David Hume

Here am I who have written on all sorts of subjects calculated to excite hostility, moral, political, and religious, and yet I have no enemies — except, indeed, all the Whigs, all the Tories, and all the Christians. A highly influential philosopher in Western thought, David Hume (1711-1776) was particularly well known for being an early and ardent skeptic and empiricist.

He was rebuffed by many of his peers during his age because they suspected him of being an atheist.

Historian
Hume viewed the writing of history as a form of philosophy, and his 6-volume book, History of England, brought him to his initial fame and wealth. Notably, Hume recharacterized the then-common view of the Tudors as reasonable and rational rulers to one of being a pack of petty tyrants, particularly Henry VIII. According to Hume, Henry was violent, cruel and impetuous. Henry was so much governed by passion, that nothing could have retarded his animosity and opposition against Rome, but some other passion, which stopped his career, and raised him new objects of animosity. Though he had gradually, since the commencement of his scruples with regard to his first marriage, been changing the tenets of that theological system, in which he had been educated, he was no less positive and dogmatical in the few articles which remained to him, than if the whole fabric had continued entire and unshaken. And though he stood alone in his opinion, the flattery of courtiers had so enflamed his tyrannical arrogance, that he thought himself entitled to regulate, by his own particular standard, the religious faith of the whole nation.

The Humean restorative
As a young man, after a decade of intense study, Hume fell-ill with the disease of the learn’d. His physician prescribed for him—what we may now call—the Humean restorative, to be taken on a daily basis (unless otherwise specified):
 * 1 “anti-hysteria” pill (for modern analogues see Benzobarbital),
 * 1 pint of Claret,
 * and 10 miles of horse-riding.

Conception of the self
Hume did not believe in a unified and continuous "self"; rather he believed that the self is an illusion generated through a chain of perceptions that result in a feeling of personal identity.

Atheism
Hume was considered to be an atheist by many of his contemporaries, but exactly how much of an atheist he was is debated. The consensus seems to be that he was at least irreligious, though he did not reject the possibility of a God as some of his contemporary atheist philosophers did — bringing him closer in agnostic levels. He proposed instead we should be skeptical of the claims made by any religions, and that most modern religions were continuations of ancient religions created by people who proposed invisible agents that did not in fact exist. His supposed atheism became an issue throughout his life as he was denied opportunities and even charged with heresy, a charge he beat when his clerical friends came to his defense by declaring, ironically, he couldn't be a heretic because he wasn't a Christian.

Hume's law
One of his most famous proposals is the is-ought problem, which states that you cannot derive an "ought" from an "is." That is to say, you cannot go from some truth value about what "is" true, to saying what you "ought" to do or what "ought" to be true. To bridge the gap you must propose and then defend an additional ethical principle.

For instance, it is not enough to say, "Eating fruit is healthy, therefore you ought to eat fruit." You must also add something so it appears like, "Eating fruit is healthy, and if you want to be healthy then you ought to eat fruit," or, "Eating fruit is healthy and you should be healthy therefore you ought to eat fruit." Notice that both of these additions now make the assumption that you should be or want to be healthy, and if you agree with this it is a more convincing argument. It does, however, also give more to defend, as you may be forced to justify why you should want to be healthy.

The problem of induction and causal skepticism
Hume was one of the most famous skeptics of induction and causality. Hume starts with his distinction between "matters of fact" and "relations of ideas" and his empiricist ideas about how humans reason. Hume claims that we gather knowledge about the world through the senses, so, psychologically speaking, we are reliant on inductive reasoning. However, he questions whether this knowledge can be truly justified because he sees induction itself as logically unjustifiable. Induction cannot be justified through deductive reasoning because the latter consists merely of relations of ideas, i.e. ones that are true by definition. Induction also cannot be justified inductively, because that would be circular reasoning. Thus, Hume concludes, we unjustifiably attempt to predict the future from past events. Perhaps the most famous illustration of the problem of induction was given not by Hume, but by Bertrand Russell. Russell imagines a chicken on a farm. The farmer feeds it every day, so the chicken assumes that this will continue indefinitely. One day, though, the chicken has its neck wrung and is killed.

The problem of induction leads Hume to be a skeptic about causality: There is a hard and a soft interpretation of Hume's view on causality; the harder, metaphysical interpretation states that causality itself does not exist. The softer, epistemological interpretation states that causality may exist, but we have no justification for believing it.
 * If induction cannot be justified, we can't definitively make statements about causality. According to Hume, we have no direct access to knowledge about causality.
 * We can only observe regularities in the natural world. That is, we only think that event X causes event Y because we always see Y following X. But...
 * If induction is not justified, then we have no reason to assume that nature is uniform. The only reason we have to make this causal connection is because we have always seen Y come after X.

Political economist
A stauch critic of and big friend of Adam Smith, In 1752, Hume published his Political Discourses, where he advanced many fiscal and monetary policy concepts as well that are still up to date 250 years after his death. These essays were also important to the development of the methodology and epistemology of economics. As a reputed historian and empiricist, Hume brings lots of historical examples to prove his points, and while his qualitative approach fell out of favor to a more quantitative approach during the last century, the economic science remains highly empirical. According to Paul Krugman, one of his articles, On the balance of trade, represents the first attempt in history to to create an economic model.

