2024 HES PRESIDENTIAL ADDRESS: WAS HUME A MERCANTILIST? FOR SMITH, YES: THE FRIENDLY DISAGREEMENT OF ADAM SMITH AND DAVID HUME ON MONEY

David Hume and Adam Smith were friends, but their friendship does not imply that the two authors shared the same ideas, or should have shared the same ideas. Money is an example of a subject of disagreement between David Hume and Adam Smith that has either been ignored or interpreted as a puzzle, given their friendship. I suggest that Smith did not replicate or cite Hume’s exposition of the quantity of money in his Wealth of Nations because Smith thought Hume was wrong. For Smith, Hume fell into the mercantilist fallacy of considering the accumulation of money as wealth. Rather than accumulating money through market restrictions, as other mercantilists would, Hume advocated the accumulation of money through commerce and hoarding, but Hume’s goal was still the accumulation of gold and silver. Smith saw through Hume’s mistakes and addressed each of them, thus rejecting Hume’s theory of money, while maintaining their friendship.