Cultural and business traditions
While for a long time major Scottish figures like Hume and Smith were considered isolated geniuses, it is now widely accepted that they were part of a more general phenomenon with a national character, the Scottish enlightenment (Campbell and Skinner, 1982; Broadie, 1990; Buchan, 2003), and that their economic thinking was a product of the particular political- economic environment.
The Scottish enlightenment philosophy tradition, of which the Scottish political economy tradition was a product, is to be distinguished from other national enlightenment traditions. While, following Descartes, French enlightenment philosophy emphasised the sufficiency of deductive reason and, following Bacon and Newton, the English enlightenment emphasised empiricism, the Scottish enlightenment pursued a path which combined reason and evidence within a theory of human nature. This philosophical approach in turn was influenced by wider cultural and economic conditions in Scotland.The cultural and economic conditions for the flowering of economic thought in Scotland in the eighteenth century were established at least as early as the seventeenth century. The court had moved to London when James VI also became James I of England in 1603; the removal of the political centre to London was cemented in 1707 with the Union of the Parliaments. The focus for public debate therefore had shifted away from politics and more towards issues concerning religion and moral issues more widely.
The context and character of such debate was coloured by the continuing presence of distinctive Scottish institutions: the Church of Scotland which is non-established, the legal system based on Roman law, and a national education system built on a foundation of general literacy. The aim to maximise access to good education meant that higher education was made available to students from all parts of the country at an early age.
The structured approach to higher education played a crucial part in laying the foundations both for Scottish inventiveness in practical matters and for the development of Scottish enlightenment philosophy (Dow, Dow and Hutton, 1997). Disciplines were taught from a historical perspective, providing exemplars of systems of thought which had been suited to particular historical circumstances rather than one ‘best’ system. Further, the degree was structured such that students would be exposed at the start to moral philosophy, a subject within which topical issues would be debated.The content of Scottish philosophy was subject to particular influence from continental Europe. Cultural and educational links with the continent were strong as a result of long-standing political forces, notably conflict with England. In particular, Pufendorf’s application of natural law philosophy to economic questions, introduced to Scotland by Gershom Carmichael, was to prove highly influential in both the philosophy and the economics which developed during the enlightenment period. This continental influence on Scottish philosophy continued well into the eighteenth century, strengthened by extended stays in France on the part of Hume, Smith and Sir James Steuart. There was continuity also in the distinctiveness of non-governmental institutions in Scotland.
In the pre-enlightenment period, Scotland had been a relatively poor country, although already employing technical improvements. The scope for trade was restricted by England, but Scotland had long-standing trading and cultural ties with continental Europe. The eighteenth century saw not only a loss of government and the loss of a separate currency in 1707, but also a number of important socio-economic developments resulting from what we might encapsulate with the term ‘commercialisation’: the emergence of banking from 1695, the opening up of trade with England and English colonies, agricultural improvements and increasing migration into towns.
There was further the cultural, economic and demographic upheaval associated first with the 1715 and 1745 Jacobite rebellions and then with the consequent suppression of Highland culture and economic organisation.These developments brought to the fore a number of important questions. A particular focus for moral philosophy was the moral challenge of commercialisation. But further, there were practical issues surrounding the problem of promoting Highland improvement. This, together with issues related to the opening up of the New World and comparisons with the English economy, posed the ‘rich-country poor-country problem’: how to understand differences in economic advancement. Indeed it can be argued that the content not only of ideas on economic development, but also that of moral philosophy, were influenced profoundly by the history of Scottish culture and economic circumstances surrounding Highland-Lowland differences (see Dow, 2009a). In the absence of a parliament, civic humanism encouraged the formation of societies to address particular issues, such as the Honourable Society for Improvement in the Knowledge of Agriculture, founded in 1723, and its sequential successors, the Select Society, and the Edinburgh Society for Encouraging Arts, Sciences, Manufactures, and Agriculture in Scotland, whose membership included Hume and Smith.
An education system drawing more on Roman than Greek texts and covering a range of approaches which had been applied to different historical contexts was well-suited to addressing practical problems, leading to an impressive array of technical innovations in the eighteenth century. Indeed the epistemology underlying the structuring of education in Scotland arguably also paved the way for innovations in moral philosophy and its offshoots, including economics. In the spirit of this interdependence between ideas and real experience, Scottish enlightenment philosophy developed in such a way as to underpin these scientific advances with a new general theory of knowledge based on a science of human nature.
The influence of continental philosophy on Hume (1739—40) encouraged him to grapple with the rationalism of the French enlightenment, only to conclude that reason was an insufficient foundation for knowledge. But evidence (‘experience’) was also inadequate given the problem of induction: since real processes are too complex for human understanding, there can be no assurance that past experience is a reliable guide to the future. Knowledge, rather, is built from social conventions with the aid of imagination, but any such knowledge is inevitably partial and open to challenge by experience. Hume and Smith thus employed the Scottish interpretation of Newton’s experimental methodology, which was to draw inferences from experience which would be developed into theories and confronted with further experience. Unlike the axiomatic approach of Descartes, this was a method for deriving general principles which were provisional in the face of further evidence and likely to require adaptation to different contexts.This science of human nature has had a lasting legacy in that it spawned a range of disciplines, such as psychology and sociology, in addition to economics. As far as Scottish philosophy itself is concerned, there was a complex range of currents, but there was sufficient continuity and commonality for a national enlightenment tradition to be identified in the modern literature (see Broadie, 1990). But in the post-enlightenment period, Hume in particular was interpreted very differently, both as a sceptic destructive of science and as the father of logical positivism. It could be argued, therefore, that Scottish enlightenment philosophy had its greatest lasting impact only through what many now regard as misinterpretation (Dow, 2002b).
Scottish philosophy was perpetuated within Scotland after the enlightenment through the continuing emphasis until the late twentieth century on history, moral philosophy and logic and metaphysics in higher education (in spite of strong arguments from Oxford in the early nineteenth century against the teaching of philosophy to undergraduates). Other Scottish institutions and culture also continued to be distinctive, although there has been a gradual process of homogenisation with the rest of the UK. The Scottish economy continued to flourish through trade and heavy industry until the early twentieth century, but then lost ground to the rest of the UK, only reviving through diversification in recent decades. The centrifugal political draw of Westminster (now reversed somewhat by the re-establishment of the Scottish parliament in 1999) has been mirrored in other areas (notably industry and academia), encouraging leaders in these fields to locate in or near London. This has reinforced the marginalisation in the UK of the traditional Scottish form of civic humanism and its philosophical underpinning.