Hume and Montesquieu David Hume and Baron de Montesquieu were two of the Enlightenment Era's most famed philosophers. These two men had remarkably innovative ideas regarding the subject of commerce, which were very similar in many ways, yet different in others.

Renowned philosopher David Hume's Political Discourses essays presented an argument against the mercantilist theory, which insisted on retaining money only in one's own country (Penelhaum, 1995). Hume's gold-flow theory argued that increased money in one country automatically circulates to other countries.

For example, according to Hume, if England receives an influx of new money, the new money will increase the prices of labor and domestic products in England. As a result, foreign country will offer cheaper products than England, which will then import these products, resulting in the circulation of money to other countries.

Hume asserted that the same thing occurs if a country loses money. If England loses money by purchasing imports from foreign countries, this act will drive down the prices of labor and domestic products. As a result, England's products will be cheaper than foreign products, and the country will gain money through exports.

Hume believed that a country's happiness and military strength are both dependent upon strong industry. In peaceful time, a strong workforce can produce luxuries and improve the arts. This increases the country's happiness. In time of war, a strong workforce can serve in the military.

Hume also claimed that foreign trade both increases happiness and strengthens the military. Foreign trade familiarizes people with the pleasures of foreign luxuries, raising the quality of life within a country. Foreign trade also increases industry, which strengthens the labor pool for possible military strength.

Hume was against the mercantilist theory because of its fear that national wealth is hurt when foreign neighbors prosper. Hume felt this was morally and politically inaccurate. According to Hume, a country will prosper only when its neighboring countries do well, also. He claimed that this was because a nation's...

Hume felt that it was immoral and unproductive to be jealous of another country.
According to Hume:

Having endeavored to remove one species of ill-founded jealousy, which is so prevalent among commercial nations, it may not be amiss to mention another, which seems equally groundless. Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbors with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish, but at their expense. In opposition to this narrow and malignant opinion, I will venture to assert, that the increase of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbors; and that a state can scarcely carry its trade and industry very far, where all the surrounding states are buried in ignorance, sloth, and barbarism. (Penelhaum, p. 311)"

The French writer Baron de Montesquieu had similar views as Hume. Montesquieu developed the concept of a separation of powers and taught that "invisible wealth which could be sent everywhere" would force governments to govern with greater wisdom (Shackleton, 1995). Basically, Hume and Montesquieu presented a moral and political argument for free trade, saying that commerce could elude violence, and maintain itself everywhere.

According to Montesquieu, commerce was important to a country and its citizens for a number of reasons, which differed from Hume's. In the 18th century, commerce could escape rulers because invisible wealth could be sent without a trace. The rulers could not control wealth through commerce.

In addition, said Montesquieu, commerce carried many moral implications. Future commerce of merchants prevented them from unethical business practices. In addition, commerce worked to tie individuals together rather than causing them to fight.

Montesquieu argued that capitalism, or economic interests, would improve the government and politics…