Adam Smith\'s Free Trade Casuistry

Notes

A. Smith, The Theory of Moral Sentiments, VII.iv.34. Henceforth cited as TMS, Wealth of Nations as WN, and Lectures on Jurisprudence as LJ(A) for the report of 1762-63 and LJ(B) for the report of 1766. All Smith quotations are taken from the Glasgow Edition of the Works and Correspondence of Adam Smith (Oxford, 1976-87).
Ibid. VII.iv.33.
TMS VII.iv.9-13.
Ibid., VII.iv.33.
TMS VII.iv.16
E. Leites, "Introduction", 3. M. Sampson, "Laxity and Liberty in Seventeenth-century English Political Thought", 72-118.
D. M. Jones. Conscience and Allegiance in Seventeenth Century England: The Political Significance of Oaths and Engagements, 243-55.
Leites, "Casuistry and Character", 120.
Phillipson, "Adam Smith as Civic Moralist", 179-82.
Burke, An Appeal from the New to the Old Whigs, 102.
A. Smith, Lectures on Rhetoric and Belles Lettres, ii. 200. I am grateful to Knud Haakonssen for bringing this passage to my attention. Note also Sampson's comment that proponents of English common law in the seventeenth century had effectively "claimed that common lawyers were the casuists of English society". Sampson, "Laxity and Liberty", 88.
A. Smith, LJ(B) 1-2. Note Knud Haakonssen's analysis of this quotation, that for Smith there was no incompatibility between casuistry and system, and Grotius's 'casuistry' was compatible with Smith's emphasis on context (Haakonssen, "The Lectures on Jurisprudence", 48-66).
A. Smith TMS VII.iv.35. Cicero's primary concern in Book III was cases where the beneficial (utile) appeared to conflict with the right (honestum). See Dyck, A Commentary on Cicero, 483-654.
Cicero, De Officiis, 137.
A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, IV.ii.39 (henceforth cited as WN, and quoted from the Glasgow Edition of the Works and Correspondence of Adam Smith (Oxford, 1976).
Hunter, "Law, War, and Empire in Early Modern Protestant Jus Gentium"; Hunter, "Kant and Vattel in Context"; Hunter, "Vattel's Law of Nations".
Haakonssen, The Science of a Legislator, 45-82.
Tribe, Land, Labour, and Economic Discourse, 101-109.
Noticed by Jacob Viner (Viner, "Power versus Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries", 17).
The best treatment is still Jonathan Scott's Algernon Sidney and the English Republic 1623-1677, chapter 13.
Translated into English by Henry Hunt as A Treatise of the Interest of the Princes and States of Christendome Written in French by the Duke of Rohan.
Another key conduit-text for English audiences was through the unpublished manuscript of Pieter de la Court's The True Interest and Political Maxims of the Republick of Holland and West-Friesland, eventually published in 1702. See Weststeijn, Commercial Republicanism in the Dutch Golden Age, 352.
Walter "Slingsby Bethel's Analysis of State Interests", 489-506; Bethel, The Present Interest of England Stated, 1-2.
B[arbon], A Discourse of Trade by N.B, Preface.
The rise of trade competition between states did indeed create a new game, and 'the rules of this new game were in some respects novel', as argued by Hont, Jealousy of Trade, 187. But the point of Barbon's comments and of the following is that the state still needed to ensure its supply of those commodities that made up the sinews of power, and this (legitimate) need was distinguished from (illegitimate) jealousy of trade.
Charles Davenant, Discourses on the Publick Revenues, and on the Trade of England: Volume I, 5.
Ibid., 6.
Ibid. An unfair assessment of Petty: McCormick, William Petty, 298.
Ibid., 7.
Ibid., 7-9.
King, "Natural and Political Observations and Conclusions Upon the State and Condition of England 1696", 69.
Law, Money and Trade Consider'd, 49.
For the notion of a presupposition as a hypothesis for making aspects of an intellectual culture intelligible see Condren, Argument and Authority in Early Modern England, 1-12.
Webster, The Consequences of Trade, 8, 10-12, 17.
Hume, Essays, Moral, Political, and Literary, 255.
Ibid., 256-57.
Ibid., 261.
Ibid., 262-63.
An Account of the Constitution and Present State of Great Britain, 223.
Ibid., 224-33.
Ibid., 233-37.
Ibid., 237.
Ibid., 247-51.
Ibid., 254, 261-67.
Mortimer, The Elements of Commerce, 108-9, 113-4.
Ibid., 111-12.
Ibid., 114-18.
Ibid., 124.
Ibid., 148-149, 156-157.
Viner, "Power versus Plenty".
Smith, WN IV.iii.c.13.
Ibid., IV.iii.c.11-12.
Winch, Adam Smith's Politics, 130-131.
Smith, WN (1).1.
See the passages that strike today's reader as quaint, where productive labour is labour that 'fixes and realizes itself' in a 'subject or vendible commodity' as against unproductive labour that will merely 'perish' and not 'leave any trace', such as the labour of a servant, WN II.iii.1-2. Winch has offered a charitable reconstruction of the productive/unproductive labour distinction (Winch, "Scottish Political Economy", 452-453).
Smith WN (1).3.
Ibid., I.i.4, I.iii.1.
Ibid., II.v.9.
Ibid., II.iii.2. On the later reception of Smith's arguments by anti-war groups see Cookson, The Friends of Peace, 55ff.
Smith, WN II.v.24.
WN II.v.25.
II.v.30.
This presentation simplifies Smith's complete schema, for which refer to Tribe, The Economy of the Word, 117-132.
Smith, WN II.v.31. For a similar statement see WN IV.i.20, 26-27.
WN IV.ii.10.
WN IV.ii.11.
WN IV.ii.12.
Winch, "Scottish Political Economy", 450.
See Tribe Land, Labour, and Economic Discourse, 80-109.
By analogy with Conal Condren's argument in relation to the rhetoric of office (Condren, "The Persona of the Philosopher and the Rhetorics of Office in Early Modern England", 72).
A. Smith, Correspondence of Adam Smith, 164.
Tribe, The Economy of the Word, 54-55.
Steuart, An Inquiry into the Principles of Political Oeconomy, 231.
Ibid., 233-234.
For Smith's version of natural law in broad context see Haakonssen, "Protestant Natural Law Theory". 92-109.
Haakonssen, Science of a Legislator, 87-98.
Condren, Argument and Authority, 178.
Ibid., 178-99.
Ibid., 184.
Tribe, Land, Labour, and Economic Discourse, 101-109.
Winch, Riches and Poverty, 167-68.
Smith, TMS VI.ii.2.15.
Hont and Ignatieff, "Needs and Justice in the Wealth of Nations", 25-6.
Ibid., WN IV.ii.24. See also IV.v.a.36.
IV.ii.24.
IV.ii.29.
See Walter, "Slingsby Bethel's Analysis".
Smith, WN IV.ii.30. This assessment of the Navigations Acts is undercut by various statements elsewhere in WN – see II.v.30 and IV.vii.c.22-23.
Ibid., IV.ii.31.
Ibid., IV.ii.38.
Ibid., IV.ii.37.
Ibid., IV.ii.39. As noted, this work still required 'deliberation', just of a lower order. And the politician or leader of a party could develop beyond the character typical of their station and rise to the office of legislator – see TMS VI.ii.2.13-14. This is to read Smith as less severe on politicians than is common in the commentary.
Ibid., IV.ii.40.
Ibid., IV.ii.40, 42.
Ibid., IV.ii.44. The deep suffering of both groups in France following the Anglo-French commercial treaty of 1786 or Eden Treaty added to the pressure that burst in 1789. See Walton, "The Fall from Eden", 44-56.
TMS IV.2.10.
Ibid., VI.ii.2.16
LJ(A) i.53
Ibid., ii.91
Ibid., ii.80.
Ibid., ii.154.
The account might have been extended by considering Smith's discussion of how justice could be sacrificed to "reasons of state" in cases of "necessity", which related to food (corn) scarcities. It seems that such emergencies obliged the statesman to turn from the usual set of priorities and identify what "publick utility" might require in the case at hand, but Smith's comments here are brief and hostile. See WN IV.v.b.39.
A reading of Smith that was underway by the 1780s and in place perhaps as early as 1800. See Rothschild, "Adam Smith and Conservative Economics", 91; Teichgraeber, "Less Abused", 340.
Tribe, Economy of the Word, 62-70.
Tribe, "Natural Liberty and Laissez Faire", 23-44.
The example and argument are taken from Skinner, Visions of Politics, Vol. I, 48.
Winch, "Science and the Legislator", 506; Winch, "Adam Smith's Problems and Ours", 400.
Winch, "Adam Smith's Problems and Ours", 400 n51.
For an underutilised discussion see Donald Winch, "The Science of the Legislator: the Enlightenment Heritage". For a different view see Burns "Utilitarianism and Reform", 211-225.
Teichgraeber, 'Free Trade' and Moral Philosophy.
Viner "Adam Smith and Laissez Faire", 213-245.
Ricardo, The Works and Correspondence of David Ricardo, Vol. IV, 26.
Ibid., 29-30.
On this theme, in addition to Tribe see Coleman, "Mercantilism Revisited", 773-791; Winch, "Adam Smith: Scottish Moral Philosopher as Political Economist", 91-113.
Stern and Wennerlind, Mercantilism Reimagined, 4.
Viner, "Power versus Plenty", 10.
Because one of the effects of Smith's act of abstraction was to separate strength and wealth as phenomena the same argument can be put another way: an underappreciated element of Smith's intervention into political œconomy was to have raised the level of abstraction at which the discourse operated, a class of action in the history of political discourse that J. G. A. Pocock has advised we study closely (Pocock, "The History of Political Thought", 3-19).
Hont, Jealousy of Trade, 53.