Ironically, considering his enduring popularity, Hume starts his first essay on political economy, "On commerce" dividing mankind in two classes, that of shallow thinker and that of obstruse thinkers (i.e. people that actually come up with new ideas, and even if we disagree with them, their opinions at least enlarge our views and make us think about our own beliefs). Unsurprisingly, Hume thinks he belongs to the second group, and he pledges the readers to stay with him even if they disagree with his ideas on this essay and on the others.

On commerce and trade
In two of his political essays, "Of commerce" and "Of jealous trade", Hume explains why everyone profits from free trade, claiming that "where an open communication is preserved among nations, it is impossible but the domestic industry of every one must receive an increase from the improvements of the other". According to him, countries can copy each other, resulting in a strenuous competition between nations and continuous technological advance.

On money
In one of his most important essays, appropriately called "Of money", Hume argued that, in the short term, a boost of the money supply can also boost the economy, but in the long run, prices are proportional to money. In other words,, it's different from wealth, and a higher supply of money will only cause inflation in the long term (of course, Hume didn’t use these technical terms, as they only came to being in the 20th century).

On interest rates
Another groundbreaking essay by Hume is “Of interest”. According to the mercantilist ideas, the interest rate could be lowered by a higher money supply or a favorable balance of trade. Hume explained again that a higher money supply might result in higher wages, but also result in higher prices, and as a result, a higher interest rate in the new equilibrium. For Hume, money is nothing but the representation of labour and commodities, and its main purpose is to estimate them. To explain his point, Hume gives the following example: "For suppose, that, by miracle, every man in GREAT BRITAIN should have five pounds slipt into his pocket in one night; this would much more than double the whole money that is at present in the kingdom; yet there would not next day, nor for some time, be any more lenders, nor any variation in the interest. And were there nothing but landlords and peasants in the state, this money, however abundant, could never gather into sums; and would only serve to increase the prices of every thing, without any farther consequence. The prodigal landlord dissipates it, as fast as he receives it; and the beggarly peasant has no means, nor view, nor ambition of obtaining above a bare livelihood. The overplus of borrowers above that of lenders continuing still the same, there will follow no reduction of interest. That depends upon another principle; and must proceed from an increase of industry and frugality, of arts and commerce."

Once again, for us moderns this is the theoretical basis of the, which states that the general price level of goods and services is directly proportional to the amount of money in circulation. Hume’s ideas had a major impact especially on the prominent economist and leading scholar on money neutrality and Quantity Theory of Money, who quoted “Of money” and “Of interest” on his Nobel lecture.

On public debt
In one of his longest essays, called “Of public Credit”, Hume claimed that it’s very tempting for governments to run deficits, as public spending is very popular, while taxation and budget cuts aren’t. The debt can stimulate the economy in the short run, but once again, its results in the long term are disastrous, only leading to inflation and, inevitable to a painful, recessive economic adjustment, with higher taxes and interest rates. Once again, many of his ideas can be found in leading scholarship centuries after his death: the idea of why governments tend to run on deficits was advanced during the twentieth century by another Nobel Prize winner,, one of the fathers of the theory, while his views on fiscal responsibility can still explain a considerable part of the economic history of the United States in the 1970s and 1980s.

On the balance of trade
On his essay Of Balance of Trade, Hume advanced a concept known as. According to Hume, money flowing to a nation is not, unlike the Mercantilist idea, the cause of welfare, but it's consequence. To illustrate his point, Hume gives as the following thought experiment:

In other words, pretty much nothing would change if the all the supply of money in Britain was destroyed, as the amount of capital in the country would remain the same, and money from the rest of the world would follow it. If you want to have specie, you need wealth first. This does not mean, however, that Hume supported deflation, as it's clear from his other essays that he considered deflation just as bad as inflation.

So, what is the key to opulence according to Hume? Once again the answer is commerce.

On taxes
Hume's views on his essay "Of taxes" nonetheless didn't age well, as he believed that taxation should be on consumption. According to Hume, this would prevent the government from raising taxes too much because of what we now call the Laffer curve. What Hume didn't know is that the Laffer curve is mostly wrong. Taxation on consumption is very regressive, and result in income inequality.

On public goods
Just like Adam Smith, despite his support for capitalism, Hume wasn't a free market fundamentalist. On his Treatise of Human Nature, Hume advanced the concept of public goods, and how markets often fail to provide them because of the :

In other words, according to Hume, there are certain goods that cannot either be provided or financed without taxation. That's because users can't be barred from accessing or using them, even if they don't to pay for them.

Hume’s Fork
‘Hume’s Fork’ refers to his heroic attempt to demarcate worthwhile fields of inquiry—mathematics and empirical science—, from any work that purports to transcend these limits by establishing matters of fact a priori—Kant’s synthetic a priori, theology, metaphysics etc. When we run over libraries, persuaded of these principles, what havoc must we make? If we take in our hand any volume; of divinity or school metaphysics, for instance; let us ask, Does it contain any abstract reasoning containing quantity or number? No. Does it contain any experimental reasoning concerning matter of fact and existence? No. Commit it then to the flames: for it can contain nothing but sophistry and illusion.