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Sir James Steuart on the origins of the exchange economy


  • José M. Menudo

    () (Department of Economics, Universidad Pablo de Olavide)


This paper examines James Steuart’s explanation of the emergence of the exchange economy. An initial hypothesis holds the decisive influence of a plan designed and implemented by merchants. Our proposal evokes the importance, acknowledged by Steuart, of the construction of institutions, involving designs aimed at achieving self-interest purposes. It is argued that “commercial” subordination explains how individuals become dependent on a new institutional organisation. Finally, we conclude that Political Œconomy is a science of the artificial that seeks to understand the functioning of non-natural mechanisms and to create instruments that the statesman adapts to the needs and of objectives individuals..

Suggested Citation

  • José M. Menudo, 2014. "Sir James Steuart on the origins of the exchange economy," Working Papers 14.08, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:14.08

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    References listed on IDEAS

    1. Herbert A. Simon, 1996. "The Sciences of the Artificial, 3rd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691914, September.
    2. William McColloch, 2011. "MarxÂ’s Appreciation of James Steuart: A Theory of History and Value," Working Paper Series, Department of Economics, University of Utah 2011_09, University of Utah, Department of Economics.
    3. Redman, Deborah, 1996. "Sir James Steuart's Statesman Revisited in Light of the Continental Influence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 43(1), pages 48-70, February.
    4. Sarasvathy, Saras D., 2003. "Entrepreneurship as a science of the artificial," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 203-220, April.
    5. Steuart, James, 1757. "An Inquiry into the Principles of Political Economy," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number steuart1757.
    6. Anthony Brewer, 1997. "An eighteenth-century view of economic development: Hume and Steuart," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 4(1), pages 1-22.
    7. A. S. Skinner, 1963. "Sir James Steuart: International Relations," Economic History Review, Economic History Society, vol. 15(3), pages 438-450, April.
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    More about this item


    James Steuart; development; institutions; subordination; economic system.;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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