This book has emphasised the critical importance of honour in foundational liberal thought, explaining how a feudal propensity for social distinctions can preserve civic virtue within an emerging inward-looking liberal order. Chapters 1 and 2 examined the institutional and intellectual context of early eighteenth-century public and private finance in France to help illuminate the entry point to this important facet of Montesquieu's theory of moderation. His response to John Law's economic system in particular reveals a preoccupation with questions concerning the relationship between commerce and liberty, and the role of the nobility in market society (Chapter 1). In examining these themes, Montesquieu observed certain trends in eighteenth-century political economy which threatened to turn commerce into a handmaid of despotism: despite it being a source of political moderation, commerce itself needed to be moderated.

While Montesquieu appreciated the existing nobility's publicminded mores, he equally valued the increasing quality of life delivered by modern commerce. It is in this context that he revises James Harrington's republican project (Chapter 3). In a post– Financial Revolution climate, Harrington's republican vision was too utopian in its failure to recognise tangible commercial threats to political freedom. Eighteenth-century financial innovation may have helped stimulate commerce and reduce the public debt. However, it opened new avenues leading to political despotism, unidentifiable through a mid-seventeenth century lens. More specifically, the ‘monied interest’ threatened to supplant the principal source of France's political education, namely, the noblesse de robe, whose intermediary check on the sovereign was indispensable for France's liberty. John Law's System undermined France's intermediary bodies, threatening to eliminate the nobility's economic lifeline. Having considered these material circumstances, Montesquieu's theory of moderation proposes a modified republican vision suited to a modern commercial context.

To approximate republican virtue, a nation's institutions, manners and mores needed to correspond with the new commercial reality. Even though Montesquieu described both republics and monarchies as models of free, moderate government, in the face of financial innovation, he deemed the honour-loving archetype more viable for France and most of its continental European neighbours. In light of this realisation, his works are preoccupied with how legislators could harness existing monarchical institutions in a manner that allows a sense of personal honour to translate into genuine virtuous behaviour.

A number of canonical figures who deeply admired Montesquieu were equally committed to protecting the integrity of the public sphere from commerce. Jean-Jacques Rousseau, Benjamin Franklin, John Adams, Alexis de Tocqueville and, more recently, Hannah Arendt each revised Montesquieu's theory of free, moderate government to make political honours available to a broader citizenry. However, they disagreed over the degree to which the commercial and political worlds needed to be kept separate. One will find a divergence on this question in the political thought of Adam Ferguson and Adam Smith who were considered heirs to Montesquieu in their immediate contexts. Both Scottish philosophers embraced modern commerce as the organising principle of eighteenth-century Europe. However, like Montesquieu, they were not unconcerned with the civic challenges posed by the new commercial order. In considering how Ferguson and Smith approximate political virtue in their respective works, this chapter delineates how each thinker appropriated Montesquieu's moderation to a more egalitarian, burgeoning commercial world of mass production and capital accumulation – one marked by the new civic challenges that advanced commercial specialisation introduced to European nations.

During the early eighteenth century Europe was rattled by a series of financial shocks, stemming from the impropriety of government and economic actors who grew increasingly interdependent as governments relied on private lenders for imperial expansion. New institutional arrangements redefined the relationship between class and power and led to original notions of political justice, inconceivable in the pre-modern economic era. Political thinkers increasingly placed emphasis on how existing notions of freedom could be squared with bringing unwieldy and chaotic economic situations under political control. Some concerned themselves with how commerce stifled the civic character, while others held a more optimistic view, suggesting commerce was a source of political stability that engendered certain forms of virtue commensurate with eighteenth-century political exigencies. Montesquieu sought to reconcile these two positions throughout his political works.

This chapter builds on the existing literature which considers how the failure of John Law's System and its reverberations shaped Montesquieu's political thought. Its primary aim is to trace the tangible roots of Montesquieu's ambiguity over the relationship between commerce and liberty – a principal theme in this book's subsequent chapters.

The first part reconstructs the context of John Law's System. Here, I explain how the confluence of France's existing monetary and fiscal regime and its experimentation with new modes of high finance during the War of the Spanish Succession, ripened the conditions for Law to introduce his System to the Regency following Louis XIV's death in 1715. The second part examines Montesquieu's and Law's competing conceptions of political moderation, highlighting the former's abiding preoccupation with France's titled nobility. Here, readers will discover why Law had become such a worrisome figure. The Scottish financier's System undermined France's remnant honour-yielding institutions, which, in Montesquieu's view, were indispensable for counteracting the Bourbon Crown's despotic tendencies.

