William Petty - Economic Works and Theories: Overview

Economic Works and Theories: Overview

Before discussing Petty's economic theories, it is important to point out two crucial influences in his life. The first is Thomas Hobbes, for whom Petty acted as personal secretary. According to Hobbes, theory should set out the rational requirements for ‘civil peace and material plenty’. As Hobbes had centered on peace, Petty chose prosperity.

Secondly, the influence of Francis Bacon was profound. Bacon, and indeed Hobbes, held the conviction that mathematics and the senses must be the basis of all rational sciences. This passion for accuracy led Petty to famously declare that his form of science would only use measurable phenomena and would seek quantitative precision, rather than rely on comparatives or superlatives, yielding a new subject that he named political arithmetic. Petty thus carved a niche for himself as the first dedicated economic scientist, amidst the merchant-pamphleteers, such as Thomas Mun or Josiah Child, and philosopher-scientists occasionally discussing economics, such as John Locke.

He was indeed writing before the true development of political economy. As such, many of his claims for precision are of imperfect quality. Nonetheless, Petty wrote three main works on economics, Treatise of Taxes and Contributions (written in 1662), Verbum Sapienti (1665) and Quantulumcunque concerning money (1682), all refreshingly concise. These works, which received great attention in the 1690s, show his theories on major areas of what would later become economics. What follows is an analysis of his most important theories, those on fiscal contributions, national wealth, the money supply and circulation velocity, value, the interest rate, international trade and government investment.