James Steuart was a famous British economist. In 1767, he published his work “Research on Principles of Political Economy” which is considered to be one of the first systematic scientific works in the field of moderate mercantilism. In fact, James Steuart was one of the leading representatives of late mercantilism. He saw the source of wealth in the active balance of foreign trade. His contemporary Adam Smith supported some of the Steuart’s views, but he maintained highlighted other stages of economics origin. James Steuart entered the history as a prominent economist because he was the author of the fundamental mercantilist theories of the economic development, functions of money, and foreign trade regulation.
Sir James Steuart was born in Edinburgh in 1712, in the noble Scottish family. His father was Solicitor General for Scotland during the reign of Queen Anne and King George I. In fact, Steuart studied law at Edinburgh University. After graduation, he traveled Europe and became a supporter of the Stuart dynasty. Later, he took part in the uprising of the Jacobites who were trying to free Scotland from the power of England. After the defeat of the uprising, he had to remain abroad. Having returned to Scotland, Steuart spent the rest of his life in research of work. In the year of 1805his son published the collection of Steuart’s works . The main work of James Steuart is “An Inquiry into the Principles of Political Economy” which was published in 1767. It was one of the first works with a systematic exposition of the political economy. The merit of the author was the systematization of numerous works of the mercantilist ideas. Steuart had published his work nine years before the “Wealth of Nations” by Adam Smith. After the Adam Smith’s work, the word “mercantilism” became the abusive notion in the circles of scholars. Besides, Smith completely ignored the Steuart’s works and avoided mentioning his name, even in places where the ideas of Smith were the direct denial of Steuart’s contribution. As a result, Steuart ‘s book was devoted to complete oblivion, and not a single article of the English journals had a reference to “An Inquiry into the Principles of Political Economy.” However, at the end of the XIX century, Marx drew attention to this book, and the name of Steuart gradually acquired some weight in the German scientific community. In particular, his historical vision of economy and the idea of economic development by the state brought him recognition. Later, he was declared as the predecessor of the “controlled economy” and the concept of planning for economic development.
James Steuart defended mercantilism by expanding its number of new provisions. He tried to develop a system of political economy. The basic principle of his research was the central dogma of mercantilism. He thought that only foreign trade with favorable balance is a source of wealth. Besides, he could not find a source of income outside the scope of the exchange. In fact, Marx saw the achievement of Steuart in his deriving the function of money from commodity circulation. He argued that Steuart revealed substantial certainty of money forms and the general laws of currency. Additionally, Steuart developed the various functions of money from different points of the commodity exchange. He showed that commodity prices determine the amount of money in circulation. Furthermore , Steuart argued that under constant demand in the country, the emergence of the additional quantity of money affected prices similarly as if gold and silver were in the mines. He noticed that the additional number of coins would go into the private possession or would be melted down for utensils.
Steuart’s opinion of the problem of periodization of economic development was very similar to Adam Smith ‘s views. This fact explains that they were both Scots and the formation of their views had been influenced by the same teachers and mentors. Steuart and Smith entailed the same stages of economic development. Firstly, they noticed the period of hunting and shepherding. Secondly, they pointed out the period of trading, when commodity economy had replaced the natural exchange. The next stage was the emergence and development of cities and the formation of the national market. The only difference in their views was that, according to Smith, this whole process was spontaneous. In contrast, Steuart noticed that this process was controlled by the state. In fact, Steuart provided several arguments to support his position. He noticed that government intervention in the development of trade and industry was growing. Substantiating the need for state regulation of economic life, Steuart compared the mechanism of market competition to clockwork, which needed an experienced master who was always ready to adjust it. In contrast, Smith concluded that there were international and inevitable economic laws in the world. These laws were fubnctioning regardless of the desire of people and often against their will; therefore, periodization was a spontaneous process. All in all, a modern society proved that a government was controlling both economic ties and trade relations. Therefore, Steuart’s arguments were more conclusive taking into account the present realities.
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Consequently, James Steuart was a prominent economist, philosopher, and one of the leading representatives of mercantilism. His most important work was “An Inquiry into the Principles of Political Economy.” In fact, this material had the first systematic exposition of the political economy. James Steuart was convinced that only foreign trade with effective trade balance was a source of prosperity and growth. Moreover, he noticed that the commodity prices determine the amount of money circulating in the economy. James Steuart had similar views to those of another economist Adam Smith. However, their opinions differed on periodization of economic development. Generally, Steuart’s theory has better arguments that could be applied to the present realities.