Steuart, James Denham
Steuart, James Denham
Sir James Denham Steuart, British mercantilist, was born in Edinburgh in 1712, the son of Sir James Steuart, solicitor-general for Scotland under Queen Anne and George i. After legal studies at the University of Edinburgh and admission to the Faculty of Advocates there in 1735, he traveled extensively on the Continent. While in Rome, he became a supporter of the Jacobite cause; in 1745 he was involved in the second Jacobite rebellion, and, after the battle of Culloden, was forced to live abroad until 1763. In 1773 he changed his name (in connection with the inheritance of an estate) to Steuart Denham. He died in 1780.
A disciple of Montesquieu and Hume, Steuart embedded his economics in a wider sociological matrix. His main work, An Inquiry Into the Principles of Political Economy (1767), attempts a synthesis of contemporary knowledge from the point of view of late mercantilism.
Basing his analysis on the near-Malthusian conviction that “the generative faculty resembles a spring loaded with a weight, which always exerts itself in proportion to the diminution of resistance,” Steuart saw economic life in dynamic terms. According to him, two types of society succeed each other: slave societies and free nations. In the former, men work because they are subject to others; in the latter, because they are subject to their own wants. When an agricultural surplus is achieved, free societies split into rural and urban sectors. An exchange economy then develops, desires are released, production is stimulated, wellbeing is induced, provided only that there is “mutual serviceableness,” i.e., adjustment of the various branches of the economy to each other.
As a mercantilist, Steuart did not believe that this adjustment would come about spontaneously. The competitive merchant, as the mediator between the farmers and the urban “free hands,” was its prime agent; but it had to be ultimately guaranteed and, if necessary, engineered by the statesman. Population growth, for instance, might bring either “procreation” (mere increase in numbers) or “multiplication” (an increase in numbers that ensures continued serviceableness of all, i.e., social and economic harmony). The government must see to it that there is multiplication rather than procreation, that some trades are encouraged and others discouraged, and that new employment is created for workmen displaced by labor-saving machines, etc.
The government must also manage the market, Steuart maintained: “A statesman must be constantly attentive, and so soon as he perceives a too frequent tendency in any one of the scales to preponderate, he ought gently to load the opposite scale . . . Thus when the scale of demand is found to preponderate, he ought to give encouragement to the establishment of new undertakings, for augmenting the supply, and for preserving prices at their former standard: when the scale of work is on the preponderating hand, then every expedient for increasing exportation must be employed, in order to prevent profits from falling below the price of subsistence” (The Works . . . , vol. 1, pp. 490-491).
Steuart's over-all view of development is pessimistic. A first phase brings a growing population associated with what he calls “infant trade”; a second phase, a static population and “foreign trade”; and a third, a declining population and “inland trade.” When industrialization begins, in the first stage, the workers, being as yet semirural, do not wholly depend on wages; costs are low, the country competitive. Later, the workers increasingly depend on wages alone, and these must rise because agriculture finds it difficult to feed rising numbers at stable cost. (Steuart came close to a theory of diminishing returns.) As export prices rise, competitiveness declines. As the home population increases further, and as population shifts away from the land, foodstuffs will be imported. But soon the foreign buyers of industrial goods and providers of agricultural commodities will in their turn become industrialized, and this will create crisis conditions for the more advanced economy, which cannot lower its costs, high wages and profits having been consolidated. To prevent unemployment, home consumption must then be encouraged, wider “inland trade” making up for the deficiency of “foreign trade.” This, however, is at best a partial remedy, and emigration from the now relatively overpopulated country will be necessary. Policy will therefore all along have to aim at permanently low cost, especially at the retention of wages at subsistence level. Free trade would help only if all countries had the same costs of production—which is not, in fact, the case.
Steuart's greatest weakness lies in his failure to offer an adequate theory of value and price. His attempt to invalidate Hume's analysis of inflation is hardly convincing either. Steuart argued that from an influx of specie nothing can be concluded as to prices, because it is not certain that people will increase their expenses in proportion to their wealth. It is characteristic of his interventionist outlook that he did not appreciate the near-automatic process involved.
In Britain, Steuart met with scant response. Smith never mentioned him, though some of Smith's arguments may have been aimed at Steuart. He was more appreciated in Germany, especially in the late nineteenth century, by the historical school, because of his historical bent and wide use of the inductive method. Some of his minor writings (for example, his “Considerations on the Interest of the County of Lanark” of 1769, a kind of social survey) deserve to be remembered in this context. Steuart's abiding importance, however, is as a leading representative of the remarkable efflorescence of the social sciences in the Scotland of his day.
[See alsoEconomic Thought, article on Mercantilist thought.]
WORKS BY STEUART
Steuart's name is also catalogued as Steuart Denham, Sir James; or Denham, Sir James Steuart.
(1767) 1967 An Inquiry Into the Principles of Political Economy. Edited by Andrew S. Skinner. 2 vols. Edinburgh: Oliver & Boyd. → Contains a biographical sketch and an analytical introduction.
The Works, Political, Metaphisical, and Chronological, of the Late Sir James Steuart of Coltness, Bart. 6 vols. London: Cadell & Davies, 1805. → Volumes 1-4 are a reprint of An Inquiry Into the Principles of Political Economy, first published in 1767. Volumes 5 and 6 contain various essays, among them Steuart's “Considerations on the Interest of the County of Lanark,” first published in 1769.
Feilbogen, Sigmund 1889 James Steuart und Adam Smith. Zeitschrift fur die gesamte Staatswissenschaft 45:218-260.
Johnson, Edgar A. J. 1937 Steuart: The Political Oeconomist. Pages 209-234 in Edgar A. J. Johnson, Predecessors of Adam Smith: The Growth of British Economic Thought. Englewood Cliffs, N.J.: Prentice-Hall.
Sen, S. R. 1957 The Economics of Sir James Steuart. Cambridge, Mass.: Harvard Univ. Press.
Stangeland, Charles E. 1904 Pre-Malthusian Doctrines of Population: A Study in the History of Economic Theory. Columbia University Studies in History, Economics, and Public Law, Vol. 21, No. 3. New York: Columbia Univ. Press.