Shifting Capital

Mercantilism and the Economics of the Act of Union of 1707

Aida Ramos

• Publisher: Palgrave Macmillan
• Year: 2018
• ISBN:
  9783319964034
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

When the Act of Union was passed in 1707, Scottish parliament was dissolved and the nation's capital became London. While the general public balked at the perceived unfairness of the treaty, the majority of Scottish ministers seemed satisfied with its terms. This book offers an explanation of how that outcome came about. By examining the influence of a particular strain of mercantilist thought, Ramos demonstrates how the negotiations preceding the passage of the Act of Union were shaped by ideas of value, wealth, trade and power, and, accordingly, how the model of positive balance was used to justify the necessity of the Act.

Utilizing contemporary evidence from the English and Scottish ministers involved, this book explores alternative arguments regarding the Union, from before 1707 and in early Scottish political economy, thus highlighting the differing economic and political views that have persisted between England and Scotland for centuries. With twenty-first century discontent leading to the Scottish independence referendum and arguments that persist in the wake of the Brexit decision, Ramos produces timely research that investigates ideas of protectionism that feed into mercantilist economic thought.

© The Author(s) 2018

Aida RamosShifting CapitalPalgrave Studies in the History of Economic Thoughthttps://doi.org/10.1007/978-3-319-96403-4_1

Begin Abstract

1. Introduction

Aida Ramos¹

(1)

University of Dallas, Irving, TX, USA

Aida Ramos

Abstract

This chapter discusses the importance of examining the Act of Union of 1707 as a manifestation of mercantilist economic thought. Placing the Union in the context of economic ideas sheds further light on both the contents of the treaty and the actions of the English and Scottish Parliaments. The definition of mercantilism used in the book, a system of theory and policies that seeks to maximize national power, is examined. Key aspects of English mercantilism employed in legislation before and during the negotiations—warfare without military conquest, the idea of surplus, and particular notions of wealth, power, trade, and transmutation—are introduced. How these are connected to the concept of structural violence is examined. The outline of the rest of the book is also discussed.

Keywords

Act of Union, 1707Political economyMercantilismStructural violenceScotlandEnglandEighteenth centuryImperialismGreat BritainPowerDevelopment

End Abstract

1.1 Economics and the Union

On May 1, 1707, a rather splendid scene unfolded, described by Sir John Clerk of Penicuik, as Queen Anne and her retinue of “at least 3 or 400 coaches,” processed to St. Paul’s Cathedral to celebrate the Union. Inside St. Paul’s:

The Bishops and Peers sat in galleries on her Majestie’s right hand, and the late members of the House of Commons of England, with such as had been chosen to represent the Commons of Scotland in the first British Parliament, were on her left hand…¹

…I observed a real joy and satisfaction in the citizens of London … The whole day was spent in feastings, ringing of bells, and illuminations, and I have reason to believe at no time Scotsmen were more acceptable to the English than on this day. (1892, pp. 68–69)

Bells also rang in Edinburgh on the morning of May 1. However, rather than songs of joy, the bells of St. Giles Cathedral tolled the bittersweet tune “Why Should I Be Sad on My Wedding Day?” There were no public celebrations. Henry Maule (1707) reported to the Earl of Mar, “There is nothing so much taken notice of here today as the solemnity in the south part of Britain and the want of it here.” Although the Act of Union had passed both the English and Scottish Parliaments and been ratified, the public opinion in Scotland was very much against the treaty. As evinced by the telling tune at St. Giles, Scotland had had a wedding but it was unclear whether it was to be either a happy or fruitful union.

The Act of Union of 1707 joined the parliaments and full administration of both nations into one Great Britain. For Scotland, the implications of the Act were far-reaching politically and economically. The Union not only dissolved the Scottish Parliament, and reduced the number of new ministers, but also moved the administration of the country from Edinburgh to London. As part of Great Britain, the Scottish people were subject to a new system of taxation and liable for the debt that England had accrued through the seventeenth and early eighteenth centuries. While it is undeniable that Scotland also gained economic benefits from the opening of trade with England and its overseas territories and the development of the domestic fisheries and manufacturing guaranteed by the treaty, the benefits were slow to manifest, and it is equally undeniable that the treaty also generated economic losses for Scotland in the first four decades after its passage (Whately 1989, pp. 169–176).

