Ideology and Theory: The Tension Between Political and Economic Liberalism in Seventeenth-

Century England
Author(s): Joyce Appleby
Source: The American Historical Review, Vol. 81, No. 3 (Jun., 1976), pp. 499-515
Published by: Oxford University Press on behalf of the American Historical Association
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Ideologyand Theory: The Tension betweenPoliticaland
England
Economic Liberalismin Seventeenth-Century

JOYCE APPLEBY

DURING THE LAST TWO DECADES of the seventeenth century-ninety years

beforethe Wealth ofNationsappeared-a numberofBritishwriterschallenged
thecentralpremisesofthe balance-of-trade theoryforeconomicgrowth.The
currencycrisisand the craze over Indian cottonshad sharpeneda sense of
interestsamong Englishmen,and thesedivisiveissuescalled forth
conflicting
a body of writingwhich attackedthe principlesunderlyingthe mercantile
system.Examiningin a newway theoperationofthe market,Dudley North,
Nicholas Barbon, Dalby Thomas, HenryMartyn,Francis Gardner,James
Hodges, Henry Layton,John Houghton,and severalanonymouspamphle-
teersproduced explanationsof economicrelationswhichwere farmore so-
phisticatedthan the prevailingtheories,anticipatingat many points the
premisesofAdam Smith'smonumentalsynthesis.
Yet despite this new plateau in economic reasoning,the conceptually
flawedbalance-of-trade theory,withitsbuilt-incorollarythateconomicregu-
lationwas essentialto nationalsecurity, became evenmorefirmly fixedin the
public mind in the eighteenthcentury.The ideologicalimplicationsof the
rejectionof these writingshave not been explored.Scholars have assumed
the science of economics had to wait for the path-breakinggeniuses1 or
thatthe balance-of-trade criticsweretoo exceptionalto treatas a significant
group.2Charles Wilson recentlydescribedDudley Northas a swallowwho
did not producea summer.3The analogyis worthpursuing.Taking a closer
lookat the birdsin hand, it is possibleto concludethatit was notthelack of
swallowsthatcounted,but the distasteforsummers,that,in fact,economic
thoughtran ahead ofsocial developments,and the analyticalinsightsofthe
I am indebted to William Kennedy,Margaret Gay Davies, Richard Steele, and, especially,Andrew
Applebyfortheircarefulreadingof thisarticlein manuscript.
(London, 1935), I: io4ff;Jacob Viner,Studiesin theTheory
1 Eli Heckscher,Mercantilism ofInternational
Trade(New York, 1937),90, 117-i8.This interpretation is implicitin BrunoSuviranta,The Theory ofthe
Balanceof Tradein England(Helsingfors,1923).See also AlexanderGerschenkron, "Historyof Economic
Doctrinesand EconomicHistory,"American EconomicReview, 59 (1969),2; and WilliamLetwin,TheOrigins
Economics
ofScientific (London, 1963),144-48.
2J. D. Gould,EconomicGrowthinHistory(London, 1972), 220-22; CharlesWilson,England'sApprenticeship,
1603-I763(New York, 1965),184.
3 Ibid.,266.
499

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500 Appleby
Joyce
balance-of-trade criticswere dismissedbecause theythreatenedthe fragile
social order in England duringthe country'scriticalpassage into a fully
capitalisticsociety.
The balance-of-trade explanationofhow nationsgrowwealthyhad focused
attentionupon productionin such a way as to obscure the dynamicsof
consumption.Inside England the mostnoticeableconsumerswere the very
richand the verypoor, and therewas littlein theirpatternsofspendingto
encouragea re-evaluationofconsumption.As landowners,therichcould tap
agriculturalrevenuesfirst.Their rent rolls were the principal source of
capital,buttheyspentratherthaninvestedtheirincome.4The verypoorwere
a conspicuousdrainupon the economybecause therewereso manyofthem,
and theirsubsistenceneeds were paid forthroughtaxes.5GregoryKing's
estimatethat half the familiesin England could not pay for theirliving
indicatesthedimensionoftheproblemofunderemployment.6 These realities
made plausibletheargumentthatsincedomesticconsumptiontookfromthe
storeof Englishcapital throughluxurybuyingand the maintenanceof the
poor, marketsforEnglish goods should be soughtoutside the country.In
otherwords,let the social overheadand upper-classvanityof othernations
returna profitto England. Such a prescriptionfitwell with the endemic
European states. Blockedfromap-
politicalrivalriesof seventeenth-century
preciatingtheroleofdomesticconsumption, economicthinkersslippedeasily
into the assumptionthat consumptionwas a necessaryevil,growing-if at
all-in responseto populationgrowth.
Thomas Mun, Gerald de Malynes,and Edward Misselden had analyzed
the influenceofdemand upon pricesin theirfamousdebatesoverthe foreign
exchangein the I620S. In England'sTreasure
byForraignTrade,Mun also drew
attentionto the way elasticityofdemand influencedforeignconsumption, as
did Mun's contemporary, Rice Vaughan. But none of these writersof the
early seventeenthcenturyor theirimmediatesuccessorsdealt comprehen-
sivelywiththerelationofsupplyand demand.7As longas domestictradewas
consideredanalogousto takingin each other'swashing,therewas no way to
considerincreasedspendingas beneficial.8Instead total demand appeared
4Sir William Pettyreferred to transferringwealththroughtaxation"fromthe Landed and Lazy, to the
Craftyand Industrious,"A TreatiseofTaxes & Contributions (London, 1662), 19. A similarsentimentwas
expressedby Sir Dalby Thomas in An Historical Accountof theRise and Growth oftheWest-India Colonies
(London, 1690)in TheHarleianMiscellany (London, 1809),2: 359.He explainedthatwhenit is said "people
are the wealthof a nation,it is onlymeant,laboriousand industriouspeople; and notsuch as are wholly
unemployed,as gentry,clergy,lawyers,servingmen, and beggers,etc." See also Sir Francis Brewster,
Essayson TradeandNavigation (London, 1695),52.
5 For contemporary estimatesofthePoor Law burden,see [WilliamCarter],England'sInterest in
Asserted,
theImprovement of itsNativeCommodities (London, 1669), io; [Sir HumphreyMackworthl,England'sGlory
(London, 1694),24. For a modernestimate,see Wilson,England'sApprenticeship, 235.
6 King's figuresare reproducedand analyzedin PeterLaslett,The WorldWeHaveLost(New York, 1973),
36-40.
7Thomas Mun, England'sTreasure byForraign Trade(London, 1664),84-86;Rice Vaughan,A Discourse of
CoinandCoinage(London, 1675)inJohnR. McCulloch,ed., A SelectCollection ofScarceand ValuableTractson
Money(London, 1856),82.
8 For contemporary assertionsthatsellingto one anotheris "mere consumption"withoutenrichment,
see Sir Thomas Culpeper,A Discourse, ShewingtheManyAdvantages WhichWillAccrue to ThisKingdombythe
Abatement of Uzsury(London, i668), 2-3; Sir William Petty,PoliticalArithmetick(Londoni 1690),82ff; John