Acknowledgements
I am grateful to the journal's referees and editor for useful comments on an earlier version of the paper. Thanks also go to colleagues who provided valuable advice: Conal Condren, Knud Haakonssen, Ian Hunter, Martyn Lloyd, Terry Peach, Leigh Penman, and Keith Tribe. This paper was delivered at the Fondazione Bruno Kessler in 2016, where Marco Cesa was a thoughtful discussant.

Notes on contributor
Ryan Walter is Senior Lecturer in Political Economy at the School of Politics and International Studies, University of Queensland. His work on the history of economic thought has recently appeared in Modern Intellectual History and History of European Ideas.
26

Adam Smith's Free Trade Casuistry





Smith held a low opinion of casuistry as a moral system because of its false precision and potential to corrupt our sense of duty. Yet Smith endorsed the basic premise of casuistical reasoning in relation to state administration – that the application of principles would need to take into account the circumstances of a given case, especially when principles conflicted. This paper recovers the casuistical character of Smith's exceptions to a policy of free trade, which he justified with reference to the statesman's higher duties of providing security and justice. The exercise has two key effects. The first is to direct attention to the manner in which Smith first isolated wealth as an analytical category distinct from strength, a precondition for his reintegration of strength and wealth as superior and inferior goals of statesmanship. This was a major disruption to existing argumentative conventions, one that reveals the dangers of accepting Smith's construction of a 'mercantile system' on his terms. The second effect is to highlight the implications of the disappearance of the statesman as an integrating site of reasoning with respect to multiple discourses of state administration. In short, the phrase 'free trade' is likely to mislead in relation to Smith.

Key words: economics, free trade, mercantilism, political economy, Smith, statesman


Adam Smith's Free Trade Casuistry


It is well known that Smith held a low opinion of casuistry as a moral system, and that he recommended its ejection from existing moral philosophy in The Theory of Moral Sentiments (1759). Casuistry was harmful because it attempted to prescribe rules for conduct with a grammatical precision that was simply impossible to attain, and because it might corrode the moral sense by inculcating 'evasive refinements with regard to the most essential articles of our duty'. Smith's key example comes from Book VII, where he referred to the case of a highway man who extorts a promise of payment from a traveler by threatening their life. The question arose of whether or not a promise extracted in such a manner was binding, and casuists were divided over the correct answer. While it was allowed by those on both sides of the debate that a good person would be anxious to keep their promise regardless of the circumstances in which it was given, the fact that the promise was extorted allowed additional factors to affirm or diminish its force, such as the sum involved and the wealth of the promisor. The nerve of Smith's argument was that judgement must always be made on the basis of one's sentimental response in the actual circumstances of the case, and that it is not possible to specify the correct judgement in advance by means of elaborate distinctions and exceptions.

This is certainly evidence of Smith's rejection of casuistry, yet it is crucial to note the context. First, 'casuistry' was a smear word in Protestant societies because it had come to be associated with 'the Roman Catholic superstition', despite the fact that casuistry was a key source for various strands of Protestant thought. Second, casuistry was under pressure as a genre because its central object – conscience – was being superseded as rival philosophical anthropologies instead posited 'character' and 'moral sense' as the focus for study, such as Smith's account of moral sentiments. Hence, when Smith claimed that casuistry was morally dangerous he was merely repeating a standard claim in the eighteenth century, one that concealed the close connection between casuistry and the morality that he developed in Theory of Moral Sentiments. Finally, casuistical reasoning in the sense of adjusting principles for circumstances and balancing conflicting principles was a widely diffused premise in the eighteenth century. Edmund Burke used casuistry in this positive sense, for example, when he rejected the idea that political problems 'concern truth or falsehood', for they should instead be seen in relation to the likely balance of costs and benefits, or 'nice points of casuistry'. It is in this sense that Smith used and endorsed casuistry as a mode of thinking.

