many thou-sands of men a nd women risk so much for what appeared t o be an outland ish

and lost cause (and, at th e same time, get so close toHume and his Lowland Scottish Enlightenment circle knew th e reasons

quite well, since they were in constant touch with the Highlands and many ofthem, like Adam Ferguson, harkened from there. Moreover, mu ch of th e meatat their dinners came from th e North . The Highland fighters’ concern was nomore nor less the preservation and development of their mode of life. H u m eand his circle called it “barbarian” or “rude”; a little later Samuel Johnsoncalled it “patriarchal”; some contemporary authors call it “Celtic Feudalism”;

I might add tha t i t had elements of “runrig communalism.”2s It was a remark-ably “mixed“ system, composed of elements of all the known “stages” and“modes” of economic organization known to the Scottish En lightenment.z6

The Highland mode of life demanded t ha t each adul t male develop a gen-eralized military capacity that was continual ly exercised in th e inte rnal feuds,social banditry, civil and international war the Highlanders engaged in.

Moreover, the re were 652,000 Highlanders in 1750, or abou t 51% of the Scot-tish pop u l a t i~n .~ ’ he Highlanders were a heavy and dangerous presence in

th e mi nd of t he “modernize rs” of t he late 1740s, Hume included . Certainly,the Enlightened Lowland Scots could hard ly achieve much headway withtheir subtle “invasion” of England, if their Highland cousins were eruptingan d threaten ing t he whole British empire every decade or so.




3 10 C. George Caf fentz is

This way of life was increasingly being pressured an d transformed by theexpansion of capitalist relations emanat ing from the Lowlands. But the High-landers’ resistance t o becoming a mere nor thern appendix of t he Lowlandswas no t only a military concern. For this resistance migh t ignite th e mass ofthe Scottish and English population’s general lack of enthusiasm for the

Hanoverian Whig regime some day. It is all too easy t o shrug off historicalmight-have-beens, bu t there was n o s uch complacency in Edinburgh andLondon in 1745-6 The ’Forty-Fiver had been‘ t he fou rt h largest rebellion in

sixty years aimed at reversing t he consequences of t he “Glorious Revolution,”

and it h ad very nearly succeeded. Moreover, t h e loyalty of Britain’s other “0th-en”-the London “mob” an d th e Irish “natives”-could no t be coun tedu pon

if anoth er such uprising poured o ut of t he Highlands.Hume himself was a worried and antagonistic spectator to the ’Forty-

Fiver.Z8 He was sp ending the year wi th t he mad Marquess of Annandale in

England, and his correspondence with his Scottish circle avoided all directreference t o “ th e present unh app y troubles” for fear of i ncriminating himselfor his corr espondents i n case a letter was op ened by t he Jacobite authorities

in occupied Edinburgh. But a year a nd half after Culloden, Hume wrote and

published A True Accoun t o the Behavior and Conduct ofArchiba ld Stewart,Esq. Ina Letter to a Friend to exculpate t he former Provost of Edinburgh, Archibald

Stewart, from allegations t ha t he purposely let t he Jacobite forces takeEdinburgh in 1745. Hume applied t h e now classic Scottish Enlightenmen t

theory of stages i n explaining why it was so har d for Provost Stewart to de-fend th e city:

When Men have fallen in to a more civilized Life, have been al-lowed to addict themselves entirely to t he Cultivation of Arts andManufactures, th e habit of their Mind, still more th an that of th eir

Body, soon renders t he m Unfit for th e use of Arms an d gives a differ-ent Direction t o thei r Ambition But t he barbarous Highlanders,living chiefly by Pasturage, has Leisure t o cul tivate t he Ideas of mili-

tary Honour . . all this nourishes their martial spirit, &renders them,

from their Cradle, compleat soldiers in everything but the knowl-edge of D i ~ c i p l i n e . ~ ~

This contr ast was recognized by t he people of Edinburgh when they stoppedthe volunteer troops wh o were about to march out with Provost Stewart toconfront th e Jacobites an d “represented to t he m t he infinite Value of theirLives, in compari son of those Ruffians, t he highlander^."^^ But this contras tlaid t he basis of t he paradox: without t he inte rven tion of th e British army,

“eight Millions of People” migh t “have been subdued and reduced t o Slavery

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Hume, Money, and C ivilization 3 11

by five Thousand, th e bravest, but still th e most worthless amongst them.”31Thus A True Account posed a terrible paradox and was problematic for Humeas he was writing Political Discourses. He shared them with the others of thesocial circle he was entering int o dur ing th e early 1750s when he settled in

Edinburgh and took o n the post of Keepership of the Advocates Library andthat of joint secretary of the Philosophical Society of Edinburgh. Hume andhis circle agreed that Culloden must have decisive social consequences: theold Highland mode oflif e had to be termina ted.The question remained: how?

As William Ferguson put it:

Much more th an Jacobitism died at Culloden. Thereafter the disinte-gration of the old Highland society, already advanced in some

quarters, was accelerated. The patriarchal a uthorit y of the chiefs andgreat territorial magnates was gradually transformed int o landlord-ism. The demilitarization of Highland life broke the bonds of mutualinterest and idealized kinship which had bound chiefs and clans-men and paved the way for a new social relationship in which t helandlords came to regard their people as te nant s and cotters.32

The Scottish Enl igh tenment figures felt th e edge of the Highland knife at

the ir collective throats for six mon th s in t he fall and winter of 1745-6 whilethe ir fate hun g in the political-military balance. All of t hem vowed tha t itwould no t hap pe n again. But what was to be done ?

The Homes, Elliots, Oswalds, the Clephanes, the Smiths, and Hume’sother correspondents were actively involved i n finding a solution to the High-

lan d problem. First, of course, was th e phase of slaughter, extirpation,transport, and exile.33 Then came the legislation directed at destroying thefabric of th e communalist-feudal-pastoral life, from the Act prohibit ing High-land Dress to the abolition of Heritable Jurisdic tions, a Parliamentary actionthat Hume informed Montesquieu was one of th e most beneficent results of

t he ’ F ~ r t y - F i v e r . ~ ~ ut slaughter and legislation followed the previous rebel-l ions and nothing had essential ly changed. Repressive violence andproh ibit ion were not e noug h to transform the Highlands. Something morewas required: civilization.

The task of civilizing th e Highlands, i.e ., of transforming th e Highlandmode of life to a capitalism fully integrated wi th the rest of Britain an d theworld market would have to be “m icro-m anage d,”’an d ha t job fell to t he

juridical intellectuals of th e Scottish Enlightenment. The Highlands becametheir special field of social experimentation in the half century afterC u l l ~ d e n . ~ ~ume’s Political Discourses was one of man y efforts to map out th estrategy for such a program of transition. In this regard, it is worth no ting




3 12 C. George Ca ffen tzis

th e place an d time of thei r publica tion : Edinburgh in Janua ry 1752. This wasright in th e midst of a n intense but carefully negotiated period of legislation

preparing the infra structure of this IMF-type pla nni ng effort and the selec-tion of its personnel, which had its focus in t he various legislative acts directed

at first pacifying and th en civilizing th e Highlands. Youngson describes thi speriod i n t he following words:

After th e collapse of t he Rebellion, a large num ber of estates, mos t ofthem in the Highlands, were forfeit to the Crown through theattainer for treason of their owners. The Vesting Act of June 1747authorised the Scottish Court of Exchequer, as guardians of Crownrevenues in Scotland, to survey and value these estates, appo int fac-

tors, determine claims and pay creditors. In all, fifty-three estateswere surveyed, an d for ty-one of these forfeited estates were sold bypublic aucti on to pay creditors, but t hirt een estates were inal ienably

annexed to t he Crown by the Annexing Act of March 1752. This Actprovided tha t the rent an d profits arising from the estates where t obe used solely “for th e Purposes of civilizing th e Inhab itant s up onth e said Estates, an d oth er Parts of the Highlands and Islands of Scot-

land, an d promoting amongst the m t he Protestant Religion, goodGovernment Indust ry an d Manufactures, an d the Principles of Dutyand Loyalty to his Majesty, his Heirs an d Successors, and t o n o ot herUse or Purpose whatsoever.” Unpaid Commissioners, of whom therewere at various times between twenty -eigh t an d thirty-five, were ap-point ed; crown officials, noblemen, judges, substan tia l lairds.36

Annette Smith, in her description of the preparations leading u p t o t he draft-ing and passage of t he Annexing Act, writes th at “in th e years preceding thesuccessful passing of th e Annexing Act, th e ultim ate aims of anne xati on, the

methods of achieving these aims, and arrangements for administering theestates were widely discussed i n S ~ o t l a n d . ” ~ ’ hese discussions included th emajor figures across th e Scottish political spectrum-from Lord Mi lton to

Lord Desford-in agreement tha t someth ing mus t be done to finally “civilizethe Highlands.” Indeed, General Bland, th e Commander-in-chief in Scotland,sent a paper ent i t led “Proposals for Civi l is ing th e Highlands” to t he

Caledonian Mercury in June of 1747.38The Annexing Act was an exemplary legaltool aimed at practically solving one of the major problems central to t hePolitical Discourses, just as undoubtedly Hume’s Edinburgh lawyer circle helpedset up the wording of th e Act.