This chapter examines how Montesquieu, Hume and Smith adapted and theoretically responded to the gradual financialisation of government that was taking place on both sides of the Channel. First, it considers Montesquieu's response to the fiscal and monetary crises that plagued France between the time of Louis XIVs death in September 1715 and the collapse of John Law's System in November 1720. Correspondingly, Montesquieu sought to preserve France's delicate social and institutional arrangements, to safeguard against the excesses associated with new forms of high finance. His concern was that Louis XIV's territorial wars and the Crown's ministers responsible for its fiscal and monetary management were transforming France into an empire of conquest, anchored by a culture of odious luxury, reminiscent of the Later Roman Empire and, more recently, contemporary Spain. It then examines David Hume's essays on political economy, which echo Montesquieu's concerns about the gradual financialisation of free, European governments. Hume observed how innovations in high finance engendered a culture of odious luxury that atrophied the population's industrious character. Echoing Montesquieu, he feared that the paper money economy would disturb European nations’ social distinctions, whose maintenance he deemed necessary for preserving free, moderate government in the modern commercial world. Finally, I compare Adam Smith's response to the collapse of the South Sea Bubble in England to Montesquieu's response. Despite Montesquieu's abiding preoccupation with England throughout his writings, he is conspicuously silent in the face of a touchstone event in British economic history, which coincided with the failure of Law's System. In juxtaposing Montesquieu's preoccupation with France's noblesse de robe – a symbol of aristocratic valour in the modern commercial age – with Hume's and Smith's preoccupation with Britain's gentry – a symbol of commercial meritocracy – this chapter highlights a moderate perspective in the eighteenthcentury commerce and virtue debates, which embraces commerce but harnesses existing honour-yielding institutions to produce a civic republican counterpoise to its excesses.

This book points to a perennial problem in liberal modernity: how to balance commercial considerations with the public interest. We do not need to look further back than the subprime crisis and the subsequent Great Recession to see the practical results of an ethos that assumes an unproblematic reconciliation of these ends. An illustrative example is the establishment of Fannie Mae and Freddie Mac, US government–sponsored corporations created by the Roosevelt administration in response to the United States’ banking crisis during the 1930s. Such initiatives show how moral hazard may become a concern under any regulatory system. Despite their benevolent origins and effectiveness in stabilising banks during the Great Depression, these institutions provided private financiers and bankers with a disincentive to judiciously consider risk in their dayto- day lending practices. They inadvertently encouraged financiers to provide loans for the purposes of reselling them to larger institutions that securitised them and assumed the entire risk. The resulting economic fallout eroded citizens’ trust in public institutions. What is more, the subsequent piecemeal erosion of the Dodd–Frank regulatory regime in the United States – established in 2010 to rein in the excesses of Wall Street – has fed into a culture of populism, reflected by the hostility of underprivileged classes towards public and private elites whose indiscretions became an acknowledged cause for their overarching financial distress. Moderate Liberalism and the Scottish Enlightenment considers this dilemma through the lenses of Enlightenment-era political philosophers who met similar challenges during capitalism's nascent stages. Their works contain elegant theories of moderate government, germane to our own thinking about political morality in liberal modernity.

Montesquieu is well known as a paragon of the ‘Moderate Enlightenment’ – a theorist of constitutional balance. However, underexplored affinities between him and key figures in the Scottish Enlightenment can enlarge our understanding of their moderation. They highlight that it is not a merely legalistic notion but a deeper vision of how commercial ends and public spiritedness may be harmonised. In recounting how Montesquieu and his Scottish contemporaries responded to the civic challenges associated with Europe's gradual financialisation, I recapture a conceptual space in the famous eighteenth-century commerce and virtue debates. I present Montesquieu as a pivotal figure in these debates.