Evidence for this last claim can be seen in Smith's preference for common law over statute law because of the former's ability to be 'better adapted to particular cases'. Also telling is Smith's approving treatment of Grotius as a jurist whose De Jure Belli ac Pacis (1625) was 'a sort of casuistical book for sovereigns and states' and amounted to 'a compleat system of jurisprudence'. Equally noteworthy is Smith's comparison of good casuistical reasoning in Book III of Cicero's De Officiis with casuistry in the negative sense of an overly-exact moral science. Cicero was different to the casuists because although he also elaborated 'nice cases', he did not aim at completeness but 'only meant to show how situations may occur, in which it is doubtful, whether the highest propriety of conduct consists in observing or in receding from what, in ordinary cases, are the rules of duty'. Cicero claimed, for example, that we should not return a sword that was left for safekeeping if the owner returns to collect their possession having lost their senses. In short, what Smith objected to was attempting to prescribe rules for all situations, while he endorsed the need for circumstance to modify the application of general rules, whether they be moral, legal, or political.

Given that Smith accepted that general principles would conflict in certain cases and require casuistical adjudication, it is worth asking if he deployed this mode of reasoning in relation to the statesman's duties towards a nation under his stewardship. To be clear, this inquiry involves asking after how Smith dealt with conflicting general principles in relation to state administration, not his moral philosophy and account of the impartial spectator. Accordingly, attention must turn to An Inquiry into the Nature and Causes of the Wealth of Nations (1776), where Smith addressed counsel partly derived from his natural jurisprudence to the figure of the statesman or legislator, 'whose deliberations ought to be governed by general principles which are always the same'. There we find that Smith adopted a casuistical approach to conflicting principles in relation to free trade, a policy that best promotes wealth, but one that should be sacrificed to the higher tasks of defence and justice as occasion required. The space for judgement that was created for Smith's statesman or legislator and his objectives was unified in the sense that it is the same figure of the statesman who is projected as the agent who decides and bears the task of interleaving state objectives. Before the World Trade Organization and the emergence of security strategists and economists as specialized and distinct intellectual personae, the statesman was a unifying office for judging the relative importance of conflicting state interests.

In making this argument the paper is indebted to Ian Hunter's brilliant recovery of casuistical reasoning in Emer de Vattel's Law of Nations (1758). Hunter showed that Vattel developed a diplomatic casuistry targeted at diplomats and statesmen, and its function was to supply the lower-level reasoning materials needed for judgement after the mutual disqualification of the higher-level principles of international justice and national interest. Unlike Vattel's justice and national interest, Smith's conflicting principles – defence, justice, wealth – were not equal but hierarchically ordered. This point directs attention to the fact that Smith first separated power and wealth as phenomena, which then created the need for a casuistry to specify their relations in cases of conflict. The paper begins by identifying the forms of argument that fused wealth and power, without using Smith's 'mercantile system' as a historiographical category, which then makes it possible to assess the utility of this category compared to the alternative account developed here. Attention then turns to how Smith isolated the analysis of wealth through his category of productive labour, and then subordinated wealth to security by specifying and casuistically resolving cases of conflict. The paper closes with some remarks on the importance of restoring the casuistical character of Smith's arguments. Above all, it greatly complicates the task of relating Smith's advocacy of free trade with the arguments of subsequent champions, such as David Ricardo. For the intellectual equipment with which Smith did his thinking – his genres, presuppositions, and discursive apparatus – reveals that he was directing advice to a projected officeholder that integrated discourses of economics and security, a discursive figure that quickly disappeared in the decades following Smith's death.

1. Before the Separation of Wealth and Power
Smith developed a conception of natural order in relation to trade and commerce by positing self-governing moral agents who pursued self-love within the constraints of moral propriety as defined by his version of moral sense theory. In doing so, Smith was innovating in relation to preceding counsel to the statesman. Yet Smith did not disqualify the statesman, he only truncated his usual set of tasks in view of the imperative not to disturb a superior natural order. These claims are well established. What is less well known is a further discursive innovation, by which Smith separated strength and wealth in phenomenal and analytical terms, which then enabled their hierarchical ranking. To establish this claim it is first necessary to review some standard treatments of strength and wealth in a manner that made it possible to charge the statesman with seeing to a nation's security and wealth simultaneously, without needing to prioritize between the two tasks. With this form of analysis in view, it will be possible to discern the effects that Smith's innovation had on the office of the statesman.

Three genres were most commonly used to conceive trade as an element of state strength. The first was interest analysis. Developed in England after translations of Henri duc de Rohan's D'Linterest des Princes et des Estats de la Chrestiente (1638), interest analysis treated a state's interests as objectively determined by its 'situation' and by the state of the balance of power in Europe. Such moves entailed the potentially dangerous pretension that interest writers could identify errors in statecraft and even attribute them to the pursuit of 'private interest' at the expense of the state's true interests ('true' and 'private' were common and antonymic predications). 'Trade' was routinely identified as a state 'interest' that required the careful attention of the statesman because it brought the elements of power into the state. One of England's most prolific seventeenth-century writers on interest, Slingsby Bethel, was completely unremarkable when he claimed that England ought to focus on its trade interest because it was the 'first domestic interest'. Bethel's reasoning was equally common: defence was the first interest of every rational creature, and as an island England needed naval defence, and naval strength was a function of maritime trade.

An overlapping genre was counsel on trade. Nicholas Barbon offered an explanation of why strength and trade had become so closely intertwined in the preface to his A Discourse of Trade (1690). Following the invention of gun powder, the stones and wooden engines that had been the ammunition and artillery of the Greeks and Romans had fallen out of use and been replaced by lead and cannon. The old weapons were easily procured and fashioned, while the new instruments were made from materials – such as iron and brimstone – that were not found in all countries, in which case they needed to be imported. Hence, '[t]rade is now become as necessary to Preserve Governments, as it is useful to make them Rich'. In other words, trade provided the very materials that constituted state strength.