One way of establishing how close Hume was personally to the AnnexingAct is to examine the num ber of members of t he Board of Commissioners a nd

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Hurne, Money, and Ci viliz atio n 3 13

Trustees for the Annexed Estates tha t m et between 1755 and 1784 who wereacquaintances, friends, or colleagues of Hume. Of the fifty-five ordinary mem-

bers of t he Board, Hume was acquainted wi th a t least twenty-three. Of the tenex-officio members, Hume was in some communication with at least five.39

Moreover, given Hume’s identif ication with th e legal profession via his posi-tion at the Advocates Library, th e predominance of lawyers in t he Commissionwould have also brought Hume directly in touch with the work of the Com-

mission.40 Finally, a number of Hume’s closest intellectual peers like Lord Kamesand friends like Gilbert Elliot became important players in t he C o r n m i ~ s i o n . ~ ~

Thus Hume’s conception of civilization would have a ready audienceamo ng friends and colleagues who were legally charged in the text of the

Annexing Act with “civilizing the Highlands.” This concept was at the center

of their theorizing, a nd the Political Discourses analyzes the process of t rans -forming a “barb arian” and “rude” people i nt o a “refined” and “civilized”one , i.e., a people who operate wholly wi thi n a legal system of property ex-change relations.42

The very order of t he essays in th e 1752 Political Discourses (amplified in1753-4 in the Essays) shows us Hume’s inte nt:

I. Of Commerce

11.111. OfMoneyIV. Of InterestV. Of Balance of TradeVI. OfTaxesVII. Of Public CreditVIII. Of the Populousness of Antient NationsIX. Of the Protestant Succession

X. Of the Balance of PowerXI. Of Some Remarkable CustomsXII. Idea of a Perfect C o m m ~ n w e a l t h ~ ~

Of Luxury [later Of Refinement in th e Arts]

Here we see th e agenda of social reconstruction set out for th e Commission-

ers in outline, from the material foundations to th e demography to thepolitical superstructure. The anti-Jacobite tenor is clearly determined by theinclusion of t he essay on the Protestant succession th at was ready for publi-cation in 1748 bu t was withdrawn since it was still too “risky“ th en .4 4 The

first pages of the Political Discourses show us the way Hume envisioned theproblematic of the Highlands:




3 14 C George Ca ffentzis

As soon as men quit their savage state, where they live chiefly by hu nt -ing and fishing, they must fall into the classes [of husband men andmanufacturers]; tho’ the a rts of agriculture employ at first the mostnumerous part of th e society. Time and experience improve so muchthese arts, that the land may easily maintain a greater number ofmen, than those who are immediately employed in its cultivation,or who furnish the more necessary manufactures t o su ch as are em-ployed. If these superfluous hand s apply themselves t o th e finer arts,which are commonly denominated the arts of luxury, they add to th ehappiness of the state; since they afford to many the opp ortuni ty ofreceiving en joyments , which they would otherwise have been unac-

quain ted . But may not another scheme be proposed for theemployment of these superfluous hands ? R 5-6)

The initial problem of the Political Discourses is posed by “superfluous ha nd s”coming out of a tran sit ion from a “savage state” and being driven in to themanu factur ing labor market by increasing ag ricultu ral productivity. Thequestion to be answered is: what is the best “scheme” for the employment ofthese “superfluous han ds”? This indeed is th e problem of “civilization,” i.e.,how one transforms rural clanspeople i nto civilized beings. But this was ex-actly the problem th at was posed by the Annexing Act of March 1752 and wason the m inds of t he hundreds of Scots who were simultaneously readers ofthe Political Discourses an d prospective or actual Commissioners for th e An-nexed Estates.

Hume, of course, posed the problem of civilization i n th e form of “gen-

eral principles” in th e PoliticalDiscourses, as he warns us in t he first paragraphsof that book R 3 . And, after all, in the world of the 1750s there were many

other barbarous people besides the Scottish Highlanders. But it would beunlikely that Hume, who was so deeply com mitted to “the application ofexperimental philosophy to moral subjects,” would no t be deeply interestedin the fate of an experiment-both of th e Annexing Act and the broader move-ment to civilize the Highlands-concerning on e of the most imp ortant moraland political questions taking place in his own country, being run by hisclosest friends, and involving the historical fate of his class.4s The civilizingof the Highlands clearly posed a paradigmatic test case for any theory of civi-

lization. His work, therefore, was of immediate interest to those of hiscompanions who were politicians involved with “the domestic governmentof the state, where the public good, which is, or ought to be their object,depends on the concurrence of a mu lt itude of causes” R 4 .

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Hume, Money, and Civilization 3 15

Money and Civilization

Now that one of the specific political projects of the Political Discourses, thecivilization of t he Highlands, has been established, the role of money in theproject must be defined. It clearly is important in Hume’s view by its place-ment in the series of topics in the Political Discourses, for the essay “O n Money”follows immediately after “Of Commerce” and “Of Luxury.” Hume’s ap-proach to the problematics of.money, however, is rather different from themercantile theorists who already had before them an ongoing, f unction ingworld market. He was, of course, quite cognizant of th is aspect of money,since he was a citizen of th e greatest power i n this market and h is own imme-diate Scottish ruling group was beginning to share in it through the tobaccoand sugar trade:

We know that by 1735 there were 47 square-rigged ships, mostly ownedby Glasgow merch ants, sailing ou t of Glasgow’s harbo urs at PortGlasgow an d of these 15 were trading to Virginia, 4 to Jamaica, 1 toBarbadoes, 1 to Antigua, 2 to St. Kitts, 5 to London, 3 to Boston, 5 to

the Mediterranean, 2 to Holland, 7 to Stockholm and this in additionto many English and foreign-owned ships bringing cargoes.46

This trade expanded dramatically in t he ensuing thi rty years, so th at in “1738th e Scots accounted only for 10 per cen t of the total British [tobacco] impor-tation; but by 1765 this’had risen to an astonishing 4 per c en t of a UK tradewhich had itself expanded remarkably in the interven ing years.”47

But Hume had his eye not on ly on th e slave plan tations of Jamaica andthe Carolinas, or the sugar wharves of Amsterdam; his major immediate con-cern was nearer at hand. For the problem posed by the Highlands was theextension of commercial relations to an economy that had no t been com-

pletely monetarized. Walter Scott, decades later, was deeply aware of th isproblem and chronicled th e transition from a clannish to a capitalist atti-tude toward money i n his Waverley series. His works still have muc h t o teachphilosophers a nd historians of money. It would be worthwhile t o reflect onthe little exchange described in th e epigraph of th is paper; i t is classic Scott.First, money is no t being exchanged between t he Highlander Callum and t heEnglishman Waverly “productively” (i.e., for capital, labor or even commodi-ties), bu t i t is a quasi-gift to be spent o n a “luxury.” Second, t he money itself

is a golden object of “deligh t”; it is a “treasure” and no t necessarily an ab-stract mediator to a market world. Finally, th e “sp leuchan” represents th econstrictions on th e free flow of moneta ry exchanges embedded in Highland




3 1 6 C. George Ca ffen tzis

life. This small exchange illuminates t he strength of archaic economic prac-tices in the Highlands of t he mid-eighteenth century.