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 Ideology
and Theory 501

inelastic.The rich were expected to buy theirluxuries,the poor to have

enoughto subsist.The possibilitythatat all levelsofsocietyconsumersmight
acquire new wants and findnew means to enhancetheirpurchasingpower
whichcould generatenew spendingand producehabitscapable ofdestroy-
ing all traditionallimitsto the wealthof nationswas unthoughtof, if not
unthinkable.
During these same years that the balance-of-trade theoryservedas the
principalexplanationof economicgrowth,importantsocial sentimentshad
become embeddedin the prevailingideas of how nationsgrewwealthyand
powerful.Behind the balance-of-trade theory,therelay a model of the na-
tionaleconomywhichsuppliedtheprincipalmoralsupportformercantilistic
regulation.Since nationalwealthwas believedto accrueonlyfromtheannual
net gain fromforeigntrade,the whole economycould be conceivedofas a
kindofnationaljoint-stocktradingcompany.In thisview,membersofsociety
did notinteractwitheach other,but ratherparticipated,one withanother,in
England's collectiveenterpriseof sellingsurplusgoods abroad. As in a com-
pany, the administrationwas formal.There was little of Adam Smith's
awarenessof individualswithpersonalmotivesworkingpurposivelyon their
own. Rathereconomicwritersapproachedtheproblemofpromotingnational
growthmuch as a factoryforemanmightviewmeetinga productionquota.
ReadingthroughdozensofproposalsforpromotingEnglishproductionone is
forciblystruckby the absence of concernforthe problemof marketingthe
projectedincreasein goods. Emphasis fellexclusivelyupon mobilizinglabor
and exploitingnew resources:loweringinterestrates would stimulateland
improvements; attractingforeigncraftsmen would introducetechnicalskills;
agriculturaldiversification
wouldrelievedependenceupon outsidesuppliers.9
With such a model at the back of their heads, these writersrepeatedly
elaborated schemes for puttingpeople to work. Houses for the "orderly
managementof the poor" was a favoritetheme.Even moreindicativeofthe
nationalmanagementattitudewere the frequentsuggestionsfora national
fishery.Not only would it absorb the labor of weavers' apprenticesin off-
season,butone writerevensuggestedthatthefootmenofthegentrycould rise
earlyand employtheiridle hoursmakingnets,as could "disbanded soldiers,
poor prisoners,widows and orphans, all poor tradesmen,artificers,and
labourers,theirwives,children,and servants.""0
Cary, An Essay on theStateofEngland(Bristol, 1695),preface; John Pollexfenj,Englandand East India
in TheirManufactures
Inconsistent (London, 1697),20; The Profit and Loss oftheEast-IndiaTrade (London,
Relatingto theRoyalAfricanCompany
[16991),8-9; CertainConsiderations of England([London], i68o), i;
Brewster,Essays,50-52. In the 169osthe word "consumption"loses its pejorativeconnotation.
9 For example,see Culpeper,A Discourse, 5; Samuel Fortrey,EnglandsInterestandImprovement (London,
1673) in McCulloch, ed., A SelectCollection of EarlyEnglishTractson Commerce (London, i856), 234-36;
BritanniaLanguens(London, i68o),in ibid.,298ff;AngliaeTutamen(London, 1695),29. Suviranta,Theory ofthe
BalanceofTrade,153-54,errs,I think,in sayingthatpriortoJacob Vanderlintlittleattentionwas paid to the
economicvalue of land.
'0James Puckle,England'sPathto Wealth andHonour(London, 1700), in WalterScott,A CollectionofScarce
and ValuableTracts(London, 1814),11: 380.See also RogerCoke, A Detection oftheCourtandStateofEngland
(London, 1694),2: 494-95; Reasonsfora LimitedExportation of Wooll(n.p., i677), 18-20; Richard Haines,
England'sWeal & ProsperityProposed(London, i68i), 6-7.

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502 JoyceAppleby

This joint-stockenterprisewas a powerfulimage,forit providedsymbolic

cohesionto a societybeingatomizedby themarket.Merchantsand industri-
alistswereable to establishtheirplace in the social orderin referenceto this
model,and thelaboringpoorcould findin theirdisciplinedeffort an avenueof
entwiningreligionwiththe social benefitsof productivity,
grace. Effortlessly
SlingsbyBethelrailedat popularfeastings because theyprovokedthewrathof
God, wastedtime,dulled wits,and made men "unfitforactionand business,
whichis [the]chiefadvancerofany Government.""Wherereligionfailedto
secure the necessaryhabits, laws were expected to supply the deficiency.
William Sheppard urged double indemnityfor those who bought wares
knowingthat theycould not pay forthem.Those who lived high,he said,
should be taxed as long as theycontinuedtheirexcesses.'2In a similarvein
John Scarlettproposeddiscriminating among defaulterson the basis ofthe
use made of the dissipatedfunds,those runninginto debt forriotousliving
beingsubjectto the"utmostextremity" ofthelaw.'3The moralityofthemar-
ketwas quietlyfusedwiththe moralityof the marketman'sGod.
The balance-of-trade theoryexplainedhow increasingexportsalone could
increaseEngland's wealthand at the same timeprovideda rationaleforor-
ganizinglabor and legislatingmarketpatterns.Associatedwithit were ap-
peals to patriotismand a justificationofexistingeconomicroles. Wherethe
theoryfailedwas in its abilityto explain Englisheconomicgrowth.In the
closingdecades ofthe seventeenth century,real income,domesticspending,
and foreignexportsrosetogether.FromJohnGrauntin I662 to WilliamPetty
in I682 to Charles Davenantin the nextdecade the wealthofEngland drew
comment.'4Everyindex of economicgrowthshowed an advance-agricul-
turaloutput,capital investment, importsfromthe Indiesand theNew World,
and the range and quantityofhome manufacturing.'5 Most strikingwas the
aboundingevidenceofa rise in domesticconsumption.What had happened
to the storeof wealthconsumedby the London fire?Contemporariessaw it
splendidlyreplacedbeforetheirveryeyes.And the rebuildingofLondonwas
but themostspectaculartestimony to thefactthatEnglishmenweregenerally
enjoyinga higherstandardofliving.This growthposed questionsbeyondthe
explanatorypowerof mercantilist theory.
In the I670S some writers,respondingto the obvious,ifuneven,economic
growth,began to speculate upon the dynamiceffectof increasingdemand.
The word "markets"in theirpamphletssubtlychangedfroma reference to
thepointof sales to the moreelusiveconceptofexpandablespending.In the
nextdecade a controversy overEast Indian importsgrewintoa ragingdebate
11 [SlingsbyBethel],ThePresent
Interest
ofEnglandStated(London, 1671), 12-13.
12
WilliamSheppard,EnglandsBalme(London, 1657),147,178.
13John Scarlett,TheStileofExchanges
(London, 1682), 321.
14
K. G. I)avies, "Joint-StockInvestment in the LaterSeventeenth Century,"EconomicHistoryReview,2d
ser.,4 (1952), 284-85;forcontemporary comment,see Petty,Political Arithmetick,
96-99; [CharlesDavenant],
AnEssayontheEast-India-Trade (London, 1696),8-io; [WilliamCarter],TheGreatLossandDamagetoEngland
bytheTransportation of WoolltoForreignParts(n.p., i677), 12.
" Wilson, England'sApprenticeship, j85; R. M. Hartwell,"Economic Growthin England beforethe
IndustrialRevolution,"JournalofEconomic History,29 (1969), 25; Gould, Economic
Growth, 156-77.