The commonalities between David Hume and Montesquieu are striking when one considers their biographical and intellectual trajectories. They both inherited considerable wealth and belonged to the lower branches of the elite class in their respective societies. Moreover, they shared a distaste for legal scholars in spite of family circumstances which nudged both Hume and Montesquieu towards careers in law. Their shared scepticism concerning the legal profession accords with their deeper philosophical resentment towards contractual reasoning in politics. This is most discernible in their respective understandings of modern liberty, each of which hinges on the interrelationship of institutions that emerged from historical evolution. Yet, their analyses lead them to different understandings. Montesquieu formalises ‘principles’ (honour and virtue) as active springs to explain how liberty and political order arose in aristocracies, democracies and monarchies, whereas Hume interprets these outcomes as fortunate products of historical actors fighting over interests.

Moreover, both thinkers shared a vision of politics that rejected their republican contemporaries’ appeals to emulate ancient polities. They instead emphasised the need to adapt politics to a modern, more humane, commercial world, although on a different basis in the two cases. Whereas Montesquieu frequents the halcyon days of France's feudal past to illustrate the nobility's indispensable role for checking the despotic tendencies of the Bourbon Crown and checking commercial activity, Hume viewed such feudal remnants as hindrances to liberty and social stability. He instead shared Harrington's admiration of the gentry, observing its salutary role in political and economic life. Despite Montesquieu and Hume's disagreements over what they deemed the most viable intermediary bodies for anchoring the political community, both shared the belief that contemporary England led its European neighbours in adapting to the modern commercial order.

Hume's and Montesquieu's respective analyses of Britain's constitution are constitutive of their broader political visions, but in neither of their works should their reflections on the island nation be considered sui generis. Both thinkers were constitutional pluralists. They observed that liberty, order and the impartial administration of law and justice – that is, free, moderate government – emerged in multiple European contexts.

A meaningful tension lies throughout Montesquieu's works. In The Spirit of the Laws, he states that virtue, or the love of the laws and the homeland, is a principle contrary to human nature, which requires constant self-renunciation. As such, it is an unreliable passion for anchoring the political community. Yet, he bemoans contemporary citizens’ smallness of stature compared to the ancients. He laments ‘The things that were done in those governments that we no longer see and that astonish our small souls.’ In My Thoughts, Montesquieu more poignantly writes: ‘When one thinks about the pettiness of our motives, the baseness of our means, the avarice with which we seek out vile rewards, the ambition – so different from love of glory – one is astonished at the difference in spectacles, and it seems that, ever since those two great peoples ceased to exist, men have lost a few inches in stature.’ Notwithstanding Montesquieu's nostalgia for the classical politics of Athens and Rome, his emphasis on stature reveals an important philosophical insight, which intimates the possibility of fulfilling greater human capacities that once flourished during antiquity. If Montesquieu rejects the classical republican vision of politics on both practical and theoretical grounds, as we have seen in his rejection of James Harrington's political project, what are the more human qualities of past ages that could be revived? The following two chapters will examine Montesquieu's and his Scottish counterparts’ response to this question.

Scholars have argued that Montesquieu doubted the practicality of loftier forms of honour and virtue in a world of small souls. They unearth a theory of honour which aims to approximate Mandevillean virtue, whereby individuals pursue their private interests, unwittingly serving the public interest.

In 29.19 of The Spirit of the Laws, Montesquieu situates James Harrington (1611–77) among the utopian thinkers in the history of political thought. He writes: ‘Thomas More, who spoke rather of what he had read than of what he thought, wanted to govern all states with the simplicity of a Greek town. Harrington saw only the republic of England, while a crowd of writers found disorder wherever they did not see a crown.’ Harrington attempted to establish the best regime beyond human realisation rather than the most practical regime in The Commonwealth of Oceana (1656). Montesquieu doubted the possibility of modelling a modern commonwealth after ancient republican principles for two reasons. First, Harrington's vision of politics inadvertently demanded an impractical degree of self-denying virtue out of citizens. Second, Harrington's republicanism insufficiently addressed the particularities of modern commercial life, whose challenges only became amplified following Europe's financial revolutions. Montesquieu's criticisms reflect his broader warning to moderate legislators that they ought to avoid rationalist system-building approaches towards attaining political goods. Ironically, his counsel echoes Harrington's own insistence that politics must be grounded in historicity, in prudent empiricism rather than rational design or ‘geometry’. This begs the question: what shrouded Harrington's perception of England's liberty?