What role, then, could money play in modernizing and civilizing theHighlanders, who were still in thrall t o the “gift economy”?

With this problematic i n mind we see that Hume’s con tinued referencesin the Political Discourses to “the ancient simplicity of manners” R 44 and“the first and more uncultivated ages of any state” R 42 are not only to somearbitrary anthropological construct, rather they also refer to the actual his-torical situ ation of th e Highlands in t he eighte enth century.48 Further, hisinsistence on the primary standard of a policy’s success or failure being a“change in the manners and customs of th e people” is not just a generalizedprecept. It refers to the immediate political problem of his circle.

Money could be an important element i n this change of manners, Humeargued, but no t as the mercantilist logic supposed, for:

The absolute quantity of th e precious metals is a matte r of great in-difference. There are only two circumstances of any importance, viz.,their gradual increase, and their thorough concoction and circula-

tion thro’ the state. R 46)

The actual quan tity of metals is no t impo rtan t, just as th e relativity of m o-tion makes the absolu te cons tan t velocity of a body unim porta nt, rather thedifferentials are crucial. The accelerative effects of an increase in the moneysupply and the extensive increase in the field of monetary impact are thecrucial variables of change for Hume. This bi t of Newtonianism in moral (here,“economic”) subjects was typical of Hume. For he prided himself o n bringingNewtonian “experimentalism” in to “t he science of MAN” T xv, and exempli-

fied at T 332-46), and the Newtonian “experimental meth od” was to go fromthe phenomena to the forces and hence back to the phenomena. Real forces,however, can only be seen at play when accelerative (or decelerative) effectsare

Surely after Culloden, Hume’s reflections on th e real social force of moneywere quite useful in answering th e question: w hat kind of monetary strategyhad to be adopted to bring about a permanent change in t he mann ers andcustoms of the Highlanders? First, there had to be an increase in the money

supply, since “’tis only in this interval or intermediate situation, betweenthe acquisition of mo ney and rise of prices, that th e increasing qu an ti ty ofgold and silver is favourable to indust ry” R 38). As the new money diffusesthrough the social field, thousands of surprising accelerative microeffectsarise: “manufacturers employ more workmen” but “workmen become scarce,

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the manufacturer gives higher wages, bu t a t first requires an increase of labour”while the workman “returns from the market with greater quantity and betterkinds” of goods, and t he farmers who supply the market “apply themselveswith alacrity to raisingmore.” This increase in the absolute quant ity of money“must first quicken th e diligence of every individual” R 38, my italics).

Similarly, what is importan t is not simply th e ratio between the absolutequa ntity of money and the absolute quan tity of commodities in a country.The real effect of money is measured in the increasing number of “collisions”

between commodities an d money. This number is determined by how much asociety has moved from th e “ancie nt simple manner” t o a state of “industryand refinement.” For as indust ry and refinement intensify, th e number and

area of money-commodity collisions increase, absorbing and digesting the

money supply automatically.These real effects are clearly not in dependent of each other. The first can

support and amplify any movement of t he second. This was impor tan t advicein 1752, for if th e civilizing transformation from simple to refined mannersis to be accomplished with alacrity in the Scottish Highlands, there neededto be an effort to “quicken the diligence of every individual .” Thus Hume’spolicy recommendat ion: “The good policy of the magistrate consists only inkeeping [the quan ti ty of money], if possible, still increasing; because, by tha t

means, he keeps alive a spirit of industry i n th e nat ion , and increases thestock of labour, in which consists all real power and riches” R 39).

Whe n one examines the banking industry i n Scotland in th e years imme-diately after th e ’Forty-Fiver, we see th at b oth London a nd Edinburgh seemedto be heeding the Humean message, or else Hume was considering the mes-sages emanat ing from the Scottish bankers and financial advisors of George

11. Here is a list of financial actions taken in between 1746 and 1753 relevantto t he money supply’s relation to t he Highland problem:

a) In July 1746 th e British Linen Company was chartered with an au tho-rized capital of €100,000. As Neil Munro describes th e opera tion , it quicklyled to increasing th e circulation of mone y throughout Scotland:

Its more obvious business was to foster the line n trade by th e imp or-tati on and distribution of flax, and the collection and sale of themanufactured product. This necessitated agents all over the count ry

with a certain amou nt of ready money a t the ir comm and . In a verysho rt time tho se agents were provided with British Linen Companypromissory notes for €5, €10 and €20, payable on dem and, and €100bearing interest at 3.5 and 4 per cen t. Those notes the agents used i n




3 1 8 C. George Caffentzis

paying for goods received, an d th e Royal Bank [of Scot land], with,whom the British Linen Company kept its account and had a sub-stantial credit, retired the m as a ma tt er of course. This British Linen

Company’s network of agents throughout the country laid thefoundation of th e widespread system of branches whic h has givensuch a n impulse t o Scottish banking.s0

(b) New banks were begun i n Glasgow and Aberdeen in 1749 . The Banking

Company of Aberdeen was the first private banking company to issue bank

notes in Scotland.s1

(c) In 1751 th e city fathers of Edinburgh asked for and received a loan for€5,000 from the Royal Bank of Scotland to launch a major “urban renewal”project t ha t would make Edinburgh a “Modern Athens.“

(d) In 1751 the two major Scottish Banks, the Bank of Scotland and th eRoyal Bank of Scot land, concluded a pact of coope ration an d agreed upo na clearing house for financial paper.s2

(e) “In March 1753 th e Royal Bank in troduced what was virtually th eequivalent of the mode rn bank draft, to enable its customers to remit

mone y by post without t he necessity for sendi ng bank

These acti ons set the basis of a system of paper-credit money t ha t, wi thi na short time, dominated Scottish economic life. For specie was incessantly“drained” nto England. “To provide a currency for the payment of workmen’swages an d the like, private companies a nd private individuals in many parts ofthe country issued notes for trivial sums.”s4 ndeed, someth ing of a small no temania exploded in post ’Forty-Five Scotland making silver an d gold a rarity inaverage transactions, t o t he point that Adam Smith in 1776 would note:

An operat ion of thi s kind [the issue of paper money] has, within thesefive and twenty or thi rty years, been performed in Scotland, by th eerection of new banking companies in almost every considerabletown , and even in some count ry villages The business of the

country is almost entire ly carried on by means of t he paper of thosedifferent banking companies, and which purchases an d payments ofall kinds are comm only made. Silver very seldom appears except inthe change of a twenty shillings bank note, and gold still ~e . l d o m e r . ~ ~

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Hume, Money, a nd C ivi l izat ion 3 1 9

Indeed, it would seem that this transi tion from a metallic to a paper-basedmonetary system was th e practical answer to Hume’s strategy of stimulating“the spirit of industry” in t he Highlanders i n order to help change their “cus-toms and habits.”

But Hume was extremely suspicious of this development, though he rec-ognized tha t i t could lead to th e accelerative effects th at he deemed crucial inthe role money can play in the civilizing process. He wrote as a footnot e in“On the Balance of Trade”:

We observed in Essay 111 [“Of Money”], th at money w hen increasing,gives encouragement to industry, during the interval between theincrease of money and t he rise of t he prices. A good effect of th is na-

ture may follow to o from paper credit; bu t ‘tis dangerous to precipitatematters, at th e risk of losing all by the failing of that credit, as musthappen upon any violent shock in public affairs. R 68)

Hume was no t alone i n his concern. Charles Munn quotes a passage the direc-tors of t he Bank of Scotland wrote in 1752:

taking int o consideration the circumstances of t he country with re-

gard to the great circulation of paper credits occasioned by privatepersons erecting themselves i nt o Banking Companies without anypublic authorit y, particularly t he two Banking Companies lately setup in Glasgow were of the opinion th at some measure would bespeedily taken for preventing the dangerous consequences tha t mightarise no t only to this company in particular bu t to the credit of thenation i n general from too great a circulation of paper.