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 Ideologyand Theory 503

on domesticconsumption.Accordingto traditionalwriters,thevillainofthe
piece was the East India Company. Not only did the company enjoy a
monopolyofthetradeto India, butthenatureofitstrade-exportingbullion
in returnforimportscompetitive withEnglishgoods-ran athwartthe most
cherishedprinciplesofthebalance-of-trade concept.Fromthepointofviewof
thosein the Englishwoolenand silkindustriesthecompany'sgreatestcrime
was introducingthe English public to the light,colorful,cheap fabricsof
India. By I690, the tasteforchintz,calico, and muslinhad reachedepidemic
proportions. What had begunas an inconspicuoususe ofcottonforsuitlining
had givenway to a gaudydisplayofprinteddraperies,bedspreads,tapestries,
shirts,and dresses."6With marketingexpertiseequal to Macy's, in the
twentieth century,themanagersoftheEast India Companyhad sentEnglish
fabricdesignersto India to directthe Indian craftsmenin reproducingpat-
ternsespeciallyadmiredat home.The impactupon employment in England
was strong.The popularityand competitiveadvantagesofimportedcottons
led to a glut in the home marketforwoolens and silks. Contemporaries
complainedthat thousandsof workersin the two domesticindustrieswere
thrownonto the parish forsupport.The effectedproducerswanted a flat
prohibitionon domesticimportsof Indian cottons.Their advice to the East
India Companywas to sell theircalicoes abroad wherecheap textileswould
underminethe nativeindustriesof Great Britain'straderivals.17
Althoughit is difficultto learn fromcontemporary pamphletswhetherthe
poor were importantforworkingup manufactures or manufacturing impor-
tantforemployingthepoor,increasingly afteri66otheemphasisfellupon the
importanceof expanding opportunitiesfor work. Bans on the export of
Englishraw materialsand proposalsforreplacingforeignimportswithdo-
mesticsubstituteswere advanced on the groundthat theywould increase
employment.From this point of view, items requiringmore labor were
sociallymoreusefulthanthoserequiringless. Even labor-savingdeviceswere
suspect. The woolen and silk manufacturers drew upon this rationale in
fightingthe East India Company.They stressedthe unfairnessofsearching
out places whichcould undersellEnglishcommoditiesand questionedwhy
manufacturing oughtnotbe promoted"in England [rather]thanin India."'8
Charles Davenant was obviouslythinkingwithinthe traditionaltheoretical
frameworkwhen he asserted that cheap importedtextiles"freed" more
English woolens forforeignexport,but other writersrecognizedthat the
clothierscould onlybe convincingly answeredby movingoutsidethebalance-
of-tradelogicaltogether.'9
16 p. J. Thomas, Mercantilism and theEast India Trade(London, 1963),30, 51; Suviranta,Theory ofthe
Balanceof Trade,7. Both Thomas and Suvirantapointed out the stimulusof the East India trade to
economicreasoningin the seventeenthcentury.
17 The (;reat Necessity
and Advantage ofPreserving ourOwn Manufacturies (London, 1697),6-1o; [Thomas
Smith],England'sDangerbyIndianManufactures (n.p., [16981),2-7; lPollexfenj,EnglandandEast India,18-20;
ReasonsHumbly OfferedforthePassingofa Bill (London, 1697),7-23; An Answer totheMostMaterialObjections
(np., [16991),i.
'8 Ibid.,2.
'9 Thomas, Mercantilism andtheEast India Trade,8i.

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504 JoyceAppleby

In Considerations
on theEast-India Trade, Henry Martyn made a full frontal
attackon the theoryofthe social utilityofhighlabor costsby examiningthe
differentials
in domesticconsumption.ConcedingthatIndian imports"abate
the price of English Manufactures,"he maintainedthat this abatement
stimulatedother segmentsof the economy. Laborers who bought Indian
cottonswould have moremoneyavailable fromtheirwages to spendon those
itemsproducedmoreefficiently by the English.Even ifEnglishlaborerswere
thrownout ofwork,the greatercompetitionforjobs would lowerwages and
push down the cost ofotherEnglishproducts.Drivinghome his cost-advan-
tage theory,Martyn stressedthat any law which forcedthe English to
consumeonlyEnglishgoodsforcedthemto pay morefortheirneedsthanwas
necessary.He likenedthis to denyingthe benefitsof new inventionsor the
obvioussavingsfromthedivisionoflaboror rejectingwheatsentas a giftfrom
God.20Martynexploredthe relationbetweenearningand purchasingpower
with unprecedentedanalytical skill. Many of his observationshad been
anticipatedby earliercommentators.For example,Dalby Thomas had ex-
tolledthe labor-savingingenuitywhichthedesireto acquire called forth, and
John Houghton had disputed Samuel Fortrey'sstricturesagainst French
importsby pointingout that even foreignluxuryitems satisfiedgenuine
consumerdemandsand made peopleworkharder.21 These writerslegitimized
domesticcompetitionbecause theyperceivedthat England was not a giant
workhousebut a giantmarketwhoseindividualmembershad differing needs.
In focusingattentionon thesenew marketrelationships, the pamphletson
Indian importsrevealedthose areas of conflictbetweenmanufacturers and
merchantswhichthe predominating concernwithforeigntrade had so long
obscured. Driven no doubt by self-interest,the defendersof the East India
Company put fortha justificationfor"a good buy" which amountedto a
defenseof domesticconsumption.Here the issue became criticalto thewhole
structureof ideas associated withthe balance-of-trade theory,because the
idea ofthe Englisheconomyas a collectiveundertaking was beingchallenged.
This lineofattackcutdeeperthanthesuperficial The actual
clash ofinterests.
social atomizationwhichcame withthe seventeenth-century transitionto a
marketeconomyhad been amelioratedby an imaginativemodelofeconomic
unityorganized around national productionand fortified by religionand
patriotism.Psychologicalatomizationcould be forestalledas long as this
image retained its credibility.When individualsbegan to thinkof their
separate needs and demands as acceptable social considerations, the coher-
ence of the earlier model would disappear. The benefitsof the English
consumers'havingaccess to cheap East Indian importsdepended upon the
rejectionof the view that societywas an interlocking set of producersand
distributorsand the acceptanceofthe alternativeviewthattheeconomywas

ontheEast-IndiaTrade(London, 1701) in McCulloch,ed., EarlyEnglish

20 IHenryMartyni,Considerations

Tractson Commerce,
6o6,578-86.
21
IThomasi, An Historical
Account,
361-62; John Houghton],England'sGreatHappiness (London, 1677),
18-20.

