Mid-eighteenth century Scotland was both the birthplace and cradle of political economy. By the 'birth of political economy' is meant the re-integration of knowledge corresponding to the emergence of modern civilized societies under the influence of the Scottish Enlightenment. Separate and distinct from moral philosophy, politics or jurisprudence, a new learning called political economy was first systematized in the academic 'Triangle' made up of three Scotsmen: David Hume, Sir James Steuart and Adam Smith. Two distinct systems of political economy are involved in this 'Triangle', i.e. Steuart's The Principles of Political Economy (1767, Political Economy hereafter) and Smith's The Wealth of Nations (1776, WN hereafter). It goes without saying that their common precursor was Hume's Political Discourses (1752), an epoch-making work that analysed the emerging modern societies of both Scotland and England using the evolutionary and comparative methodology of social science. Besides accepting Hume's view of civilized society characterized by industry, knowledge and liberty, Steuart proposed a new science of political economy to supersede Hume's understanding of economic activities in a free and competitive market. In a sense, Smith did the same as an economist. It has generally been believed that he wrote WN with the strong but implicit aim of refuting Steuartian political economy.
When historians of economic thought talk of the 'Scottish Triangle', there is a tendency for them to imagine an isosceles triangle with Smith firmly located at the apex. 1 But is this configuration really valid? In other words, is no one but Smith the genuine founder of political economy? Evidence suggests that this is not necessarily the case. In particular, James Steuart should be recognized as the 'political economist' who created the first system of monetary economics. It was Steuart who initially made political economy stand on its own legs, independent from politics and jurisprudence. Smith followed close behind him in this respect. In this chapter I will show that the features in theory and practice of their economic viewpoints are not so much mutually exclusive-mercantile (protective) or classical (liberal)-as alternative to each other. 2
It should be mentioned that the three compatriots faced a common unre-