After quoting the directors, Munn added, “Seemingly someone at the OldBank had read the proofs of David Hume’s Essays, Moral, Political, etc., pub-lished in 1752.”56Hume continued his suspicion of paper credit throughoutthe 1750s, if his 6 April 1758 letter to Lord Elibank, his long-tim e Jacobitefriend and critic of paper money, is any indication. Elibank had given Humeproofs of his Thoughts on Money, Circulation, a nd Paper Currency to commentupon , and in response Hume wrote:

Banks are conven ient by th e safe Custody quick Conveyance ofMoney; but as to the Multiplication of Money, I question whetherit be any Advantage either to a n industrious or idle Country. It seemsto prevent the Importation of as much Bullion (which has a real




320 C. George Caffentzis

intr insic Value) as the Paper amoun t to . The Bank of Amsterdam doesnot multiply Money.s7

Was Hume’s hostility to paper credit based o n theoretical metallism? Didhe reject paper money because he argued th at money had to be a commoditybefore it could become a meta-commodity (as he seems to do in his most mer-cantilist reference to bullion’s “real int rin sic value”)? Certainly his criticismis mainly directed at Scotland and the American colonies, where paper moneywas increasingly being used. What were his criticisms? They were four: (i)paper money tends to drive precious metals from circulation, “paper credit orcurrent paper was introduced in [our colonies], which caused all the silver todepart” R 188); (ii) paper money “gives too great facility to credit, which isdangerous” R 72); (iii) paper money is useless in international transactions,for “foreigners will no t accept [it] in any payment’’ R 35); (iv) paper moneycauses inflation “by increasing money beyond its natural proportion to labourand commodities, and thereby heightening their price to the merchant andmanufacturer” R 36).

Each of these reasons, however true they were for eighteenth-century Scot-land, do not in themselves show us that Hume was a theoretical metallist,though it was undoubted ly Hume’s hostility to “paper money,” t o “paper asmoney,” to “paper credit,” th at convinced Schumpeter that Hume was a theo-retical metallist. Schumpeter concluded this in the face of some obviouscounter-evidence, especially the fact that Hume begins his essay “Of Money”with one of the classic formulations of functionalism in the philosophy ofmoney:

Money is not , properly speaking, one of the subjects of commerce;but only th e inst rument which men have agreed upon the facilitatethe exchange of o ne comm odityfor another. It is none of t he wheelsof trade: It is the oil which renders th e mot ion of the wheels moresmooth and easy. R 33

But what was th e nature of Hume’s critique of paper money? Did it arise froma deep sense of ontological violation evoked in him by paper money? Do thefour problems with paper mon ey listed above cons titu te such a thorough-

going rejection?The first of the four problems is an application of Gresham’s law; thesecond is a sociological observation that was quite relevant for the Scottishsituation in th e immediate afte rmath of th e ’Forty-Fiver; he th ird is a simplerecognition that Scottish paper shillings were no t “world money”; but the

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Hume, Money, and Civilization 321

fourth is the most telling o n this accou nt, for whenever a philosopher uses aword like “na tural” in her /hi s critique, somethin g basic is being signaled.What is the “natu ral proportion” that paper money upsets?

In order to answer thi s question we must recognize th at Hume has a com-plex analysis of “na tur e” and th e “natu ral.” For h e contrasts “natu ral” to“miraculous,” to “unusual,” to “artificial,” to “civil,” and to “moral” in theTreatise on Hu man Nature (T 474-5). The no tion of “natu ral” he is using here isin immediate contrast to “artificial,” i.e., “performed with a certain design

and i ntenti on” or “purposely contriv’d and directed to a certain en d” (T 475,529). The natural/artificial contrast here is not so muc h one between the

paper and precious metal qua money, but rather a contrast suggested byHume’s hydraulic model of inte rna tion al money flows that define a “usual”

versus an “unusu al” state. Hume asks us to suppose th at , by a miracle, the“money of GREAT RITAINwere multiplied fivefold i n a n igh t.” This miracle, h eironically argued, would set off a process of equilibration th at would bringthe mo ney of Great Britain “t o a level with foreigners.” He th en generalized:

Now, it is evident, th at th e same causes, which would correct theseexorbitant inequalities, were they t o happen miraculously, must pre-vent their happening in th e common course of nature, and must for

ever, in all neighbouring nat ions, preserve money nearly proportion-ate to th e art and indus try of each n at ion. All water, wherever itcommunicates remains always at a level. Ask naturalists th e reason;they tell you, th at, were it to be raised in any one place, t he superiorgravity of t ha t part n ot being balanced, must depress it, till it meet acounterpoise; and tha t th e same cause, which redresses the inequal-ity when i t happ ens, must for ever prevent it, without some violentexternal operation. R 63-4)

“Natural” here relates t o this hydraulic model, which requires a communica-tion and flow of the systemic fluid. But paper money does not flow throughoutthe world system, e.g., foreigners would not accept the British Linen Com-pan y notes as payment for linen manufacturing equ ipm ent . Consequently, it

cannot find its “na tura l” level. This characteristic of paper money does notnecessarily make it “un-na tural” on all dimensions. For, as Hume said of vir-tues and vices, paper and precious metals are both artificial and natural.

And here we should make a textual note. The following crucial passagefor our argument was no t t o be found in t he first five editions of the essays inPolitical Discourses which were included in Essays an d Treatises on Several Sub-jects in 1753-4 (i.e., 1752, 1752 [Znd ed.], 1753-4, 1758, 1760), bu t i t appeared




3 2 2 C . George Caffentzis

in th e 1764 edition and those after. Hume begins the vital paragraph in whichthe passage is placed a bit shamefacedly by noting “all these questions oftrade and money are extremely complicated.” Then in a typically Humeanturn of phrase he continues:

the re are certain lights, in which this subject may be placed, so as torepresent the advantages of paper-credit and banks t o be superior totheir disadvantages. That they banish specie and bullion from a stateis undoubtedly true; and whoever looks no farther th an thi s circum-

stance does well to condem n them; but specie an d bullion are no t ofso great consequence as no t to admi t of compensation, and even a n

overbalance from th e encrease of industry and of credit, which maybe promoted b y a right use ofpaper money. R 70 my italics)

Something had changed in t he twelve years between 1752 and 1764 tobring about the new “light” on the matter of paper money. I suggest that it wasthe process that Smith described in the Wealth ofhrations: th e gradual domi-nance of paper in most transactions in Scotland and th e tremendous growthof the Scottish economy based o n th e inte rnational tobacco boom, the i n-

creased prices for cattle, and the intensifying productivity of the linen trade.58But at the same time, t he effects tha t Hume warned of con tinu ed to in -

tensify: a) the flow of specie from Scotland, and (b) th e multiplication ofsmall and branch banks and the issuance of notes by these banks and compa-nies. As Mu nn writes:

The shortage of specie was particularly acute in th e period 1761-5but it was by no means a novel situa tion . Specie was never i n ab un-

dant supply. The lack of coin forced many firms in trade andmanufacturing to issue ‘Birmingham buttons’ and notes of smalldenomination as substitutes for coins. Notes for 1 [shilling] and 5

[shillings] were the most common. These notes often conta ined th eoptio n clause which was frequently invoked. In 1764 a writer in th eScots Magazine estimated t ha t there were 14 note issuers in Scotlandin addition to t he public banks; t he editor reckoned tha t th ere weretwice tha t number.s9

This led to a “severe balance of payments crisis in 1762-63,” the time of thesixth edition of the Essays. The two major banks of Scotland agitated for abill that would deal “with the banking irregularities of those vexatious Scots-men .” It became Act 5 of George 111. c. 49 (1766), which made i t unlawful “t o

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issue any no te , ticket, token, or other writing for money, of t he nature of abank no te , circulated, or t o be circulated as specie, but such as shall be pay-able on demand in lawful money of Great Britain, and wi thout reserving anypower or option of delaying payment thereof for any time or term whatever.”60

But let us no t forget that Hume’s 1764 additions include tha t telling littlephrase “right use of paper-money.” Was this evidence of a major conceptualfissure in Hume’s thought? Had the ensuing twelve years of intense experiencewith th e consequences of a paper-money economy i n the context of a majorpiece of social engineering (t he civilizing of the Highlands) revealed a contra-

diction lurking in Hume’s philosophy of money from the beginning? That is,did this experience finally force him to recognize the mismatch between anearlier monetary metallism and his philosophical functionalist ontology?

