HOW THEORY CAME TO ENGLISH CLASSICAL ECONOMICS*

The confidently theoretical method of English classical economics is traced to the Enlightenment's struggle to resolve the disputes between rationalism and anti‐rationalism which had dominated the 17th century. It is argued that, in an attempt to resolve these disputes, several Enlightenment authors, including David Hume and Dugald Stewart, sought to unite empiricism with the notion of law‐like universe by arguing that economic laws are no more than general facts apparent from everyday life. This position, by denying that theory had any connection with the hypothetical, the instrumental or the abstract, blurred the distinction between theory and fact, and taught Classical economists to see their theorising as fact. This position thereby gave the Classical economists licence to pursue their theoretical speculations, free from any doubts or uncertainties about their theorising.