Steuart and Davenant on financing wars

Abstract

James Steuart and Charles Davenant shared a similar view that financing wars are a vital issue for a nation and its economy. Davenant published an Essay upon Ways and Means of Supplying the War (hereafter Essay) in late 16942 during the war with France when there was a pressing question of whether and how England can collect money to continue the war. Steuart prepared much of the latter volumes of the Principles of Political Economy (hereafter Principles) during the seven years’ war and placed war finance at the core of public finance and evolvement of credit in a nation. The approach they took when discussing how to finance the war was also very similar. Hoppit (1996) adequately named Steuart as one of the writers “who explicitly attempted political arithmetic” in the latter half of the eighteenth century3. Steuart and Davenant both regarded “the Art of Reasoning, by Figures, upon Things relating to Government”4 as an effective approach to discussing the economy and public finance. Steuart’s endorsement of political arithmetic makes a decided contrast with Adam Smith who famously wrote: “I have no great faith in political arithmetick”5.