In order to answer these questions we must examine what Hume meantby money from his earliest writings, i.e., Hume’s semantics of money.

Money and Representation

For Hume the basic semantic relation between money and commodities is

that of “representation.” Consider some typical passages in “Of Interest” deal-ing with th is relation:

If a man borrow money to build a house, he then carries home a greater

load; because the stone, timber, lead, glass, &c. with the labour of themasons and carpenters, are represented by a greater quantity of goldand silver. But as these metals are considered chiefly as representations,there can no alteration arise, from their bulk or quantity, their weightor colour, either upon their real value or their interest. R 48 my italics)

In all these transactions, i t is necessary, and reasonable, that a consider-able part of the commodities and labour should belong to the merchant,to whom, in a great measure, they are owing. And these commodities hewill sometimes preserve in kind, or more commonly convert into money,which is their com mon representation. R 5 2 , my italics)

But Hume develops two not ions of “represent ation” in his general se-mantics which h e presents in his Trea x on Human Nature in t he late 1730s.

One such no tion is based on the relations of ideas to impressions, the othe r i sbased on the formation of conventions and language.61 Frequently, standardaccounts of Humean semantics conflate bo th notions of “rep resenta tion ,”but it is important t o differentiate the m carefully for our purposes.





The first no tion of representation arises from th e mechanics of impres-sions slowly fading away i nt o ideas th at th en enter in to a gravity-likeassociative force field of th eir own , wh ich is continually being perturbed bynew impacts of impressions. “Representation” is Hume’s original word todescribe that intimate binding between t he two ontological domains of hissystem: ideas and impressions. For “when I shut my eyes and t hink of mychamber, th e ideas I form are exact representations of the impressions I felt”(T 3) . More generally, Hume’s first major philosophical conclusion is statedin terms of “representation”: “all our s imple ideas in their first appearancea r e deriv’d from simple impressions, which are corespondent to t hem, an dwhich they represent” (T 4 . Thus, representation is an ur-relation in Humeanphilosophy that is presupposed by the field of associative attractions, “whichto the mental world will be found to have as extraordinary effects as in t henatural” (T 12-13). For an idea‘s representation of an impression is its origi-nal mark of identity before it gets carried off in to th e flux of association.

“Representation” plays ano ther crucial role in Book I of the Treatise inthe solution to th e problem of abstract ideas. For “abstract ideas are there-fore in themselves individual, however they may become general in theirrepresentation” (T 20). Here, of course, representation loses th e role of beingth e “b irt h mark” of ideas and leaps to infinity. For representation makes itpossible for one idea to be connected not only to one, but to two, three, or nother ideas as th e forms of association, resemblance, contiguity, and causationallow. From an ur-relation between ideas and impressions, representationbecomes a meta-relation between ideas themselves. In Book I of the Treatise,therefore, representation is crucial to Hume’s whole “ATTEMPTo introduceexperimental reasoning in to M O R A LUBJECTS’’ut i t plays some th ing of anextra-systemic role on the upper and lower bounds of his th ough t, for it me-

diates ideas and impressions as well as ideas themselves.Is money, then , an idea that represents commodities in t he way th at theidea of red represents red impressions or the way the idea of triangle repre-sents the infini te number of ideas of scalene, isosceles, equilateral triangles?Money would t he n be a vague, distant, and abstract representation of t heimmediate impressions that the passions of mercantile affairs excite or aneven more vague, di stant, an d abstract idea of mercantile ideas. But money isnot an idea at all for Hume. For he explicitly connected the representative

capacity of money with th e functioning of conventions and language, thesecond no tion of representation, no t with th e mechanics of impressions andideas. Textually, we see th is i n the way that money is dealt with, cursorily, inBook 111, while the presentation of impressions by ideas is discussed in Book1of the Treatise.

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Hume, Money, and C ivilization 3 2 5

In part ii, section 2 of Book I11 of the Treatise, Hume discussed “t he Originof justice and property” and men tioned money in passing. He argued t ha tbefore one can define the ideas of property, right, and obligation a certainframework of hum an coord ination must be presupposed. This framework is

rooted i n convention:

It is only a general sense of com mon interest; which sense all themembers of th e society express to o ne another, and which inducesthem to regulate their conduct by certain rules. I observe, that it will

be for my interest to leave another in the possession of his goods,provided he will act in the same manner with regard to me. (T 490)

He then presented his famous example of the two men in a row boat who,without any explicit agreement, regulate th e rhy thm of their strokes, as be-ing the image of social coordina tion based upo n convent ion. He cont inued:

In like manner are languages gradually establish’d by human con-ventions without any promise. In like manner do gold and silverbecome the common measures of exchange, and are esteem’d suffi-cient payment for what is of a hundred times their value. (T 490)

So the great systems of representation-language and money-arise no t outof th e nexus of ideas-impressions-ideas, bu t o n th e mu tua l, reflexive expecta-tions of human agents. Convention is also an ur-relation i n the moral worldjust as idea-representation is an ur-relation i n the mental world, but it arises

out of artifice, i.e., a response t o th e instability of possession and the scarcity ofgoods. Society is a hu man in vent ion that solves th e problems of instabilityand scarcity via linguis tic and commodity exchanges. Just as in t he world of

ideas substances seem to be primary (because they seem to unifymicrodifferences), so too in th e moral world it seems that t he not ions of prop-erty and justice ough t to come first. But Hume argued th at neither view lookscarefully enough in to the field of microrelations t ha t invest the largely fic-tional grand entities of these worlds.

Hume’s moderately conventionalis t conception of money is most explic-itly stated i n his 10 July 1769 letter t o t he aut hor of Dictionn aire du comm erce,M. Morellet R 214-15). He takes Morellet to task for his view that “there en-

ters nothing of human convention in th e establishment of money” anddismisses the prejudices of metallism as simply confusing a method for pre-vent counterfeiting for a theo ry of money “But, when I take a shilling, Iconsider i t no t as a useful metal, bu t as something which another will take

Volume 27, Number 2 ,November 2001




from me; and the person who shall convert it in to metal is, probably, severalmillions of removes distant” R 214).

The rest of his argument against Morellet’s metallism is strictly empiri-cal, citing the fact that th ou gh average British shillings are 20-40% worn,“yet they pass,” and poin ting out the peculiarities of monetary un its th rough-out history, inclu ding th e “l and money” of Pennsylvania. But th en hementioned, qu ite crucially for our work, “Our colonies in America, for wantof specie, used to coin paper currency; which were not bank notes, becausethere was n o place app oin ted to give money in exchange; yet th is paper cur-rency passed in all payments, by conv en tion . ” In this case Hume seems tohave even gone beyond h is more generous views of paper money advanced inthe 1764 edi tion of the Essay. He seems to have endorsed, in Berkeleyan fash-ion , the possibility of a completely nonm etal lic, nonconvertible currencyand to have definitely dismissed “theoretical metallism.” But he did add th e

following com men t on th e American use of paper money: “and still migh thave gone o n , had it no t been abused by th e several assemblies, who issuedpaper without end , and thereby discredited th e currency.” Thus the problemwith paper currency is no t t ha t it violates some deep ontological, representa-tional relation with commodities. It simply arises from the greater possibilities

of “abuse” due to its ease in iter atio n. This tendency to abuse paper currencyis not accidentally American a nd Scottish, i.e., these were societies th at areno t completely in the orb it of civilization.