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 Ideologyand Theory 505

an aggregationofself-interestedindividualproducer-consumers. The boldest

proponentsofIndian importsperceivedthisdifference and advanceda theory
of economicgrowthbased upon thisperception.
Whenthe maverickspiritoffashionrevealeditselfin thecraze overpainted
calicoes the potentialmarketpower ofpreviouslyunfeltwants came clearly
intoview.Here was a revolutionary force.Undertheswayofnewconsuming
tastes,people had spentmore,and in spendingmoretheelasticityofdemand
had become apparent.In thiselasticity,the defendersofdomesticspending
discoveredthe propulsivepower of envy,emulation,love of luxury,vanity,
and vaultingambition.On theotherhand,as longas demandwas viewedas
moreinelasticthanelastic,thestaticconceptionofwealthheldgood. England
thencould only growricherby sellinga largershare ofher surplusabroad,
that is, by controllinga larger share of the internationalmarket.Once
consumptionwas construedas a constructive theconnectioncould be
activity,
made betweenprogressivelevelsof spendingor effective demand and a self-
sustainedmomentumforeconomicgrowth.Writingin I690, Nicholas Barbon
bubbledoverwiththenewpossibilities:"The WantsoftheMind are infinite,
Man naturallyAspires,and as his Mind is elevated,his Senses growmore
refined, and morecapable ofDelight;his Desiresare inlarged,and his Wants
increasewithhis Wishes,whichis foreverythingthatis rare,can gratifiehis
Senses,adorn his Body,and promotetheEase, Pleasure,and Pomp ofLife."22
From Dudley Northcame a similarexpression:"The main spur to Trade,
or ratherto Industryand Ingenuity, is theexorbitantAppetitesofMen, which
theywilltakepains to gratifie,and so be disposedto work,whennothingelse
will inclinethemto it; fordid Men contentthemselves withbare Necessaries,
we shouldhave a poor World."23
Less euphorically,Francis Gardnerexplainedthat while frugality was no
doubta commendablething,"wherePeople growRich, theywillspendmore
largely,and it is bettertheyshould do so thanto slackentheirIndustryand
Diligence in Trade."24 These sentimentseven crept into the writingsof
conventionalbalance-of-trade writerssuch as JohnCary, who affirmed that
the growthof pride and luxurywas the principalquickenerof trade and
extendedhis analysisdownto "our poorin England" who can spendmoreon
clothes and furnishings when they are paid more and hence increasethe
consumptionof the verygoods theymanufacture.25 An earlyconvertto the
powerofconsumption, JohnHoughtonassertedthat"Our High-Livingis so
farfromPrejudicingthe Nation that it enrichesit." Describingthe deadly
22 [Nicholas Barbon], A Discourse
ofTrade(London, 1690), 15.
23
[Sir Dudley North],Discourses
uponTrade(London, 1691),14.
24 [FrancisGardner],SomeReflectionsona Pamphlet (London, 1696 [1697]), 24, as cited in Richard C.
Wiles, "The TheoryofWages in Later EnglishMercantilism,"Economic History Review,2d ser.,21 (1968),
i19. Usually identifiedsimplyas "Gardner," the author was probablyAldermanFrancis Gardner of
Norwich,who was consultedby the PrivyCouncil on the questionof recoinage,accordingto J. Keith
Horsefield,BritishMonetaryExperimentsi650-I7I0 (Cambridge,Mass., 1960),52,and appears among those
votingagainst the recoinagemeasurein [Thomas Wagstaffe],An Account oftheProceedings in theHouseof
Commons (London, 1696),13.
25
Cary,AnEssay,143ff.

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506 JoyceAppleby

sins as economicvirtues,Houghtoncited pride,finery, vanity,shows,play,

luxury,eating,and drinkinghighas causing"more Wealthto the Kingdom,
than loss to private estates."26"Desire and want increase with riches,"
Barbonobserved,"a PoorMan wantsa Pound; a Rich Man an Hundred."27
Not contentmerelyto catalogue the psychologicalstimulantsto demand,
thesewritersdrewattentionto thespecificeconomicfunction ofeach emotion.
Foreign importswere justifiablebecause they dazzled people with their
noveltyand promotedindustryby way ofthe acquisitiveinstinct.Analyzing
the rationaleforbanningforeignimports,Barbonexplainedthatitwas based
on the fallaciousidea thatifEnglishmencould notbuy foreignluxuriesthey
would consumedomesticgoods. This was nottrue,he said, because it "is not
Necessitythatcauseththe Consumption,Naturemaybe Satisfiedwithlittle;
but it is thewantsofthe Mind, Fashion,and desireofNovelties,and Things
scarce,thatcausethTrade."28
Dalby Thomas made thesame pointwhenhe objectedto thosewhowanted
England to live on its own withoutimportedluxuries.They were not the
sourceofsin,he said, but "truespursto virtue,valour,and theelevationofthe
mind,as well as thejust rewardsofindustry."29 Competitionpromptedmen
to inventthingsto reducelabor costs,Martynasserted."If myNeighbourby
doingmuchwithlittlelabour,can sell cheap, I mustcontriveto sell as cheap
as he."30North describedenvy as a goad to industryand ingenuityeven
among the lowest order. When the "meaner sort" see people who have
become richthey"are spurr'dup to imitatetheirIndustry."Even the man
who goes bankruptemulatinghis neighboris a national benefactor,forthe
public gains from"the extraordinary Applicationhe made, to supporthis
Vanity." Fashion, Barbon said, promotestrade because it "occasions the
ExpenceofCloaths,beforetheOld ones are wornout." Rejectingsumptuary
laws,Northcommendedconsumptionforitsstimulusto trade.Nationsnever
thrivemorethan when "Riches are tostfromhand to hand."'31
Behind these endorsementsof early obsolescenceand conspicuous con-
sumptionlay a new confidencein society'sproductivepowers.WhereAdam
Smithwould use the self-sustaining powerofconsumptionwithoutextolling
it,these of
writers the I69os A "Conspiracyofthe
actuallypraisedprodigality.
Rich Men to be Covetous,and notspend,wouldbe as dangerousto a Trading
State, as a ForreignWar," Barbon proclaimed.32 When John Pollexfen,an
unreconstructed balance-of-trade thinkeron theBoard ofTrade, used theold
moralisticargumentsagainstluxuryconsumption,Gardnerrepliedthatthere
was "no otheruse ofRiches,butto purchase"whatserved"our Necessityand

ofLetters(London, i68i), 6o.

26Houghton, A Collection
27 Nicolas Barbon,A Discourse
ConcerningCoiningtheNew MoneyLighter (London, 1696),3.
28
[Barbon],A DiscourseofTrade,72-73.
29
[Thomas], An Historical
Account,
362.
30
ontheEast-IndiaTrade,590.
[Martyn],Considerations
[North],Discourses
uponTrade,15; [Barbon],A Discourse
ofTrade,65; [North],Discourses
uponTrade,15.
31

See also, EnglandsInterest

(London, 1682),6.
32
[BarbonJ,A DiscourseofTrade,63.