Public protests in print and in person both during and after the treaty negotiations showed that the public sentiment was against the Union, as analyzed in Bowie (2007) and Gibson (1988), and shown in the contemporary accounts that shall be used throughout of Scottish ministers George Lockhart (1714) and John Clerk (1993 and 1892), and English observer/propagandist Daniel Defoe (1799). There was only one public address presented to parliament in favor of the legislation.² And yet the majority of Scottish ministers present voted in favor of it.³ Were the votes in favor of the Union a matter of bribery and a corruption of interests on the part of the ministers, as argued by some scholars, such as Shaw (1999), MacInnes (1990), Riley (1964), and Ferguson (1977)? Or were they a matter of confrontation of the belief that Scotland’s economy could not prosper without closer alliance with England, as Smout (1969, 1964, and 1963) argues, and thus Union was the better choice than continuing to engage in commercial hostilities? Or was it simply a matter of seeing the Union as a way to secure the promises of the Revolution settlement and to secure Scotland from a return to Jacobitism? This book offers an alternative explanation of both the construction of the Union and the Scottish ministers’ support for it.

The Union has been explored from a variety of viewpoints: as a fight against universal monarchy and against centrism, as a purely political exercise, as an inevitability due to geography and history (Colley 1992), as a betrayal of principle (Riley 1964; Ferguson 1977), and so on, but never yet as an exercise of mercantilism, the dominant set of economic theories of the time. The political and military reasons why the English pursued the Union are known and have been extensively explored (MacInnes 1990, 2007; Shaw 1999).⁴ However less explored, especially within the economics literature, are the economic theory behind the language and actions taken as well as those called for in the time preceding the union negotiations, the drafting of the treaty, and its passage and implementation. Although the economic history of Scotland from before and during the Union has been detailed, most notably by T.C. Smout (1963, 1964, and 1969), R.H. Campbell (1964), T.M. Devine (1985), and Christopher Whately (1989), the economic theory that underlay the Union and that guided the drafting of the articles, from the context of the history of economic thought, has not. This is a curious omission given that the dominant contemporary English economic discourse, mercantilism, is well known, and that the period that follows, the Scottish Enlightenment, led to the development of political economy as a discourse. And yet there is a dearth of material that reflects upon the influence of economic theory on the creation of the Union treaty and its passage.^5,6

While the economic history of Scotland and the Union reports on the economic phenomena of times and places, providing rich context for discussion of policy and theory, it does not necessarily investigate the economic thinking that underlies the institutions of the times. The history of economic thought can provide a deeper analysis of both Scottish and English institutions involved, whether those institutions are formal (legislation regarding property and commerce) or informal (opinions, customs, and habits). In addition, it analyzes how those institutions are formed and unformed, and how they are changed and influenced over time or at one particular point in time. Thus, I wish to provide an analysis of the Act of Union from the perspective of the history of economic thought.

Scholarly treatments of the Union have tended to separate contemporary economic thought from analysis of the political aims of the Union’s authors. An understanding of particular aspects of mercantilist thought sheds light on both the construction of the Union and the choices of its authors and negotiators. I argue that the Act of Union was created within the context of seventeenth-century English mercantilist thought that both informed and was formed by English state policy goals to remove any perceived external threats, whether military, political, or commercial, and focused on expansion through trade and the absorption of resources through colonization. Viewing the Union as merely about the expansion of trade, or the removal of the threat of a Stuart restoration and military conflict on the northern border ignores an important aspect of the intellectual history of the period, of how the prevalent economic ideas influenced the formation of policy. I do not argue that the other interpretations of the Union as a political or security measure are incorrect, but only that they are incomplete. Analyzing the actions of both the Scottish and English minister...

Table of contents

• Cover
• Front Matter
• 1. Introduction
• 2. The Political and Economic Contest and Context: Scotland and England Before the Union
• 3. Beyond Trade: Mercantilist Ideas of Dependency, Value, and Transmutation and Justification of Union
• 4. Trick or Treaty: The Negotiation and Articles of Union in the Context of Mercantilist Ideas
• 5. Balancing Act: The Equivalent, Political Arithmetic, and Mercantilist Structural Violence
• 6. Shifting Capital
• 7. Unintended Consequences: Scottish Political Economy as a Reaction to Mercantilism
• Back Matter