On reading this letter one must conclude that Hume was certainly no“theoretical metallist” i n 1769, bu t he still was a metallist. Why? Preciselybecause he argued that money is conventional Since paper mon ey was sodeeply vulnerable to th e quality of a n inf ini ty of mutual but dubious (Scot-tish) promises, Hume was a practical metallist. Ironically, previous metallists

argued tha t because gold, silver, etc. were naturally money, a ny att emp t touse paper in their stead would be “unnatural .” Hume argued th e converse:just because, by its nature, mo ney is conven tional and , so, artificial, the con-trol of and restraint on its issue is directly depen dent u po n th e refinementand civility of its issuers. A people just coming ou t of a rude and savage state

(like the Scottish Highlanders) or a people merging i nto such a state (like theAmerican colonists), would fin d it too tem pting to abuse such a currency todeal with passing crises, even thou gh its credit was essential to the general

health of society.One of Hume’s last letters to Adam Smith o n money referred t o a “melan-

choly Situation” tha t seemed t o answer his cautious ontology of mon eyalmost perfectly. The letter was dated 27 Ju ne 1772, in the midst of the AyrBank crisis, which not only engulfed Scotland, but also initiated the first

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Scottish commercial crisis th at t hreatened the English banking system, cre-ating something like a monetary ’Forty-Fiver.6Z The Ayr Bank began itsmeteoric career in Ayr i n November 1769 wi th €150,000 initial capitaliza-tio n and “branches at Dumfries and Edinburgh, agencies at Glasgow,

Inverness, Kelso, Montrose, Campbeltown and other places so tha t there wasan agency or branch i n every region of th e count ry.”63 aking its motto “ProBono Publico” literally, it immediately began to issue notes in earnest, so

th at i ts paper soon consti tuted two thirds of the Scottish notes issued while

it had a €600,000 debt to London banks by 1772. The results of the unre-strained (and uncivilized) overtrading quickly became evident. Humedescribed the calamity in staccato prose:

Co nt in ua l Bankruptcies, univer sal Loss of Credi t, and endlessSuspcions. There are bu t two stand ing Houses in this place . TheCase is little better i n London. It is thou ght, tha t George Colbroke[head of a London bank and former director of t he East India Com-pany] must soon stop; and even th e Bank of England is not entirelyfree from Suspicion.64

He ended this breathless paragraph of financial horror by almost taunting

Smith wi th queries: “DOEvents any-wise affect your Theory? Or will it occa-sion t he Revisal of any Chapters?” The only good Hume saw coming ou t ofthe catastr ophe was a “Check given t o our exorbi tant an d ill groundedCredit.” Smith, who had developed a theoretical defense of paper money bythe 1760s, did not take Hume’s suggestion and refused any major revaluationof paper money in The Wealth of Nations on th e basis of th e But forHume it must have been a final verification of his fears.

Conclusion: Hume’s Practical Metallism by Default

Once the claim th at Hume was a theoretical metallist is refuted, we can see thathis philosophy of money was much more coherent t han it initially appeared.

Money and its representative func tion , for Hume, was no t based on a “natu-ral” and necessary representative relation between its precious substance andth e glittering world of commodities. On th e contrary, money operated onthe basis of a n ur-structure of mu tual convent ions tha t continually tested

the reasoning and emotional capacity of the agents involved. There was no th-ing innately natural about a ny particular “propor tion” between money andcommodities. Putting th is result in terms of his two immediate predecessorsin t he philosophy of money, Locke and Berkeley, Hume argued tha t money

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Hume, Money, and Civ i l iza tion 3 2 9

NOTES

I would like to thank t he members of the Kress Seminar on the History of Econom-ics, especially Paul Wendt, for their com ments on an earlier version of this paper. Iwould also like to thank the journal’s blind reviewers for their t horough editorialadvice and useful suggestions.

1 Walter Scott, Waverly; or, ’T is Sixty Years Since,ed. Claire Lamont (Oxford: Ox-ford University Press, 1986), 146.

2 See, for example, Karl E. Case and Ray C. Fair, Principles ofE cono mics, 5th ed.(Upper Saddle River, N.J.: Prentice Hall, 1999), 854-5.

3 David Hume, Writings on Economics,ed. Eugene Rotwein (London: Nelson, 1955).(Hereafter cited as “R” with page numbers inserted parenthetically in the text.)

4 Douglas Vickers, Studies in the Theory ofMoney,1690-1776 (Philadelphia: Chilton,1959), 31. According to Schumpeter, the term “metallism” has its roots in GeorgKnapp’s Die Staatliche Theorie des Geld es(Leipzig: Duncker and Humblot, 1905).Joseph A. Schumpeter, History ofEconom ic Analysis(New York: Oxford UniversityPress, 1954), 288. It is somewhat cognate to th e previous “bullioni sm” and later“commodity money theory.”

5 Schumpeter, History ofEconom ic Ana lysis,288.

6 Schumpeter, History ofEconom ic Ana lysis,290-1.

7 Locke’s definitions of mixed mode and substance ideas can be found in JohnLocke, A n Essay Concerning Hu man Understanding, ed. Peter H . Nidditch (Oxford:Cl arendon Press, 1975), 288 and 296 respectively. For a discussion of Locke’s con-trast between mixed mode and substance ideas and its relevance t o the philosophyof money, see C. G. Caffentzis, Clipped Coins, Abused Words and C ivil Governmen t:John Locke’s Philosophy ofM one y (New York: Autonomedia, 1989).

8 C. G affentzis, Exciting the Ind ustry ofM an kin d: George Berkeley’s Philosophy of

Money (Dordrecht: Kluwer Academic Press, 2000), 274.

9 David Hume, A Treatise off fu m an Nature, ed. L. A. Selby-Bigge, 2nd ed. , revisedby P. H. Nidditch (Oxford: Clarendon Press, 1978). (Hereafter referred to as “T”withpage numbers inserted parenthetically in the text.)

10 For the reevaluation of Hume among the logical positivists see Alfred JulesAyer, Language, Truth and Logic (New York: Dover, 1952), an d for the beginning ofhis transformation in to a minor postmodern saint see Gilles Deleuze, Empirisme etsubjec t iv i te ; essa i sur l a na ture huma ine selon H u m e , 2n d ed. (Paris: Pressesuniversitaires de France, 1973).

11 Norman Kemp Smith, ThePhilosophy ofD avid Hume(London: Macmillan, 1941),503. A vast literature has developed since Smith’s commentary. A recent summa-tio n of the field can be found in The Cambridge Comp anion to Hume, ed. David FateNorton (Cambridge: Cambridge University Press, 1993), especially Robert J . Fogelin’s“Hume’s Scepticism,” 90-116.




330 C . George Caf fentzis

12 Vickers, Studies in the T heory ofM on ey,223.

13 Karl Marx, Con tributio n to a Critique of Political Economy (Moscow: ProgressPublishers, 1970), 164.

14 Marx, Contributions to a Critique ofPolitica1Economy, 164.15 Th e Le tt er s o fD av id Hume ,ed. J . Y. T. Grieg (Oxford: Clare ndon Press, 1969),

16 I emphasize “Scots” because Hume considered himself more Scot than British,even though he is frequently termed the greatest of the British empiricists. Forexample, he writes “we” when referring t o th e Scots in this paean: “Is it n ot strangethat, at a time when we have lost our princes, our Parliaments, our ind ependentGovernment, even the Presence of our chief Nobility, are unhappy, i n our Accent T

Pronuncia tion, speak a very corrupt Dialect of the Tongue which we make use of; isit not strange, I say, th at , in these Circumstances, we shou‘d really be th e Peoplemost distinguish’d for Literature in Europe” (Greig, Letters, 255). His diatribes againstthe “barbarians on the Thames” are well known: cf. Duncan Forbes, Hume’s Philo-soph ical Politics (Cambridge: Cambridge University Press, 1975), 189.

17 T. M . Devine, T he Scott ish Nation 1700 2000 (New York: Viking, Z O O O ,4-19.For an acute analysis of the forces th at led to the Scottish intelligentsia’s espousal of“free trade“ in t he context of a mercantilis t empire see Michael Fry, “A CommercialEmpire: Scotland and British Expansion in th e Eighteenth Century,” in Eighteenth-

Ce ntu ry Scotland: N ew Perspectives,ed. T. M . Devine and J. R. Young (East Linton:Tuckwell Press, 1999), 57.