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 Ideologyand Theory 507

Delight."33The dour disapprovalof self-indulgence was counteredwiththe

happy intimationof a new societyof consumer-producers. "The more the
merrier,"HumphreyMackworthproclaimed,"like Bees in a Hive, and better
Cheer, too."34 Moreover,the writerswho promoteddomesticconsumption
stressedthe essentialreciprocity trade. Ratherprecipitately
of international
labelingbalance-of-tradenotionsas dead, theauthorofthePrefaceto North's
DiscoursesUponTradeannouncedthatthewholeworldoftradewas but as one
nation,concludingfromthisthat"the loss ofa Trade withone Nation,is not
that only, separatelyconsidered,but so much of the Trade of the World
rescindedand lost,forall is combinedtogether."35 Afterassertingthateither
foreignor domesticconsumptionwas good forthe nation, Houghtonex-
that importconsumptionenabled foreigncountriesto
plained in his Letters
buy of England.36HenryMartyn'scost-advantagedefenseof the East India
Companyalso emphasizedthe mutualityof international commerce.
Accompanyingthe pamphletwar over Indian importswas a debate over
moneywhich pointed up the inadequacy of the mercantilistdefinitionof
wealth.Accordingto the balance-of-trade theory,gold and silveralone were
wealth,and countrieswithoutminescould become wealthyonly by a care-
fullymanagedforeign tradewhichbroughtin morespeciethanwentout. This
explanationofwealthundergirtthe notionof the sterility of domestictrade
and led to an evaluationof all economicactivitiesin termsoftheircontribu-
tion to a net balance of payments.As early as i650, William Potterhad
emphasized the commodityexchange that lay at the base of commercial
transactions,37but the writersofthe I69os stressedthe utilityof moneyas a
meansto thegoods mendesired.RogerCoke putitsuccinctly:"The wealthof
everyNation consistsin Goods morethan Money,so muchtherefore as any
Nation abounds morein Goods than another,so muchricheris thatNation
thantheother,forMoney is ofno otheruse, than as imployedin Trade, and
the defenceofthe Nation."38"To distinguishrightlyin thesepoints,"Dalby
Thomas explained,"we mustconsidermoney,as theleast partofthewealth
of any nation,and thinkof it only as a scale to weigh one thingagainst
another."39Carryingthe analysisfurther, Francis Gardnermaintainedthat
"some Goods are more acceptable in some Countries,at sometimes,than
Money. "40
The repeatedassertionsthatmoneywas onlya means forsatisfying one's
desireforgoods was but a step away fromthepositionthatconsumptionwas
the logical end of production.As Henry Martyn put it: "The true and
3 [Gardner],SomeReflectionsona Pamphlet, 7.
34 [Mackworthl,England'sGlory, 20-23.
35 [North],DiscoursesuponTrade,viii. William Letwin,"The Authorshipof Sir Dudley North's'Dis-
courseson Trade,' " Economica,18(1951),35-45,suggeststhatRogerNorthwrotetheprefaceto hisbrother's
essay.
"8John Houghton,A Collection ofLettersfortheImprovement & Trade(London, i68i), 52-53.
ofHusbandry
3 William Potter,TheKeyof Wealth (London, i650), 2.
38 Coke, A Detection,
2:522.
39 [Thomas], An Historical Account,359.
40 [Gardner],SomeReflectionsona Pamphlet, 7.

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508 JoyceAppleby

principalRiches,whetherofprivatePersons,or ofwholeNations,are Meat,

and Bread,and Cloaths,and Houses, theConveniencesas wellas Necessaries
of Life . . . These fortheir own sakes, Money, because 'twill purchase these,
are to be esteemedRiches; so thatBullionis onlysecondaryand dependent,
Cloaths and Manufacturesare real and principalRiches.41
Speakingdirectlyto the balance-of-trade maximthatcommercewas only
beneficialwhen moregoods wereexportedthan imported,Thomas Papillon
maintainedthatthiswould onlybe trueifgold and silverwerethe sole stock
and richesof the kingdom:"Whereas in truththe Stock and Riches of the
Kingdom,cannotproperlybe confinedto Money,noroughtGold and Silver
to be excluded frombeing Merchandise,to be Traded with,as well as any
othersortofGoods."42JohnHoughtonassertedthatmoneyin coinwas "good
fornothing,but potentiallyis good foreverything."43
Duringthedebateswhichprecededthe I696 recoinageofEngland's clipped
silver,attentionpassed to thequestionofwhethergoldand silverpossessedan
intrinsicand unique value whichmade bullionsynonymous withwealth,or
whetherthe use of moneyforexchangepurposesmade the extrinsicvalue
derivedfromofficialmintingthe moreimportant.In thisclash ofopinions,
John Locke foundhimselfranged against North,Barbon,James Hodges,
HenryLayton,Sir RichardTemple,and WilliamLowndes. Because Locke's
recommendationforrecoinagewas based in part on the metalistview of
wealth,his opponentsdug away at this point. Money, Laytonsaid, was as
much a measurebetweenitemsto be barteredand a commodityitselfas the
"natural,unalterablemeasureofCommodities,"whichLocke had made it.44
Hodges said Locke's systemof coin was built on the common errorof
consideringthe estimateof worthto be its intrinsicvalue ratherthan its
usefulness.45AttackingLocke's beliefthattradewas valuableonlyas a means
of attractingbullion,Barbon called the notion"altogethera mistake."Gold
and silverwere"but Commodities;and one sortofCommodityis as good as
another,so it be ofthe same value."46
By deprivinggold and silveroftheirunique qualities,thebalance-of-trade
criticsopened the way forappreciatingthecontribution of domestictradeto
economicprosperity. Daniel Defoedevelopedthispositionmostthoroughly in
TaxesNo Charge.Settingforthan elaborateplan forpumpingmoneyintothe
economyby taxingmisersand pleasure spenders,Defoe argued that if the
benefitof foreigntrade is to bringin commodityforcommoditythen that
can be done at home withoutexposingpeople to the hazards of the sea.47
Lowndes,Layton,and an A. Vickarissimilarlydrewattentionto thefactthat
41 [Martynl,Considerations
ontheEast-IndiaTrade,558.
42 Thomas Papillon,TheEast-India-Tradea MostProfitable
TradetotheKingdom (London, 1696), 4 (originally
publishedanonymouslyin 1677).
43 Followingthis logic,Houghton,A CollectionofLetters,
24-25, recommendedbringingin goods rather
than moneyto balance accounts,since moneyis unable to satisfyany real human needs.
44 [Henry
Layton],Observations
Concerning
Money andCoin(London, 1697), 12.
45 JamesHodges], ThePresent StateofEnglandas toCoinandPublickCharges(London, 1697),135.
46 Barbon,A DiscourseConcerning
Coining,
40.
47 [Daniel Defoel,TaxesNo Charge
(London, 1690), 17.

