of study which could be pursued apart from the investigation of other political phenomena, Adam Smith laid the foundation of modern political economy. It was in this way that he differed from all his predecessors, so far as I have been able to examine them. There are two different sides from which we may obtain confirmatory evidence in regard to this characteristic feature of his work. We may note (i) the manner in which he treats previous writers, and (ii) the reception of his book hy his contemporaries.
Firstly, the whole force of his criticism both of the Mercantilists and of the Physiocrats depends on the assumption that they were discussing economic problems in the more definite sense in which he himself regarded them. But this assumption, which is never explicitly stated, was wholly untrue. The English Mercantilists were considering how the power of this country might be promoted relatively to that of other nations. The object of their system was not absolute progress anywhere but relative superiority to our political neighbours. Their commercial jealousy followed from political distrust; and Adam Smith appears to admit that from this point of view, their reasoning was right. 'The wealth,' he says, 'of neighbouring nations, however, though dangerous in war and politics is certainly advantageous in trade. In a state of hostility it may enable our enemies to maintain fleets and armies superior to our own, but in a state of peace and commerce, it must likewise enable them to exchange with us,[1] to our mutual advantage. As the Mercantilists were avowedly writing from a political standpoint they were bound to consider how to guard against these dangers. Adam Smith in criticising them persistently refuses to take their point of view. He assumes that they were trying to devise means for increasing wealth, or as they would have said, riches, as an end in itself, while every page of their writing showed that they were doing nothing of the kind. As a consequence, his vigorous attack misrepresents them strangely. They had attached political importance to treasure, but it would be easy to show that they rather underrated than overrated the importance of gold for commercial purposes and as an element of riches. And so with all the other points of their policy; they did not imagine they increased the riches or wealth of the country by the restrictions on colonial trade, but they did think that they increased its power, and the events of the eighteenth century went a long way to prove they were right.
Similarly with the Physiocrsts; when Quesnay spoke of agri-
- ↑ Wealth of Nations, IV. iii. Nicholson's edition, 201.