18 For recent discussions of th e imperial strategies of th e Scottish Lowland elitesee C. G. Caffentzis, “On the Scottish Origin of ‘Civilization’,” in Enduring We sternCivilization: T h e Construction o f the Concept of We stern Civiliz ation an d lt s “Others,”ed. Silvia Federici, (Westport, Ct.: Praeger, 1995), 13-36, Eric Richards “Scotland andthe Uses of the Atlantic Empire,” in Strangers w ith in t he Realm: Cultural Margins o fthe F irstBritish Empire,ed. Bernard Bailyn an d Philip D. Morgan (Chapel Hill: Uni-versity of North Carolina Press, 1991), 67-114, and Fry, “A Commercial Empire,” in

Eighteenth-Century Scotland,ed. Devine an d Young, 53-69.

19 Caffentzis in “The Scottish Origin of ‘Civilization”’ argues that , i n effect,Mansfield attempted to “civilize” English law by making it conform to the Civil Lawsystematics th at the Scottish legal system incorporated from th e Calvinist Institutes.

20 Richards in “Scotland and the Uses of the Atlantic Empire” has a very interestingaccount of the incorporation of Scottish personnel in to the British state apparatus.

21 Almost all the commentary literature o n Hume’s economics recognizes tha tHume mixed econom ic subjects wi th politics, as Jam es Bonar wrote long ago inPhilosophy and Political Eco nom y(London: George Allen and Unwin, 1923), 107. Butthere are no standard texts th at pose the development problem of the Scottish High-lands as a major political economic problematic for Hume’s circle.

22 The novelistic narrative of the events is in Walter Scott’s Waverly. WilliamFerguson points o ut t ha t if another element of th e Jacobite uprising had succeeded,viz.,the landing in Scotland of 10,000 French troops under Marshal Saxe, he military

1: 136-7.

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Hume, Money, and Civi l izat io n 3 3 1

story might well have end ed differently indeed; see William Ferguson, Scotland:1689 o thepresent (New York: Praeger, 1968) , 147-8.

23 A classic, thoug h dated discussion of Jacobitism can be found in Sir CharlesPetrie’s TheJacobite Movement (London: Eyre and Spottiswood, 1959). A more re-

cent text tha t deals with the class complexity of Jacobitism in England is Paul KleberMonod, Jacobitism and theEnglish People 1688 1788 Cambridge: Cambridge Uni-versity Press, 1989).

24 Although there is no do ubt t ha t th e Jacobite risings had their center in theHighlands, there is now a growing historical literature distinguishing Highland so-cietyperse and Jacobite politics. Murray G. H. Pittock is an arch revisionist as shownin his TheMyth oftheJacobite Clans (Edinburgh: Edinburgh University Press, 1995),where he argues th at there was certainly very strong Jacobite support outside th eHighlands from 1689 on . This was often not seen in th e ’Forty-Fiver perhaps be-

cause Charles Edward decided to make all his army (even the French support troops)wear Highland dress (55). Pittock also questions whether the Scotch merchants andtradesmen absolutely rejected the Jacobite uprisings, since many Episcopaliansamong them did come ou t in support of Charles Edward’s “cause” 82).

25 One must be careful about essentializing t he “Highland mode of life,” for manyelements of i t like th e kilt and the clan tartan were invented after the ’Forty-Fiver asHugh Trevor-Roper famously pointed ou t in his article “The Invention of Tradition:The Highland Trad ition of S cotla nd,” in The Invent ion of Tradi t ion, ed. EricHobsbawm and Terence Ranger (Cambridge: Cambridge University Press, 1983).

26 The Highlands before 1745 canno t be seen as a purely noncommercial society,however. It too was caugh t u p in a generalized trans ition to capitalism a nd resis-tance to it before the Lowland “modernizers” took co ntrol of the process after the’Forty-Fiver. As Allan I. Macinnes, an other revisionist historian, puts it in Clanship,Commerce and the House of Stuart, 1603 1788 East Linton: Tuckwell Press, 1996):“Rather than accept historical Whiggish interpretations th at Scottish Gaeldom wasstatic socially an d underdeveloped economically prior to the last Jacobite rising in1745, emphasis is placed on the presumption of mobility and th e bipartisan spirit ofent rep reneurship underscoring the pre-Clearance Highlands. Absentee landlord-ism, indebtedness, rent-raising and th e removal an d relocation of clansmen werenot products of th e ’Forty-Five, but part of an ongoing process of commercialisman d cultural assimilation that can be traced back to the early seventeenth century”(x). Lenman in his T h e acobiteClansoftheG reat Glen 1650 1784 London: Methuen,1984), 148 argues th at t he “financial straits of certain key local figures [in th e High-lands]” was a condition for th e ’Forty-Fiver, while Walter Scott in Rob Roy makeson e of the key elements of the book’s plot an attemp t to create a financial crisisinvolving th e Highlands in order to instigate a Jacobite rising.

27 For the demographic estimate see Bruce Lenman, Integration, Enlightenment,and Ind ustrializa tion: Scotland 1746 1832 London: Edward Arnold, 1981), 3.

28 A stan dard biography of David Hume is Ernest Campbell Mossner, The Life ofDavid H u m e (Oxford: Clarendon Press, 1970).




3 3 2

29 David Hume, A True Account of the Behavior a nd Cond uct ofArch ibald Stewart,Esq., Lord Provost ofE dinbur gh, In a Letter to a Friend (London, 1748)’ 9.

30 Hume, A TrueAccount, 22.

31 Hume,A TrueAccount, 11.32 Ferguson, Scotland, 154.

33 As Macinnes writes in Clanship, Commerce and the House ofb tuar t: “The imme-diat e afterm ath of t he ’Forty-Five was marked by systematic s ta te ter rori sm,characterized by a genocidal i nte nt t ha t verged o n ethn ic cleansing. . . . The clearin te nt of the Whig commanders by the time of Culloden was to inflict a crushingdefeat on Jacobite clans that would remembered for generations. The first [phase]was the wholesale slaughter no t only at Culloden and in the days after the battle,

but in succeeding weeks prior to the depar ture of Cumberland at the outset of sum-mer when he felt th at Gaeldom had been finally subjugated. The second was theselective terrorism directed against Jacobite districts. The third was the con tinu-ing and deliberate starvation of Jacobite and neighbouring districts thr oug h thewillful destruction of crops, livestock and property wi th the stated in ten tion t o ef-fect either clearance or dea th” 212).

34 Mossner, Life ofDavidHume, 181. For selections from t h e texts of th e Disarm-ing Act 1746) and the “Act for taking away and abolishing th e heritable jurisdictionin tha t part of Great Britain called Scotland. I’ see English Historical Documents 1714

1783 ed. D. B. Horn and Mary Ransome (New York: Oxford University Press, 1957).

35 For a general discussion of these stages see T. C. Smout, A History of the scoff lshPeople 1560-1830 (Suffolk: Collins/Fontana, 1972). Macinnes, in Clanship, Commerceand the House ofStuar t, writes of this period: “State-sponsored terrorism was to giveway to state-sponsored improvement.”

36 A. J . Youngson, After the Fourty-Five: The Economic Imp act on the Sco ttish High-lands (Edinburgh: Edinburgh University Press, 1973), 27. Macinnes, in Clanship:Commerce and the House ofdtua rt, presents a more prickly picture of the operation:

“In response to a plethora of civilising schemes from unctuous ideologues andunplaced opportunists, t he Whig government had decided tha t 13 forfeited estatesof Jacobite chiefs and gentry were to be annexed inalienably to th e Crown in 1752.The Annexed Estates were th us created as corridors of improvement th at were to bemodels of planning a nd management from the sout hern through the central High-lands with interse ctions in western an d no rthe rn districts. At th e same time,resistance of clansmen t o the forfeiture of their chiefs and leading gentry had beencowed by a final show trial th at led to the execution of James Stewart of th e Glens forhis supposed role as accessory to th e murder of Colin Campbell of Glenure-thegovernment factor immortal ised as ‘t he Red Fox’. 217).

