On Hume, Coordination Costs, and the Political Influence of the very Wealthy

I am reading Max Skjönsberg’s fascinating (2021) The Persistence of Party: Ideas of Harmonious Discord in Eighteenth-Century Britain (Cambridge). Skjönsberg (Florida) calls attention to a passage in one of Hume’s essays (1741) “Whether the British Government inclines more to Absolute Monarchy, or to a Republic.”

After treating Hume as accepting the Harringtonian argument that power follows property — a principle Hume seems to rely on in other places, too (e.g., “Of the Independency of Parliament” par. 5) —, Skjönsberg reads Hume as “amending it” that “less property in a single hand could counterbalance more property in several hands” (p. 135). This idea reminded me of a kind of argument we find in the game theory since Schelling (and also in public choice literature) that concentrated interests can outwit dispersed interests.

So, this had me curious how Hume reasons. I quote:

Those who assert, that the balance of our government inclines towards absolute monarchy, may support their opinion by the following reasons. That property has a great influence on power cannot possibly be denied; but yet the general maxim, that the balance of one depends on the balance of the other, must be received with several limitations. It is evident, that much less property in a single hand will be able to counterbalance a greater property in several; not only because it is difficult to make many persons combine in the same views and measures; but because property, when united, causes much greater dependence, than the same property, when dispersed. A hundred persons, of 1000l. a year a-piece, can consume all their income, and no body shall ever be the better for them, except their servants and tradesmen, who justly regard their profits as the product of their own labour. But a man possessed of 100,000l. a year, if he has either any generosity or any cunning, may create a great dependence by obligations, and still a greater by expectations. Hence we may observe, that, in all free governments, any subject exorbitantly rich has always created jealousy, even though his riches bore no proportion to those of the state. Crassus's fortune, if I remember well, amounted only to about two millions and a half of our money; yet we find, that, though his genius was nothing extraordinary, he was able, by means of his riches alone, to counterbalance, during his lifetime, the power of Pompey as well as that of Cæsar, who afterwards became master of the world. The wealth of the Medici made them masters of Florence; though, it is probable, it was not considerable, compared to the united property of that opulent republic.

Before I get to my main point, the proposition that “in all free governments, any subject exorbitantly rich has always created jealousy” (‘jealousy’ means here insecurity or fear) is a running thread through several of Hume’s writings. (A ‘free’ government is one with mechanisms of self-rule, that is species of democracy.) He returns to it, for example, in his “Of the Balance of Power” (1752; recall this post), and (recall) he hints at it in (1751) Second Enquiry, EPM 5.11)

Be that as it may, there are really three interlocking arguments in the quoted paragraph. First, if one squints, here one might indeed discern a kind of coordination cost argument (“it is difficult to make many persons combine in the same views and measures.”) But, second, this coordination cost really rests on a kind of natural diversity posit. What causes the coordination difficulty is a pluralism about means (“measures”) and ends (“views.”) This is not a view I usually associate with Hume, so I thought it surprising. (It’s also not the route into game theory.)

There is also another, third kind of argument altogether. Concentrated wealth can create outsized dependence in others (so-called retainers and beneficiaries) through strategic gifts and donations. The outsized element, however, is itself caused by other people’s hopes (“expectations”) to benefit from the wealthy individual’s expenditures. That is, the apparent extraordinary wealth of a single person makes that person the object of people’s desires and longings.

One may think that ‘apparent’ here is unwarranted. After all, both the King of England and Crassus were seriously wealthy by any standards. But I suspect Hume’s real point is that what really matters is that the visible (and so apparent) concentration — Kings live in palaces and have other non-disguised visible markers of wealth — of immense wealth is sufficient to create a kind of cognitive bias on the rest of society such that due to a kind of projection in our imagination of expected benefit people naturally fall in line with the means and ends of the very wealthy individual.

When he was younger, Hume himself didn’t think this expectation was always required for the same effect: “we respect the rich and powerful, where they shew no inclination to serve us, but also when we lie so much out of the sphere of their activity, that they cannot even be suppos'd to be endow'd with that power.” (Treatise 2.2.5.10, SBN 361) And that this effect is produced by a kind of sympathetic identification with their agreeable life: “where we esteem a person upon account of his riches, we must enter into this sentiment of the proprietor, and that without such a sympathy the idea of the agreeable objects, which they give him the power to produce, wou'd have but a feeble influence upon us.” (Treatise 2.2.5.7, SBN 360)

As an aside, in reflecting on the very same phenomenon, Adam Smith decided that our cognitive bias functions slightly differently:

Our obsequiousness to our superiors more frequently arises from our admiration for the advantages of their situation, than from any private expectations of benefit from their good-will. Their benefits can extend but to a few; but their fortunes interest almost every body. (TMS 1.3.2.3, p. 52.)

In Smith’s moral psychology, admiration does not require any expectation of benefit nor the mediation of sympathy. It is usually an aesthetic emotion produced by what is “great and beautiful” (EPS 1.1), but apparently can also be occasioned by our awareness, even without sympathetic identification, of how the very wealth might themselves benefit from a situation.

Be that as it may, if we return to Hume, we can also see discern how the three arguments in the quoted paragraph support each other. Even in a opulent society, where there is great distributed wealth, a singular wealthy individual, who is (say) willing to put his name on buildings and airplanes — Adam Smith uses “glittering” and “gaudy” to describe the type with sarcasm — can achieve much in a democracy if he puts his mind to it not just because the many find it difficult to coordinate on any countermeasures due to the plurality of their interests and ends, but also because he can count on the willing cooperation of many, among the many, who selflessly identify with his wishes and goals in virtue of his glitter. In reflecting on Hume’s analysis here with an oblique glance at the headlines, I have the melancholy thought that among the best friends of democracy we may well have to list those with the least elevated views of ‘the people.’

Of course, the wider essay explicitly teaches, as Skjönsberg notes, moderation and only treats the idea that “the balance of our government inclines towards absolute monarchy” for the reasons just given as one possible future of Britain among many that Hume entertains at arm’s length. But not because he fails to endorse the mechanisms so described; because in his own voice he also thinks “the power of the crown, by means of its large revenue, is rather upon the encrease.”