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 Ideology
and Theory 509

moneyis onlyuniquelyprizedas a meansofforeign exchange,and thatwithin

the internalmarketthe intrinsicvalue of gold and silveris immaterial.48
Carryingtheargumentstillfurther, Dudley Northsaid thatitwas absurdfor
people to say thatmoneywas short.Iftherewerea demandforit,itwould be
manufacturedlike anythingelse, since therewas freecoinage and plentyof
goldand silveraroundin plate.49Withincreasingsophistication, thesewriters
assessed the economicrole ofmoney.In shifting attentionaway frommoney
as a storeofwealth,theymovedcloserto recognizing thedynamicelementsin
the economy.The debate overmoney-oftenwiththe same debaters-thus
re-enforced the theoreticaladvances made in the India importscontroversy.
What was needednextwas to examinehow the latentconsumingcapacityof
the public at large mightbecome an engineforsustainedgrowth.
The idea of man as a consuminganimal withboundlessappetites,capable
ofdrivingtheeconomyto new levelsofprosperity, arrivedwiththe economic
literatureof the 169os. By goingbehindthe new tastesto explorethe human
motivesregulatingpersonalspending,somewritersdiscoveredbotha human
dynamic and a marketmechanismwhich underminedthe static, specie-
orientedmercantilist view. Unlikethe numberofworkingdays in a person's
life,energyand ingenuityorganizedunder the stimulusof desireappeared
almostlimitless.Since man could satisfyhisnewwantsonlyby increasinghis
purchasingpower,what desire ultimatelyproduced was an incentiveto be
morecompetitivein the market.Fromsuch a springeconomicactivitycould
functionwithoutoutsidedirection.Whereearlierwritershad recognizedthe
impactoftasteand delightupon themarketpriceofitems,theyneversaw the
effectof these influencesupon total demand. Nor did they move to an
appreciationof the role played by domesticconsumptionin stimulating
productionand total national growth.50 This requireda new definitionof
wealthand a new modelofeconomicsas a self-sustaining complexofinternal
relationshipsin whichforeigntraderepresented accessibilityto desiredgoods
ratherthan the onlysourceofriches.
The materialforbuildinga new economic theorywas presentedin the
169os,but theseideas werenotworkedout in thesucceedingdecades. Instead
the old formulasof the balance-of-trade theorysurvivedwithundiminished
strengthwell into the eighteenthcentury.Fragmentsfromthe controversies
over Indian importscan be foundin the polemicsoverthe Frenchtreatyof
17I3, in the voluminous economic writingsof Daniel Defoe, and in a
differentveinin BernardMandeville'sFableoftheBees.Clearly,to conceiveof
economic growthin termsof goods and servicesannually produced,pur-
chased, and consumedwas difficult forEnglishmenlong accustomedto the
48 [WilliamLowndes], A Report Containing
an EssayfortheAmendment oftheSilverCoins(London, 1695),
81-82; [Layton],Observations,
12-14; [A. Vickaris],AnEssayfor
Regulating
oftheCoyn(London, 1696),22-23.
49 [North],Discourses
uponTrade,postscript.See also [Mackworth],England'sGlory, 5-6; Sir Richard
Temple,SomeShortRemarks uponMr. Locke'sBook(London, 1696),4-1n;JohnCary,AnEssay,ontheCoynand
CreditofEngland(Bristol,1696),5-12.
5 See Marian Bowley,"Some Seventeenth CenturyContributions to theTheoryofValue," Economica,
30 (I963), 122-39.

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510 JoyceAppleby

pot-of-goldimage of wealth. Even afterthese ideas had been published, there

still remained obstacles-circumstantial as well as ideological-to the idea
that society was an aggregation of self-interestedindividuals tied to one an-
other by the tenuous bonds of envy, exploitation, and competition.
It lies in the nature of historical investigation that developments which
could be expected to take place, but do not, are rarely given the same
attentionas actual events. Yet a break in a development offersimportantclues
to the nature of social change. The lacuna which needs to be explained here is
the failure of writersto build upon the insights and arguments of the seven-
teenth-centurycritics of the balance-of-trade theory. Between the I620S when
Mun, Malynes, and Misselden probed the mechanism of the exchange and
the I69os when the popularity of Indian cottons and the recoinage became
issues, a host of journalists, reformers,merchants, bank promoters, royal
officials, London developers, members of Parliament, mathematicians, im-
proving landlords, clothiers,and lawyers published a steady stream of tracts
and treatises. Their writingsparalleled revolutionarychanges in the English
economy: the extension of the internal market, the development of the colo-
nial trade, the spectacular growthof London, ihe strikingincrease in agricul-
tural productivity,the founding of the Bank of England, and the redistribu-
tion of people and production centers. As could be expected from such a
motley assortment of would-be experts, the quality of the description and
analysis is uneven. There is, nonetheless, an increasing sophistication in the
conceptualization of wealth, commerce, and money which challenged the
central premises of the mercantilist theory. The failuireof others to take up
this fruitfulline of reasoning is the historical factwhich remains unexplored.
The usual treatment of this puzzle is to appeal to the slow spread of new
ideas, to minimize the amount and thoroughnessof the criticism,or to referto
residual Puritan scruples against spending. Of course new ideas oftenspread
slowly, but the rate and unevenness in intellectual currentsis what we would
like to understand better. The same is true of the enduring strengthof old
ideas such as the Puritan legacy in Restoration England. There were many
beliefs and values in the complex of Puritan thought. Why did some survive
into the Restoration and others not? The waning and waxing of Puritan ideals
require investigation.As forthe more common scholarly tendency to see the
mercantilistcritics of the late seventeenthcenturyas brilliant exceptions, the
range and number of their publications belie this.
The answer, I believe, is that the values embedded in the alternate theories
of economic growth were incompatible with the ideological imperatives of
English society. Ideology, I define as a shared and coherent view of the world
which provides solidarity by assigning and rationalizing the various roles
people fillin society. The moral cohesion provided by common beliefs cannot
be dispensed with, particularly in a society where custom has been largely
replaced by conscious decisions. In a time of profound social change, such as
England was experiencing, the shared explanations which an ideology offers
become all the more important because they prepare people to assume new