Political arithmetic also provided a platform for discoursing on state power in relation to trade, especially regarding the management of the balance of power by calculating the strength of rival states. This is how Charles Davenant portrayed its role in his Discourses on the Public Revenues (1698). Davenant acknowledged the foundational contribution of William Petty, but claimed that Petty had over-estimated the strength of England and under-estimated the strength of other states for ignoble reasons. One of the proximate causes of Petty's errors was that the increasing power of France stood as a 'very unpleasant Object for the Parliament' that 'did disquiet the Mind of King Charles II'. The fact that Petty's calculations suggested a minimal disparity in power between France and England justified the actions of Charles II, who breached the Triple Alliance with the Dutch and joined with France, an act that was 'pernicious to the Interest of England'. This led Davenant to suggest that, on the issue of the strength of France, Petty 'rather made his Court, than spoke his Mind'. According to Davenant, serving the national interest required providing the statesman and his counsellors with the means to 'Compute and Compare the Power and Riches of the Adverse Party', above all, determining which state could endure a war for longer. War costs were to the state as bleeding was to the body, and while a state might indefinitely bear 'moderate Bleedings' (say, three million a year), it could die at the loss of great quantities of blood (say, twenty million in three or four years). At the same time, statesmen also needed to know the strength of their allies to ensure that these states made honourable contributions to the war effort. Davenant's friend and source of estimates, Gregory King, calculated that each year from 1688 to 1695 England had decreased by three million sterling, while France decreased by six million, and that the overall ratio of decline between the two states was 6:7 in England's favour, while Holland enjoyed a modest increase over the same period of time.

When writing in one of these overlapping genres, a pamphleteer could assert equivalences between what we tend to think of as discrete phenomena. Consider this claim from John Law, famous as a failed finance minister in France, in his pamphlet Money and Trade Considered (1720): 'NATIONAL Power and Wealth consists in Numbers of People, and Magazines of home and Foreign Goods. These depend on Trade, and Trade depends on Money'. While this would be an odd claim to make today, Law's assertion of the inter-intrusion of power and wealth was completely typical for the period, and by treating this as a presupposition of intellectual argument we can make sense of these texts on their own terms. In particular, it is possible to understand why one of the most common pieces of counsel on trade was for the statesman to act directly upon a trade that was thought to be particularly important for power and wealth. Consider in this light William Webster's The Consequences of Trade (1740). Webster claimed that trade maintained people, circulated money and goods, and drew bullion from other nations; men were needed to fill army ranks, sailors to serve the navy, and bullion was necessary to supply them both. From here, Webster could identify the wool trade as possessing two special properties: it was labour-intensive and exported-oriented. Hence, the effects of the wool trade were 'greatly more beneficial than any other', and needed to be nurtured by the statesman.

The notion of the statesman simultaneously managing strength and wealth can be found in some unexpected places. Consider David Hume's essay 'Of Commerce', first published in 1752. Hume noted the commonly held maxim that 'the public becomes powerful in proportion to the opulence and extensive commerce of private men'. It followed that there was no conflict between the goals of state strength and public happiness. Hume set himself the task of scrutinizing this claim, and his central move was to divide the bulk of a state's population into two classes: husbandmen (farmers) and manufacturers. Opulence was then identified with the extent to which an agricultural surplus could support the manufacture of luxuries, a boon arising from progress in the agricultural arts. The other way to employ the non-agricultural segment of the population was to conscript them into the state's fighting forces: a 'state is never greater than when all its superfluous hands are employed in the service of the public'. These conflicting employments suggest that there was a clash between the goals of state strength and the citizens' wealth.

Hume showed this conclusion to be false in view of two points. First, in the absence of manufactures that provided commodities to be exchanged with the agricultural surplus there was no incentive to improve the arts of agriculture. Second, in a dearth the army could not be maintained in good order, and so must either engage in conquest or disband. Taking these two points together, the more appropriate perspective was to see manufactures as increasing the power of the state by storing labour that could be claimed without depriving the population of its subsistence. An opulent state would also possess an abundant stock of useful goods: a 'public granary of corn, a storehouse of cloth, a magazine of arms; all these must be allowed real riches and strength in any state'. The relevant metaphor was the camp: not a Spartan camp devoid of luxuries and tightly rationed, but one 'loaded with a superfluous retinue' so that 'the provisions flow in proportionably larger' as a result. In short, wealth and power were not separable phenomena, and so their analysis was conjoint.

An elaboration of this theme in relation to colonial trade is found in the anonymous An Account of the Constitution and Present State of Great Britain. The links between trade and strength underwrote the claim that on trade 'in a great measure depends our security'. A specific trade's usefulness for the nation could be assessed using the following maxims: a nation's strength consisted in the number of its inhabitants employed in manufacturing; the balance of trade between two states would be paid in bullion; manufacturing exports made solely of British materials were to be especially prized; the re-export and carrying trades were advantageous because they employed sailors and shipping; the importation of consumable luxuries using bullion was harmful. With these maxims in mind, it was possible for the statesman to assess how Britain's trade interest was served by its commerce with its colonies and other nations. Trade with the American colonies, for example, was judged to be the most important because the colonies received British manufactures in exchange for raw produce that Britain both consumed and re-exported, and hence the colonies were 'a source of wealth and strength' for Britain. Yet colonies were not always beneficial in this way. Spain's colonies were seen to have drained population from the homeland and left its land uncultivated. Ireland exported wool to France – enabling competition with England in that most important trade – and supplied victuals to French ships cheaper than to Britain's. In sum, it 'seems as if Ireland was held for the service of France'. The most harmful settlements, however, were those in East India, where few manufactured goods and large quantities of bullion were sent in exchange for luxuries. In relation to trade with other sovereign nations, the author acknowledged that the balance of the Baltic trade was against Britain, but this trade could still be justified because the goods received were principally naval stores and therefore essential to national security. This fact further required Britain to moderate the balance of power between Denmark, Sweden, and Russia, for if any of these nations were to control the Baltic they would be in a position to damage Britain's naval power. This security risk provided a powerful argument for cultivating the trade in naval stores with the colonies through their 'proper management', and then Britain would need not 'suffer herself to be dependent'.

The Dutch, continued the anonymous author, represented a more complicated case, not least because they pursued an 'imaginary interest' contrary to their own and Britain's, owing to corruption from French gold and the factious structure of their government. Britain was said to perceive its interest on this question in an equally imperfect fashion due to the distorting effects of jealousy of trade. A second complexity was the failure of Britain's negotiators to achieve treaties that would prohibit the Dutch from carrying French manufactures during war-time. The combined influences of corrupt and false interests, and the failure to regulate Dutch neutrality, had led to a lamentable state of affairs where British and Dutch interests were misaligned during conflict, which in turn made it exceedingly difficult to humble France in war, even when its fleets were blockaded and her shipping destroyed. Looking past these obstacles to Britain's real interests, it was clear that the Dutch had to be maintained as a free state who would guard the balance of power from France's deadly ambitions, and since the balance of trade favoured Britain this trade did not stand in need of urgent attention.

