When Dugald Stewart (1753–1828), the renowned Professor of Moral Philosophy at the University of Edinburgh, gave this alarming analysis of Britain's current state to his students in the academic year of 1802–3, he hit the nail squarely on the head. Britain was facing an unprecedented crisis caused by the French Revolutionaries’ promise of universal liberty and equality, a threat now exacerbated by the rise of Napoleon. The outlook for the heavily indebted and overextended British Empire seemed bleak. A long and hugely expensive war brought the country close to bankruptcy and revealed the increasing inequality caused by burgeoning industrialisation. Radicals like Thomas Paine and William Godwin promised Britons an end not only to monarchical despotism but also to war and poverty, while independence movements like the United Irishmen mobilised labourers and farmers to fight for representation in government and independence from London. With insurrection, misery and mob rule looming, the survival of the British Empire was at stake.

Given the immense challenge that the 1790s posed to Britain's survival, strategies to fulfil the needs of the people while maintaining the state were urgently needed. The established Enlightenment science of legislation neither offered an explanation for the failure of the French Revolution nor did it proffer solutions on how to translate concern with the long-term evolution of society and morals into practical political reforms. A new answer was provided by the ‘science of political economy’ that was beginning to take shape in Scotland. In 1799, Dugald Stewart took the radical step of separating out political economy from his course on moral philosophy. Economic subjects such as population growth and commerce had been part of political discussions and academic curricula before, but it was Stewart who brought these disparate topics together and united them within one philosophical framework. He shaped a coherent body of knowledge that was recognisable as ‘political economy’, a compound term seldom used before 1800.