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 and Theory
Ideology 5I I

functions. They also facilitatethe integrationofnew ideas withold ones. The

volitionalnatureofbeliefmeans,however,thatnewexplanationsmustsatisfy
a rangeofneedsbeforetheywillbe willingly accepted.The uprootingofmuch
ofthe Englishpeasantryand the geographicredistribution ofworkersmade
social controla criticalissue. Ideas whichexplainedand justifiedthatcontrol
to both the controllersand the controlledwere essentialiforderwas to be
maintainedthrougha timeof change. The new economicideas undermined
therationaleforlower-classdisciplineand upper-classdirection.The divisive-
ness ofcompetitionamonggroupswithinthe economythreateneda political
structurealready strainedby clashes withthe crown. Mercantilism,unlike
the-more intellectuallyimpressiveideas of its critics,created morallysatis-
fyingroles in the new marketsociety.It prescribeda path of economic
developmentmore compatiblewith social stability.It also deflectedaware-
ness of the tensionsbetweeneconomic groups withinEngland. From this
perspective,the balance-of-trade theorybecame economicorthodoxyin the
firsthalfof the eighteenthcenturynot because it explainedthe marketto
contemporaries-ithad ceased to do this by i68o-nor forwant of better
explanations,but because it offereda rationaleforcoercingthe poor,con-
trollingthe directionof growth,and subordinatingthe competitionamong
groupsto the goals ofeconomicnationalism.
Capitalismin the firstpart ofthe seventeenth centuryhad provedcompat-
The lowerorderbecamethelaboring
ible withtraditionalsocial stratification.
poor,whilemerchants,clothiers,bankers,shippers,and processorsacquired
the gentilityformerly reservedforthe landed class.51Subtle shiftsin values
had occurred,but the two-tiered worldofthepropertiedand thepropertyless
had not been undermined.A consumption-oriented model of economic
growth,on theotherhand,threatenedmajor of
interests therulingclass that
-hadcoalesced in RestorationEngland.Dangerous levelingtendencieslurked
behind the idea of personal improvementthroughimitativebuying.The
notionthat the wealthof nationsbegan withstimulatingwants ratherthan
organizingproductionrobbed intrusivesocial legislationof a supporting
rationale.Once it was suggestedthatspendingin thehomemarketwas more
beneficialto the economy than domesticparsimonythe social benefitsof
statutory wage levelscould be questioned.IfEnglishconsumershad a rightto
a good buy in Indian cottons,as Martyn suggested,why could they not
demand commercialpolicieswhichwould protectthem?
It is no accident that the men who advanced these novel opinionsabout
domesticconsumptionwere merchants-eitheroutspokendefendersof the
East India Companyor likeDudley North,an experiencedTurkeymerchant,
associatedwithforeigntradeswhichgrewwiththespreadofnewtastes.They
were not involved,as were manufacturers, in the mobilizationof labor. The
importantvariablesoftheircommercialworldweremarkets,prices,shipping
costs, and interestrates. The manufacturers whose numbersgrewwiththe

" Lawrence Stone, "Social Mobility in England, 1500-1700," no. 33 (I966), 52-55.
Past and Present,

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512 joyceAppleby

increasein industrialprocessingshared the clothiers'concernwithemploy-

mentproblems.The lowerclass loomed largerto themas potentialworkers
than as likelycustomers.In thisregard,the industrialcapitalistssharedthe
interestoffarmersand landed gentry, who reliedupon theavailabilityofday
laborersat criticalseasons of the year. Unlikethe foreignmerchants,these
membersofthe rulingclass had powerfulreasonsto maintainthecredibility
ofthe balance-of-trade explanationofnationalwealth.Beforepatriotismwas
the last refugeof the scoundrel,it was the valued ally of Englishmanufac-
turersand landlords,creatinga freelaborforcefromthecopyholders, tenants,
mechanics,and craftsmen ofan old order.Moreover,conventionalmercantil-
ist formulassupplied a rationalefirmlybased on national securityforthe
protectionistlegislation which came into full force after 1713.52 To entertain
the idea that"the wholeWorld as to Trade, is but as one Nationor People"
was to bringintoquestionnotonlytheentireNavigationSystembut also the
wisdomof England's calculatedlyaggressivenationalposture.
This new challengeto mercantilistthoughtalso bore upon the moresubtle
problem of social controlin a liberal society.Through the course of the
seventeenthcentury,upper-classEnglishmenhad disentangledthemselves
fromthe constrainingties of a corporatesocietyand embracedinsteadthe
ethosofliberalism.Slowlythe individual'srightto be freeof inheritedsocial
obligationshad gained precedenceoverthe older notionof society'sprimary
claim upon its members.While liberalethics freedpropertyand property
ownersfromtraditionalsocial restraints,it also underminedthejustification
forsome people's being investedwithpermanentauthorityover others.In-
stead,all in thesocietywereconceivedto be freeand individually
responsible.
In arguingforthis personalliberty,however,upper-classliberalshad deliv-
ered most of the propertylessinto the hands of a new master-the market
throughwhichtheysold theirlaborand boughttheirbread. At thesame time
that the spiritof "possessive individualism"-to use C. B. MacPherson's
insightfulphrase-shattered institutionalresponsibilityfor social survival,
developments in theeconomyseparatedmostworkersfromtheirtoolsor their
access to land. Withoutthese,theywereforcedto sell theirlabor. Since only
throughthese transactionscould people feedthemselves, the unseenmarket
replacedthe visibleand personalauthorityof the previousera.
Contemporariesrecognizedthis coercivepower of the market.In I641,
HenryRobinsonhad defendedhigherfoodpricesbecause the"Husbandman
would herebybe broughtto a frugalldyet or stirrdup to become more
industrious."Likewise,farmerscould "dischargea rackrentby multiplying
the fruitsthereofthroughindustry."53 Evaluatingthe effectsof a poll tax,
Pettyadduced an added benefitfromthe factthat it encouragedmen with
manychildrento set them"to some profitableemploymentupon theirvery
firstcapacity,out of the proceed whereof,to pay each childe his own Poll-
52 ofEnglishtradeundertheprotectionist
discussionofthe repatterning
For an interesting impulsesee
Ralph Davis, "English ForeignTrade, 1700-1774,"Economic HistoryReview,2d ser., 15 (1962), 294-95.
63 HenryRobinson,Englands in TradesEncrease(London, 1641),7-8.
Safety,