When the discussion shifted from the trade interest to Britain's security interest, France featured large once again: by aspiring to universal monarchy France obliged Britain to adopt a directly opposed interest. In fact, given the recent additions to France's commerce and dominions, it was necessary to take immediate action to preserve Europe's safety. Such action ultimately amounted to strengthening alliances with protestant powers on the continent through subsidies and commerce. But two reserve strategies were also indicated. First, if the Dutch continued to be 'obstinate, inactive, and blind to their own interest' in regards to halting France, then it 'may be prudent in Great Britain to strengthen and create as it were other maritime powers', such as Denmark, Sweden, and Russia, who through commercial treaties and Britain's assistance could be made to 'cut a greater figure on the ocean'. The second strategy, which would be occasioned by the failure of the first, was to pursue an isolationist approach in which resources would not be expended on the continent but solely on securing Britain's naval power and trade. Thus, the management of trade emerges in this text emerges as an exceedingly complicated art reliant on an expansive array of security calculations, strategies, and actions.

A final example of the statesman's simultaneous management of trade and security comes from Thomas Mortimer's teaching text that he recommended for future statesmen, The Elements of Commerce, Politics and Finances (1772). Mortimer also laid it down as a maxim that commerce was essential to security. A nation without commerce would be 'ever at the mercy of a powerful neighbour' because 'it is commerce which gives strength and security to a nation, furnishing it with a maritime power' by providing a 'nursery for seamen' and employing a vast number of ships. Commerce also underwrote the population's subsistence and a supply of bullion, all of which were needed to block 'the designs of an ambitious neighbour'. It followed that commerce needed to be carefully superintended, and the first 'great skill of a statesman' was to ensure a stock of food and clothing for the population, and inhibiting the export of either before this was achieved.

With this stipulation in place, Mortimer then turned to set out the 'mercantile maxims' that should guide the management of exports, and again these were of a familiar type: exports of manufactured goods were to be prized, those carried in English shipping were especially valuable, exports to distant locations were superior to exports to more proximate ports because the profits and number of seamen were greater, bounties could be used to encourage exports, the export of bullion was not a public nuisance because the balance of trade operated through goods and not gold and silver, plus paper money meant the circulation only needed an 'eight part' of the coin formerly required for its movement. A converse set of maxims to govern imports was then provided, and while they were more detailed and sophisticated than our previous examples, these maxims still set out common ideas. But the seventh maxim is worth noting: the importation of rival manufactured goods from countries that did not receive any exports was 'highly impolitic'; so much so, in fact, that the consumers of French lace should be considered 'petty traitors, and punished severely' because 'they enrich our natural rivals'. While this may strike today's reader as exactly the type of thinking that Smith revealed as flawed, such a conclusion appears hasty in view of the role of 'trading with the enemy' legislation throughout the twentieth century. Putting that issue aside, Mortimer's maxim was plainly an example of geo-strategic concerns inflecting the management of trade, yet presented without using the language of interest.

Mortimer did, however, couch his treatment of the colonial trade in the language of interest. Britain's naval and commercial superiority was said to rest on its colonial possessions, and this pre-eminence would be endangered if the American colonies turned their labours from raw produce to manufactured goods, forsaking their own 'true interest' in the process. Only 'folly' or 'blind prejudice and partiality' on the part of the statesman would allow such a situation to arise, since it would force Britain to acquire its raw materials and naval stores from other, non-dependent, sources. Mortimer described a 'glorious union of commercial interests' between the colonies and Britain as a worthy goal that was well within the grasp of a 'dispassionate, able statesman'. Mortimer's optimism was obviously misplaced in hindsight, but it nevertheless reveals how the statesman was charged with a dual task: to manage what Jacob Viner called 'power and plenty' simultaneously, with the aid of maxims, calculations, knowledge of trade, and an understanding of the interests of rival states. And the crucial index of the statesman's mastery of this task was the ability to distinguish between beneficial and harmful trades, and to then act on them through duties, prohibitions, tax treatment and so on.

It has been necessary to illustrate the richness of this military-mercantile advice at length in order to make clear the extent of the caricature Smith perpetuated by reducing it to two great errors: a confusion of money and wealth and the belief that a war chest was needed to finance armies. A fairer claim would be that the military importance of trade was taken so seriously that trade and power were analyzed simultaneously, with emphasis given to the latter. Smith's decision to analyze wealth independently of power would have rendered it unusable by a statesman were it not hedged in with concessions and exceptions for the military reality of contemporary European politics. The most well-known example is Smith's statement that France and Britain would ideally enjoy a free trade with one another, but because they are 'neighbours, they are necessarily enemies, and the wealth and power of each becomes, upon that account, more formidable to the other'. Indeed, Smith co-opted the language of interest by describing free trade as the 'real interest' of both nations, but one obscured by 'modern maxims of foreign commerce'. By this phrase Smith might be taken to mean maxims of exactly the sort that were set out above. If this aspect of Smith's attack on the 'mercantile system' can be considered largely rhetorical in character, then the crucial analytical accompaniment is his flattening of the category of wealth, possibly in response to Physiocratic thinking. It was with this move that Smith separated the analysis of wealth from the analysis of strength, and thus created the opportunity for his casuistry.

2. The Separation of Strength and Wealth
Smith's decisive move is seen early in Wealth of Nations, in the first paragraph of the Introduction, in fact, where wealth is defined in terms of a homogeneous category:
The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consists always, either in the immediate produce of that labour, or in what is purchased with that produce from other nations.
The nation's annual labour constitutes its wealth, which are now necessaries and conveniences, not the elements of strength, such as men, money, and munitions. The annual labour is then divided into two categories, productive and unproductive. Smith's definition of productive labour was not stable, but for purposes here this is not terribly important, as it is clear enough that productive labour is good because it leads to capital accumulation while unproductive labour is not because it is merely expense. For this reason, the proportion between productive and unproductive labour is one of the two great factors that condition the size of the annual labour in every country. The other and more significant factor that determines the wealth of nations is the 'skill, dexterity, and judgement' with which the labour of a nation is applied, which was primarily a function of the division of labour. The division of labour is, in turn, subjected to two limitations – limited opportunities for its operation in agriculture, and the extent of the market.

When the two factors just considered are held constant – the ratio of productive to unproductive labour, and the division of labour – the wealth of nations is then determined by two more concerns. The first is the subject of Book II, the allocation of capital between what we would call sectors of the economy. The second determinant of national wealth is dealt with in Book III, the policy of nations that influence what we might call the sectoral evolution of the economy over time. It is the categories developed in Book II that drive the attack on the 'mercantile system' in Book IV, as they make it possible to assess a particular trade with reference to the quantity of productive labour that it supports, without reference to military and strategic factors that were seen to have been of keen interest for earlier writers and that combined to test the statesman's political and administrative dexterity.