37 Annette M. Smith, JacobiteEstates of the Forty-Five (Edinburgh: Jo hn DonaldPublishers Ltd., 1982), 20.

38 Annette Smith, Jacobite E states, 20.

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Hume, Money, and Civ i l iza t ion 3 3 3

39 For a list of the Commissioners see Annette M. Smith, Jacobite Estates, 239-41.The acquaintance Hume had wi th these commissioners was that they were eithercorrespondents, mentioned in his correspondence, or fellow members of the SelectClub or the Philosophical Society of Edinburgh. The “a t least” is cautionary here. Ibelieve t ha t with more research many more of Commissioners can be shown to beconnected to Hume personally.

40 Of the thir ty initial Commissioners app oin ted in 1755, ten were lawyers, thelargest occupational block. See Jo hn Stuart Shaw, The Managem ent ofScottish Society1707-1764 (Edinburgh: Jo hn Donald Publishers Ltd., 1983), 78.

41 For a discussion of Kames’s activities on the Commission see Ian Simpson Ross,LordKames and thescotland ofH is Da y (Oxford: Clarendon Press, 1972), 316-22.

42 The stages theory of savagery, barbarism, and civilization developed by theScottish Enlightenment th inkers was greatly influenced by their juridical training.

43 The essays “Of the Original Contract ,” “Of Passive Obedience,” and “Of theCoalit ion of Parties” were added in subsequent editions of the Essays.

44 Mossner, The Life o fDav id H u m , 269.

45 For Hume’s experimental philosophy see T 4-6. An historian of the AnnexingAct, Annette Smith, in Jaco biteE states of the Forty-Five sees in the Board the primeproject of “Enlightenment Man” in Scotland who was “forward-looking, far-sighted,excited by an interest in physical and mental experiment and change, and the com-

missioners a nd some of those who init iate d the Annexing Act were typical of thebest of their age” (232). It was, in effect, one of the first governing boards of a public“regional development” corporation.

46 Bruce Lenmen, A n Economic History ofM odern Scotland, 1660-1976 (Hamden,Ct.: The Shoe String Press, 1977), 91.

47 T. M. Devine, The Scottkh Nation. A History 1700-2000 (New York: Viking,ZOOO), 105.

48 Hume himself was no t insensitive to the power of this form of life, once it was

properly t amed , as his ambivalent role in the “Ossian affair” indicates. See ErnestCampbell Mossner, The F orgotten Hume (New York: AMS Press, 1967), 82-102.

49 For an interesting discussion of the nature and limits of Hume’s Newtonianismas well as his familiarity with Newton’s emphasis o n forces see Peter Jones, Hume‘sSentiments: Their Ciceronian and French C onte xt (Edinburgh: Edinburgh UniversityPress, 1982), especially 14.

50 Neil Munro, The History of the Royal Bank ofS cotlan d, 1727-1927 (Edinburgh:R. R. Clark, Ltd., 1928), 110.

51 Munro, Th e History of the Royal Bank of Scotland, 111

52 One reason for this unity of the “public banks” was the competition they werefacing from the “private” provincial banks in Glasgow and Aberdeen, according toCharles W. Munn in The Scot t ish Provincial Banking Com pan ies 1747-1864(Edinburgh: Jo hn Donald Publishers Ltd., 1981), 11-12.




334 C. George Ca ffen tzis

53 Munro, The History of the Royal Bank of Scotlan d, 120.

54 Munro, Th e History of the Royal Bank of Scotland, 120.

55 Adam Smith, An Inquiry into the Nature and Causes of the W ea lth of Nations

(New York: Modern Library, 1937), 248.

56 Charles Munn , Th e Scottish Provincial Banking Com pan ies, 12, for the qu otationand comm ent. Of course, Munn is referring to th e essays in Political Discourses thatwere incorporated in to Essays, Moral, Political, e tc. in the following year.

57 Ernest Campbell Mossner, ed., “New Hume Letters to Lord Elibank, 1748-1776,”Texas Studies in Literature and Language, 1962), 441. But in the following para-graphs Hume does point out tha t a n increase in the money supply can have a positiveeffect on industry a nd in the process can stimulate productivity in manufactures to

such a n extent that it might actually decrease the price of manufactured goods.Consequently, there ca nnot be any simple quant ity theoretic relation betweenmoney supply and prices.

58 Lenman, An Economic History ofM od ern Scotland, 86-100.

59 Munn, The Scottish Provincial Banking Co mp an ies, 18.

60 Munro, The History of the Royal Bank of Sco tland, 129.

61 Most comm entators on Hume’s semantics do n ot note this te nsion between

the ideational and co nve ntiona l aspects of significance. They largely hold to thediscussion in th e first book of th e Treatise th at emphasizes th e semantic relationbetween ideas and impressions. PA11Ardal seems to point in this direction, however,in his “Language and Significance in Hume’s Treatise,” Ca na dia n Journal ofPhiloso -phy 16 1986): 779-84. He claims that “there is a difference between giving anaccount of t he way in which we manage to th ink abstract thoughts alth ough allideas are of particulars, and th e account to be given of the place of language insocial life” 783).

62 Munn, The Scottish Provincial B anking Co mp an ies, 33.

63 Munn, The Scottish Provincial Banking Com pan ies, 31.

64 Letters of David Hurne, 476.

65 For Smith’s views in the 1760s see his Lectures on Justice, Police, Revenue andArms, delivered in the Universityof Glasgow, reported by a student in 1763 ed. EdwinCannon (New York: Kelley an d Millman, 1956), 190-210. He compared the mon-etary system to a country’s material infrastructure i n the Lectures and argued th atthe least investment in th e system with the same result is to the public good. “Hencethe beneficial effects of the erection of banks and paper credit. It is easy to show tha tthe erections of banks is of advantage t o th e commerce of a country” 191). He alsocriticized Hume’s partiality to specie: “ w r . Hume] seems, however, to have gone alittle in to the notion that public opulence consists in money [understood as specie] I’

Smith, in his chapter on money in t he W ealt h ofhrations, continued favoring papermoney even though he deals explicitly with the 1764 banking crisis.

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Hum e, Money, and Civ i l i za t ion 3 3 5

66 Munro in A History of the Royal Bank ofsco tlan d, 122, describes the “small notemania” of the 1750s in Scotland in th e following way: “To such an extent did the useof those trumpery paper promises by individuals of no substance extend , that theScottish sense of humour fou nd release in prin ting and distributing parodies ofth em as squibs. The so-called Wasp Note for ‘One Penny Sterling, or in th e Optionof the Directors, three Ballads six days after a Demand,’ elegantly printed in Glasgow,with a n orn am en ta l border of wasps, the mo tto ‘We Swarm,’ and th e signature of‘Daniel Mcfunn’ is the best example of those satires.”

67 There was anoth er dilemma Hume a nd his fellow Enlightenment intellectualshad to face: the generalization of highway robbery th at largely had its roots in themechanics of the cattle trade. Drovers returning from cattle trysts loaded with specieattracted highway robbers, and th is situa tion set th e stage for branch banking. AsPeter Linebaugh, in The London Hanged: Crime an d C ivil Society in the Eighteenth

Century (London: Allen Lane, 1991), 212, pointed out, there was a dialectical rela-tio n between t he two kinds of expropriators, the bankers and the robbers: “InScotland, in th e first half of the [eighteenth] century drovers dealt at the Crieff andFalkirk cattle trysts largely in gold and silver. After mid-century tents and shedswere erected where tellers from Edinburgh banks provided notes of credit. By theend of th e centu ry such banks had corresponding banks i n London, if no t inSmithfield [the main meat market in London] itself, so that drovers were n o longerendangered by carrying large sums of rhino. Such financial safeguards increasedthe volume of trade and speed of realization.”

68 I have been largely concerned with Hume’s reflections on the forms of moneyand their differential impact on economic transformation in this paper. I have notinvoked Hume’s discourse on the moral a nd political consequences of the exten-sive use of mo ney and th e expansion of commerce and (commercially-oriented)industry. Money, for Hume, has a moral and political weight; it is no t only a spur toindustry and the spread of luxury. I plan to deal with thi s aspect of money in th e lastvolume of my trilogy on th e philosophy of money.

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