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 Ideologyand Theory 513

money."54Francis Gardner put the low wage argument in a nut shell: "The
Poor, if Two Dayes work will maintain them, will not work three: and our
Manufactures are never so well wrought as, in a time of dull Trade, when we
pay less for Workmanship, and yet the Poor live as well then as in time of
greatest Plenty, if they have but a full stroke of Work."55
The efficacyof the market as an implement of control in a technically free
economy depended, however, upon whether it was a buyer's or a seller's
market. As John Locke commented, mechanics and apprentices lived such a
"hand-to-mouth" existence that they were forced to accept food for wages
rather than starve.56Another writer feared their excessive freedom and de-
scribed the poor withina fifty-mile radius of London as idle and surly and will-
ing to work only "if two days pay will keep them a week." Others suggested
an excise tax on food and drink to make the poor work a full week.57Against
this background the danger of a consumption formula foreconomic growth
can be assessed better: it threatened the most effectiveformof class discipline
in a liberal society. The capitalistic organization of the economy could force
men and women on to the labor market since that was the only place where
they could earn the means of subsistence, but the amount of labor they were
forced to sell depended upon the wage rate.
The employers' need to control the labor forcereveals the incompatibilities
between liberalism and capitalism. Liberalism asserted the right of each
person to the enjoyment of himselfand the fruitsofhis labor. It did not matter
whether laborers were predisposed toward leisure or consuming. But the
economic growth which the capitalistic system promoted, required a disci-
plined and expandable work force. Leisure preferencescould be as inhibiting
to growthas archaic Poor Laws. Employers did not seek conditions ofpolitcal
and moral freedom for the working class. In fact, as they well perceived,
transportingworkersto centers of employmentwas much more efficientthan
relyingupon necessitous, but free,workersto go where thejobs were.58While
much has been made of the congruence between freedomand capitalism, it
was the freedomof propertyowners fromsocial obligations which was critical
to capitalistic growth in the seventeethcentury. Ideas which promoted free
choice among the poor were inherentlydangerous to the entrepreneurs.The
writers who extolled the advantages of domestic spending in the fightover
Indian imports implied that human behavior could be shaped by the impulse
to consume, but such optimistic reliance upon envyand emulation must have
appeared inadequate to the task of controllinglaborers described as idle and
surly and willing to work only iftwo days pay would keep them a week. Since
54 [Petty],A Treatiseof Taxes,43. See also Thomas Manley, Usuryat Six PerCent.Examined, andFound
Unjustly Charged(London, 1669),24-25.
56 [Gardner],SomeReflectionsona Pamphlet, 16.
58 JohnLocke], SomeConsiderations oftheLowering
oftheConsequences ofInterest(London, 1692),34.
57 The TradeofEngland Revived;andtheAbusesThereof (n.p., 1681),8. See also E. P. Thompson,
Rectified
"Time, Work-Discipline, and IndustrialCapitalism,"PastandPresent,no. 38 (1967),56-97; KeithThomas,
"Work and Leisure in Pre-IndustrialSociety,"ibid.,no. 24 (1964), 61-62.
"8Sir Josiah Child, A New Discourse of Trade(London, 1693),67; [Petty],A Treatiseof Taxes,48-49;
Robinson,EnglandsSafety, 44-45.

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514 joyce Appleby

the old social justification for ordering all economic relations had been de-
stroyed in the fight to make property private and property-owners free,
economic theory had to supply the reasons for statutoryregulations.59This
was the role which the balance-of-trade dogmas played in the eighteenth
century.
The critical differencebetween Adam Smith's theory of economic growth,
which was anticipated in the closing years of the seventeenth century, and
that of the mercantilists was the constructive value given to consumption.
This constructive value in turn rested upon the assumption that all men
wished to maximize their market power because that and that alone offered
an avenue of self-improvement.Although Smith's sympathies lay strongly
with the savers and investors,the propensityto consume provides the linchpin
for his whole system.60Externally, it creates the effectivedemand which calls
forthproduction systems large enough forspecialization and division of labor.
Internally,the drive to truck and barter-to buy and sell-directs individual
energies toward the market and away from other human satisfactions. So
axiomatic is it to Smith that self-improvementwill be fulfilledthrough eco-
nomic activitythat he does not even entertain ideas about alternate means to
improve oneself, much less alternate goals. One improves through market
power, but market power rests upon producing power. The more one pro-
duces, the more one can satisfy wants. Since self-improvement,as Smith
defined it, has no natural limit, there is no limit to man's endeavors. In
Smith's model, people as producers and people as consumers act like an
alternating electrical current, throwing a steady flow of impulses into the
economy. The flow can be taken for granted because it came from human
qualities assumed to be universal.
The acceptance of the idea of universal economic rationality was the key
step in the triumph of modern liberalism, because the natural economic laws
depended upon natural modes of behavior. Beforethe laws could be accepted,
the description of human nature supporting them had to be credible. Histori-
cally, however, before economic rationality became a learned pattern of
response, explicit control was necessary to secure working-class discipline.
The laboring poor had to be managed. The spendthriftwith a feast or famine
mentalityhad to be transformedinto the shrewd saver, and the saver had to
become an orderly,but compulsive, investorand consumer. Market thinking
could be relied upon only after the variety of forces influencing personal
preferences in the use of time and wealth had been ruthlessly narrowed to
one-the likelihood of gain. This radical reductionism was the essence of
59 For Edward Coke's role in endowingeconomic freedomwith a constitutionalsanction see David
Little,Religion, Order,and Law (New York, i969), 203-17, 243-46; Barbara Malament, "The 'Economic
Liberalism' of Sir Edward Coke," Yale Law Review,76 (1967), 1321-58; Donald 0. Wagner, "Coke and the
Rise of Economic Liberalism," EconomicHistoryReview,6 (1935), 30-44.
oftheproduceroughtto
60 "Consumptionis the sole end and purposeof all production;and the interest
be attendedto, only so faras it may be necessaryforpromotingthat of the consumer.The maximis so
perfectly thatit would be absurdto attemptto proveit." Adam Smith,AnInquiry
self-evident, intotheNature
and Causes of the Wealth of Nations (New York, 1937) [originally published in 17761, 625. For Smith's
ambivalenceon the subjectof consumption,comparethisquotationwiththoseon ibid., 321-25.

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 Ideologyand Theory 515

Smith's economic rationality. The economically rational person was the one
who subverted all other drives to the economic one of gaining more power in
the market.
During the first part of the seventeenth century when invested capital
moved England toward a marketeconomy, only the vanguard ofentrepreneurs
operated as economic rationalists. To them, the rest ofthe society represented
a problem demanding external control and direction. To meet this challenge,
moreover,they relied upon a model of economic growth which obscured the
possibilitythat the extension ofeconomic rationalism to the workingclass was
either desirable or possible. Rather the economic irrationalityof the poor was
assumed; the solution was to train them up to habits of work. When the
writersin the closing decades of the seventeenthcenturyproposed unleashing
the acquisitive instinctsof all classes, theywere proposing a route to economic
growth fraughtwith perils. The idea of self-improvementthrough spending
implied genuine social mobility. The assertion that "the meaner sort" could
and should emulate their betters suggested that class distinctionswere based
on little more than purchasing power. The moral implications of growth
through popular spending were even more suspect. Unlike the work ethic
which called upon powerful longings forself-disciplineand purposeful activ-
ity, the ethic of consumption rested upon a moral base so shallow as to
threaten the whole complex of conventional religious precepts. Calvinism had
joined an ancient Christian ascetic impulse to a modern reorganization of
work; the psychology of consumption offerednothingmore than a calculating
hedonism.
The moral anemia of appeals to consume was inextricably tied up with
questions of control. Liberalism had posited man's freedom and responsi-
bility. Capitalism required unrelenting personal effortin the market place.
The two could meet only ifthe poor, like the rich, were convertedto possessive
individualism and economic rationality.Until this transitionhad been made,
class discipline needed the support of economic theories bolstered by religion
and patriotism. When capitalism and freechoice werejoined by Adam Smith,
they were compatible because Smith could theorize froma human model in
which the drive for economic self-improvementpredominated. This concep-
tion of man was the antithesis of freedom, for it presumed a compulsive
market response. In recommending the democratization of consumption in
the I69os, the proponents of a spending model of economic growth were
revealing for the first time the tensions that lay beneath the values and
sensibilities associated with the producing and consuming sides of capitalism.
Only when economic rationalism had become internalized by the working,as
well as the investing,class could liberal economics support the onus of its
amorality. The ideology of mercantilsim in the meantime blunted the forceof
new ideas.

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