Smith's analysis identified four general uses of capital and ranked them according to how much they contributed to national wealth. Capital directed to mining and agriculture supported the most productive labour and was therefore evaluated as the most beneficial from the national point of view. Manufacturing ranked second, the wholesale trade third, and the retail trade came last because it supported the smallest quantity of productive labour: 'The retailer himself is the only productive labourer whom it immediately employs'. It should be clear that this is an entirely novel mode for assessing a given trade, and makes no reference to state power. Further, it has become possible to evaluate negatively in economic terms those trades that add to the military might of the state.

This is exactly what Smith did, describing military officers and state officials as unproductive. Equally revealing was Smith's analysis of the sub-components of the wholesale trade: the home trade saw the produce of one part of a nation sold in another part of the same nation, the foreign trade of consumption saw foreign goods purchased for home consumption, and the carrying trade referred to one nation transporting goods that are both produced and sold in foreign nations. In Smith's example of home trade, Scotch manufactures are sent to London and return with English manufactures. In this case, the trade 'replaces, by every such operation, two British capitals'. But in a carrying trade that were to see British shipping take Polish corn to Portugal and return to Poland with Portuguese wine, two capitals are replaced but neither would be British. The carrying trade, routinely appraised as crucial for Britain's power because it acted as a nursery for seamen and ensured a large mercantile fleet, has been placed by Smith at the very bottom of the hierarchy of capital employments. Smith immediately drew the implication of his analysis for state power:
The riches, and so far as power depends upon riches, the power of every country, must always be in proportion to the value of its annual produce, the fund from which all taxes must ultimately be paid.
If we compare this with typical formulations of the strength-wealth nexus, such as Law's above, then Smith's account represents a radical innovation. For now strength is a function of tax, and strength and wealth are no longer immanent in one another, no longer crisscrossing one another at diverse points, and calculating how to maximize their interrelations by identifying special trades is no longer the core of the statesman's duty. This is Smith's real and silent assault on the 'mercantile system', not his supposed refutation of its two 'errors'.

For Smith's central purpose in Book IV was to show that the mercantile system's endless laws were mistaken because the regulation of trade could not increase its total level, only divert it into a different (and possibly less beneficial) direction. Thus, it was only 'folly and presumption' that allowed a statesman to think that he either needed to or could red55irect capital to national advantage. The prudent approach for nations was simply to mimic the master of a family, who did not 'make at home what it will cost him more to make than to buy.' This maxim was translated into the national context as follows:
If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.
Yet all these argumentation is silent regarding the core of earlier analysis – the implications of a given pattern of trade for national power.

To see this point, it is worth comparing Smith's analysis with Hume's arguments, discussed above. First, for Smith, wealth was a nation's annual labour: all its necessaries and conveniences and not just those that augmented the power of a state. By contrast, Hume emphasized the abundance of those goods that enabled a state to 'hold out' when at war – corn, cloth, arms, and so on, and the stock of labour that could be conscripted. Second, Smith made a decisive distinction between productive and unproductive labour. As we have seen, this distinction related to the accumulation of wealth, and admitted no direct entry point for issues of strength, while Hume valued labour as a generalized source of circulation and as a store of fighting men. Third, and consequently, Smith's general conception of labour provided no basis for identifying 'privileged sectors' comparable to Hume's manufactures, for Smith's analysis of annual labour only distinguished between one employment of capital or another on the basis of whether it sustained a greater or lesser quantity of productive labour. Smith's argumentative apparatus redirected attention to wealth alone, and this made it possible for him to charge the statesman with '[b]enevolent inaction' regarding the process of moving capital between trades. As a general principle this was clear enough, but what of the statesman's other duties, especially the task of securing defence and justice? As we will see, these duties overrode the general principle of inaction regarding wealth, so it is necessary to now bring to view a fuller picture of the statesman's office and the sources of these higher duties.

3. The Statesman and Smith's Free Trade Casuistry
As we have seen, the 'statesman' was a routine addressee for advice relating to the management of national wealth. The figure of the statesman functions in Smith's text as both the recipient of counsel regarding state administration and the projected agent who will act on counsel. The statesman thus provided a uniting trope for a number of topics of counsel and likely inhibited intellectual boundaries from forming because administrative action in diverse domains was conceived as conducted by the same figure whose virtues and capacities could be configured as needed. By portraying the statesman's interventions as ignorant and harmful Smith was repudiating the counsel of Sir James Steuart, whose Inquiry into the Principles of Political Oeconomy (1767) Smith understood himself to have confuted without naming. Steuart treated the state as a household in which the population were children who needed the unceasing attention and direction of a statesman-father; benevolent and constant action was Steuart's advice. Despite offering opposing counsel, Steuart also delivered his in the form of general principles: 'My work resembles the formation of the pure colours for painting, it is the artist's business to mix them'. As regards the security-wealth nexus, Steuart developed a competitive image of Europe's states:
The trading nations of Europe represent a fleet of ships, every one striving who shall get first to a certain port. The statesman of each is the master. The same wind blows upon all; and this wind is the principle of self-interest, which engages every consumer to seek the cheapest and the best market. No trade wind can be more general, or more constant than this; the natural advantages of each country represent the degree of goodness of each vessel; but the master who sails his ship with the greatest dexterity, and he who can lay his rivals under the lee of his sails, will, ceteris paribus, undoubtedly get before them, and maintain his advantage.

As we have seen, Smith resisted this competitive framing in favour of describing free trade as the real interest of Britain, and this innovation was dependent on isolating wealth as a phenomenon.

Yet nurturing the nation's wealth was only the third most pressing task for the statesman, after seeing to defence and justice, and these higher duties account for the variations that Smith made to his message in Wealth of Nations: the statesman could not improve upon the natural allocation of capital with respect to wealth accumulation. The governing intellectual infrastructure of Wealth of Nations was Smith's idiosyncratic form of natural jurisprudence, organized around the sympathetic reactions of the impartial spectator and their historical development. In Smith's schema of natural law, the laws of 'police' are inferior to defence and justice. The priority of defence is straightforward, since some degree of internal and external security is a precondition for exercising government. Justice is anchored in the viewpoint of the impartial spectator, whose sympathetic reactions to injustice are so strong and universal that they can be expressed as general laws, and exceptions to justice are only made in the name of defence. By contrast, those laws that are made in pursuit of cheap and plentiful commodities, public security, and cleanliness are made on a piecemeal basis and with respect to convenience. It is obviously the first element of police with which Wealth of Nations primarily deals, with Book V turning attention to the costs of government and defence, thus representing a dense intersection of defence, justice, and police.

