Editing David Hume (section)

=== Contributions to economic thought ===
[[File:David_Hume_and_Adam_Smith_statues,_Edinburgh.jpg|thumb|Statues of David Hume and [[Adam Smith]] by David Watson Stevenson on the [[Scottish National Portrait Gallery]] in Edinburgh]]
Hume expressed his economic views in his ''Political Discourses'', which were incorporated in ''Essays and Treatises'' as Part II of ''Essays, Moral and Political''.<ref name=":1" /> To what extent he was influenced by Adam Smith is difficult to assess; however, both of them had similar principles supported from historical events.<ref name=":1" /> At the same time Hume did not demonstrate concrete system of economic theory which could be observed in Smith's ''[[The Wealth of Nations|Wealth of Nations]]''. However, he introduced several new ideas around which the "classical economics" of the 18th century was built.<ref name=":1" /> Through his discussions on politics, Hume developed many ideas that are prevalent in the field of economics. This includes ideas on [[private property]], inflation, and [[international trade|foreign trade]].<ref>Robbins, Lionel ''A History of Economic Thought: The LSE Lectures'' edited by Medema and Samuels. Ch 11 and 12</ref> Referring to his essay "[[Of the Balance of Trade]]", economist [[Paul Krugman]] (2012) has remarked that "David Hume created what I consider the first true economic model."<ref>{{cite web|last=Krugman|first=Paul|title=How We Know The Earth Is Old|url=https://krugman.blogs.nytimes.com//2012/11/20/how-we-know-the-earth-is-old/|work=The New York Times|access-date=21 November 2012|date=20 November 2012}}</ref>

In contrast to [[John Locke|Locke]], Hume believes that private property is not a natural right. Hume argues it is justified, because resources are limited. Private property would be an unjustified, "idle ceremonial," if all goods were unlimited and available freely.<ref>Richards, H. [https://books.google.com/books?id=9Kw5vLbYq-4C&dq=hume+idle+ceremonial&pg=PA322 ''Understanding the Global Economy''], Peace Education Books, 2004, p. 322.</ref> Hume also believed in an unequal distribution of property, because perfect equality would destroy the ideas of thrift and industry. Perfect equality would thus lead to impoverishment.<ref>Hume, David. 1751. ''[[An Enquiry Concerning the Principles of Morals]]''.</ref><ref>Stewart, J. B. 2014. [https://books.google.com/books?id=MTYABAAAQBAJ&dq=hume+private+property&pg=PA164 ''Opinion and Reform in Hume's Political Philosophy'']. Princeton: [[Princeton University Press]]. pp. 163–164.</ref>

David Hume anticipated modern [[monetarism]]. First, Hume contributed to the theory of [[Quantity theory of money|quantity]] and of interest rate. Hume has been credited with being the first to prove that, on an abstract level, there is no quantifiable amount of nominal money that a country needs to thrive. He understood that there was a difference between [[Real versus nominal value (economics)|''nominal'' and ''real'' money]].

Second, Hume has a theory of causation which fits in with the [[Chicago school of economics|Chicago-school]] "[[black box]]" approach. According to Hume, cause and effect are related only through correlation. Hume shared the belief with modern monetarists that changes in the supply of money can affect consumption and investment.

Lastly, Hume was a vocal advocate of a stable [[private sector]], though also having some non-monetarist aspects to his economic philosophy. Having a stated preference for rising prices, for instance, Hume considered [[government debt]] to be a sort of substitute for actual money, referring to such debt as "a kind of paper credit." He also believed in heavy [[tax]]ation, believing that it increases effort. Hume's economic approach evidently resembles his other philosophies, in that he does not choose one side indefinitely, but sees gray in the situation<ref>{{Cite journal|last=Mayer|first=Thomas|year=1980|title=David Hume and Monetarism|journal=The Quarterly Journal of Economics|volume=95|issue=1|pages=89–101|doi=10.2307/1885350|jstor=1885350}}</ref>