This hierarchical ordering of the statesman's tasks is an instance of what Conal Condren has described as 'presumptive casuistry'. It refers to those situations where the nature of the office was not in dispute, only the tasks and values to be dispensed by the person holding it, in opposition to 'modal casuistry', where multiple offices or personae were in conflict. Where modal casuistry entered a decided decline along with the presupposition of office in the eighteenth century, presumptive casuistry fared better, and we can see Smith's statesman as a prime example of the survival of casuistical reasoning under certain conditions. In the case of Smith, the settled office was the statesman or legislator, and we saw that it was imagined by earlier writers as the ordering force in a polity. As Tribe argued, the dislocating force of Smith's arguments for these earlier approaches to political œconomy derived from the fact that order is conceived as naturally occurring through the interaction of sympathetic moral agents.

In the cases of Mortimer and Hume, for example, arguments regarding commerce and state power only identified useful segments of the population – such as sailors and manufacturing labour – from the point of view of their potential disposal for state power and did not describe them as possessing moral agency of the kind at the heart of Wealth of Nations. Because Smith's polity did have its own self-regulating properties, one of the statesman's key virtues was the ability to forebear from clumsily intervening to ill effect. Smith developed this theme in his revisions to the sixth edition of The Theory of Moral Sentiments, written in the winter of 1789, after the fall of the Bastille in July and so possibly with the French Revolution in mind. The new material extends the existing treatment of the 'spirit of system' as a malady, one that corrupts the statesman's officeholding by inflaming his public spirit to the point of 'madness and fanataticism', such that he drastically renovates a polity in the pursuit of an ideal system and exceeds the tolerance of the nation's people and institutions for innovation. The principles of natural jurisprudence are the best defence against reformist passion, since they direct the statesman to privilege internal and external security, then justice (which protects property above all), and to only then look to general prosperity.

With this sketch of the statesman's office in mind, it is now time to turn to the exceptions to a policy of free trade that Smith countenanced. The crucial discussion of exceptions occurs in chapter 2 of Book IV. Having made the case against laying restraints on importing foreign goods simply because they can be produced at home, Smith then proceeded to set out the four 'cases' where there were grounds for imposing restraints and violating the general principle of free trade, the principle that the wise statesman does not produce at home what it will cost him more to make than to purchase from another. The first exception arises, as we would now expect, in view of the statesman's duty to prioritize defence. Domestic industry may be encouraged by the use of restraints when 'some particular sort of industry is necessary for the defence of the country'. We saw that this maxim was at the heart of earlier counsel to the statesman, now relegated to an exception. Smith continued:
The defence of Great Britain, for example, depends very much upon the number of its sailors and shipping. The act of navigation, therefore, very properly endeavours to give the sailors and shipping of Great Britain the monopoly of the trade of their own country, in some cases, by absolute prohibitions, and in others by heavy burdens upon the shipping of foreign countries.
Smith claimed that the inspiration for the Navigation Acts was national animosity towards the Dutch, an improper motivation for the statesman, but through a happy coincidence this policy was exactly what 'deliberate wisdom' would have recommended in the situation – a 'diminution of the naval power of Holland, the only naval power which could endanger the security of England'. This is one of the moments in Wealth of Nations when Smith came close to conceding the validity of the analysis of state interests, but here it is only admitted for the purpose of historical reconstruction, not application in the present. The result is that Smith does not have general advice to give to the statesman regarding how to manage the balance of power and the threat of rival states, and certainly does not offer the tools for generating the detailed counsel that had been offered since at least the late seventeenth century. Smith's only guidance is to restate the relative priority of defence and opulence: 'defence […] is of much more importance than opulence and so 'the act of navigation is, perhaps, the wisest of all the commercial regulations of England'. Smith's principles can bestow a retrospective sanction, but they are too general to have generated the recommendation on their own.

The second case where restraints are justified is when domestic produce bears a tax levied by the national government, such that levying a tax on imported goods that compete for the domestic market has the effect of levelling the field. This instance is less interesting for the argument at hand because the exception derives its warrant not from higher principles as identified by jurisprudence but from a technical argument developed within The Wealth of Nations. In brief, a tax affects profits and so the allocation of capital. The effect of placing an equivalent tax on imported goods is to 'leave the competition between foreign and domestick industry […] as nearly as possible upon the same footing'. Hence, this is not an exception to the principle of free trade but an affirmation of that principle, understood as the premise that capital should be allowed to find its natural course.

The same point holds for the third exception, which related to retaliatory restraints on the importation of a nation's goods when that selling nation had first taken similar actions. Retaliation must be aimed at achieving a mutual repeal of restraints because the 'recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time'. In saying so Smith was approaching the limits of political œconomy because such judgements were not made on the basis of general principles but with reference to specific circumstances, such as those surrounding the politics of international trade negotiations at a given moment. The task was essentially one of judging the effects of retaliation and the prospect that they might entice the other party into successful negotiations; it required 'deliberation'. As the work was not something for which the statesman was well-equipped – understood as the bearer of the general principles of state administration – Smith suggested that it would fall to another less exalted office, the politician, 'whose councils are directed by the momentary fluctuations of affairs'.

The final exception related to the return to free trade from a situation of protection, especially where domestic manufactures had grown to employ a significant number of people as a result of being sheltered from competition. Smith wrote that '[h]umanity may in this case require that the freedom of trade should be restored only by slow gradations'. Concern ought to be shown for two groups. The first was employees, who would lose their means of subsistence, although they would likely be reabsorbed into the workforce. The second group was manufacturers, who would lose some of their fixed capital if the change were sudden, and this point led Smith to claim that an 'equitable regard' for the manufacturer's interests would require that free trade be introduced into protected employments only slowly and following sufficient warning. As with retaliatory restraints, this case was a matter for deliberation and required fine-grained judgement in execution. But it was unlike retaliatory restraints in that what was at issue was an exception to free trade in the name of a rival duty for the statesman – unfolding laws that accord with humanity and equity, about which something should be said.

Smith defined humanity in The Theory of Moral Sentiments as heightened fellow-feeling, as deeply participating in the sentiments of another person whether they were happy or sad. Smith held that it was a feminine virtue because it did not require self-denial or an unusual sense of propriety (as with the contrasting masculine virtue of generosity), but simply that one follow the promptings of sympathy. It was crucial, however, as a check on the statesman's reformist impulses because humanity and benevolence would allow the statesman to sympathetically enter into the situation of those who would suffer from the effects of his reforms, thus moderating his actions even if they were directed at removing a genuine abuse. Humanity aided the statesman in his aspiration for the wisdom of Solon, who only introduced the best laws that the people could bear. As for equity, if we turn to Smith's lectures on jurisprudence, then it seems that Smith invoked equity in relation to diverse laws that did not align with the response of the impartial spectator because they lacked fairness. Feudal Lords at times attempted to treat wild animals on their land as their property, but the 'rules of equity' declared that they must always be common property. The ban on exporting wool upon pain of death contradicted 'naturall equity' and so juries would not convict people for an offence in view of the disproportionate penalty. While civil law in most countries allowed that the nominal value of a debt was the price to be paid, even if the currency has been devalued, equity required that the real value of the debt and not the nominal value should be repaid. In ancient Rome libel was punished by death, but later the punishments were reduced to penalties better 'suited to naturall equity'. Taken together, humanity and equity complicated the task of introducing free trade to industries that had formerly received protection by revealing the presence of justice considerations. While Smith's argument was that the practical measures that sought to address these considerations would be messy and so not tractable in terms of general principles, it was nevertheless the case that identifying the need for such measures belonged to the statesman's duties to perform in the name of justice.

4. Conclusion: The Unity of the Statesman's Office
With this new account of Smith's exceptions to free trade in mind, it is now possible to set out the implications of restoring their casuistical character to view. The first relates to the inadequacy of the phrase 'free trade' to describe Smith's counsel, an old problem arising from the reception history of Wealth of Nations. In Britain, the new science of political economy as developed by Thomas Robert Malthus and David Ricardo narrated its own progress using an improvised historiography organized around the notion of doctrinal progress, in which Smith was portrayed as a watershed by sweeping away the errors of the mercantile system while inaugurating a few of his own, which Malthus and Ricardo then set about remedying. The effect was that Books I and II of Wealth of Nations were typically read in isolation by extracting doctrinal statements from their moorings in natural jurisprudence, allowing them to be combined with emerging liberal doctrines. Smith was rejected in the United States and Germany as a spokesperson for British hegemony because free trade was perceived as a policy that would stifle the development of manufacturing in those nations by making Britain's early lead unassailable. In both settings Smith was construed as a free trade ideologue in today's sense – where 'free trade' conveys a stand-alone doctrinal position. But, as suggested, we take for granted a division of intellectual labour between economic, security and legal discourses and the experts by whom they are spoken. By contrast, Smith's 'free trade' was a 'police' recommendation based on technical arguments regarding capital allocation made in relation to an objective – wealth – that was subordinate to other state objectives embedded in a set of principles attached to a presumed office of state administration. As a result, Smith's expression 'free trade' is rather like Machiavelli's virtù – to express its correct meaning we must offer an extended periphrasis because we do not possess a conceptual equivalent.

This conceptual disjunction is a function of Smith's mode of reasoning in which the statesman was projected as a unifying site of governmental reason. That this is a difficult notion to convey is evidenced by Donald Winch's self-conscious yet still risky borrowing from twentieth-century economics to describe Smith's statesman as resigned to 'second-best' alternatives, a notion developed in riposte to general equilibrium theory. Winch's point was that Smith's 'style of thinking' was not the same as today's economists because he did not search for optimal solutions. A better description is to say that the key discursive function of Smith's statesman was to provide a unified space for judgement regarding conflicting goals by making exceptions to general rules. The fact that the statesman faded as an addressee for political economy shortly after Smith's death makes it exceedingly difficult to relate Smith's position on free trade with what we think today, or even with Ricardo's account of comparative advantage published a few decades later. In other words, the myth of Smith the free trade economist should be rejected not only because of the moral sources of his thought, and because of his deviations from this doctrine, but also, and far more seriously, because his mode of reasoning is now alien to us.

Consider how David Ricardo projected the task of legislating free trade onto a different site of reasoning, 'the legislature', whose task was to simply absorb correct science on the topic. When it came to security concerns around the danger of Britain being reliant on foreign nations for the supply of its subsistence – in the context of more than twenty years of war with France in which a blockade was attempted – Ricardo simply disparaged the arguments of his rivals. He asked if it would be wise to legislate 'with the view of preventing an evil which might never occur; and to ward off a most improbable danger, sacrifice annually a revenue of some millions?' No longer tethered to the statesman and his natural duties, Ricardian political economy created the same unclear and changeable links between political and economic goals that we experience today.

The final effect of the reconstruction attempted here is to more clearly delineate the historiographical dangers created by Smith's 'mercantile system', carried on down to history writing today as 'mercantilism'. As indicated above, the crucial point is that Smith was prepared to separate the analysis of strength and wealth while his predecessors almost always did not; this separation caused a complete reorganization of the argumentative conventions relating to trade and state power. Smith did not acknowledge this shift in the ground of argument when he came to describe the views of his opponents, such that misrepresentation was the inevitable result. In this respect, the recent attempt to 'reimagine' must appear curious because we are asked to reimagine a polemic. The alternative is to write the history of this construction as a component of the history of the historiography of political and economic thought, at the same time as we try and develop our own accounts of earlier literatures.

In relation to this latter task, we have seen that writers such as Mortimer and Hume did not mobilize a generic category equivalent to Smith's 'productive labour' but focused their investigations on a heterogeneous mix of elements. It is not inaccurate to say that writers before Smith believed in the 'long-run harmony' between power and plenty as goals of state administration, Jacob Viner's counter assertion to Eli Heckscher's treatment of mercantilism as focused on power, but neither is it sufficiently detailed to act as a fair description. Hume, for example, treated manufactures as adding to state power because they stood as a store of men who could be conscripted, while Smith understood manufactures as adding to state power by being productive labour that returned a profit that might bear a greater tax burden. Smith's categories, in other words, operated at a higher level of abstraction, and they did largely rely on a presumed long-run harmony between the tax base and state power. Even the best commentators have fallen into Smith's trap by allowing his redescription of prior forms of argument to influence their accounts. Istvan Hont, for example, was cautious when using the word 'mercantilism', but he nevertheless followed Smith in portraying earlier writers as defending the Navigation Acts with reference to 'economic advantage', treating Smith as defending the same acts for reasons of 'national security' alone, Smith analysis purportedly having revealed the economic case to be erroneous. Yet, as shown, a clear split between 'national security' and 'economic advantage' is absent in earlier writers because making such a separation is dependent on a category such as Smith's, which can isolate and homogenize wealth relative to power. That Smith used a category meeting these requirements has made him appear similar enough to us, distracting attention from the strangeness of the statesman's office.

























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