With these considerations, one might defend Harrington's socalled ‘utopianism’ on two fronts. First, his republican vision corresponded with a unique historical situation. Henry VII's assault on the feudal peerage in late fifteenth-century England kick-started a socioeconomic transition where the balance of property shifted in ‘the people’s’ favour. In addition, the beheading of Charles I in 1649 turned England into a de facto republic to the extent that re-establishing a monarchy appeared as the less likely alternative at the time. For Harrington, these events brought forth an opportunity to do away with ‘modern prudence’, which he associated with the early medieval/feudal tradition, and to establish a commonwealth based on ‘ancient prudence’, which he associated with Sparta, Rome, Athens, the Hebrew Republic, and with contemporary commercial republics such as Switzerland and Holland.

I wish to begin with a brief biographical note to provide a more human introduction to a scholarly project which developed out of an abiding preoccupation with the promise and betrayal of elites in the modern commercial world. Having been raised in a middle-class suburb of Montreal, Quebec, I had the good fortune to attend an elite prep school throughout my childhood. I was afforded this privilege by dint of coming of age before a prolonged period of quantitative easing, when the personal sacrifices of my first-generation Canadian, restaurant-owning parents were still sufficient for giving their children access to an education typically reserved for the Brahmin classes of Montreal's anglophone community. My family's fortunes took a turn for the worse after a disgruntled restaurant competitor with connections to an underworld – which keeps itself tethered to industries that operate with large cash flows – made a nearly successful attempt on my, my father's and my brother's life. The incident generated spectacular news headlines, causing unwarranted reputational damage to my family and an extended period of severe financial hardship, marked with bankruptcies and painful home foreclosures initiated by predatory lenders. Despite these challenges, I continued attending the same prep school thanks to a series of ostensibly imprudent financial decisions, justified by an assured expectation that the social capital I was accruing would yield long-term bountiful returns.

The sudden change of material circumstances had me reconciling a culture that is sometimes rough around the edges with one whose ‘commercial’ manners I came to appreciate, recognising how they could help lubricate the personal frictions I constantly encountered with the chaotic situations that followed my family's misfortune. What I had come to value most was not the economic ladder that my privilege gave me access to, but a moral orientation – to be kind, not to bully, to stand out of respect when a superior entered the room, to say grace before meals, to respect the rules of fair play in competitive sports, and to maintain a healthy contempt for money – the last of which I naively internalised having not yet absorbed Adam Smith's warning about emulating the nobility without acquiring the virtues requisite for achieving nobility.

We have already seen that Montesquieu and Hume were sensitive to how commercial innovation threatened their respective nations’ distinctions of rank. However, Hume did not share Montesquieu's propensity for the formal titles that distinguished non-commercial from commercial elites – a subtle disagreement that reflects their historically divergent understandings of liberty. In interrogating Montesquieu and Hume's disagreement over the role of the nobility in the modern world, this chapter provides a more textured account of the place of honour and its function within their political philosophies. First, I compare Montesquieu's and Hume's genealogies of modern liberty to demonstrate the importance of honour in their works. I show how Montesquieu traces the origins of modern liberty in France to Saint Louis's judicial reforms, whereas Hume follows James Harrington, tracing the origins of modern liberty in Britain to Henry VII's property reforms. The discussion then points to how their historically grounded theories of politics distinctly pacify honour by channelling it within the commercial world. I argue that, in contrast to Hume, who categorically privileged commercial honour over ancient and feudal modes, Montesquieu had deeper reservations concerning a political culture whose ‘principles’ were borne via commerce alone.

A number of scholars have identified important ideological, epistemic, and philosophical affinities between Montesquieu and Hume, rightly shining a spotlight on how their assessments of England constitute the two philosophers’ political visions. These discussions often focus on their disagreements concerning the impact of climate on human beings. However, if climate was so central to Hume in his critical reading of Montesquieu's Spirit of the Laws, why was this topic not mentioned among Hume's friendly ‘quibbles’ in their 1749 epistolary exchange? Inversely, Montesquieu applauds Hume for his essay ‘Of National Characters’, which most directly refutes the former's theory of climatic determinism. These considerations have given recent readers pause during their examinations of Montesquieu and Hume's affinities.

Despite Montesquieu's penchant for considering physical factors that shape a nation's general spirit, both he and Hume agree that commerce, communication and moral laws, rather than climate, have a greater effect on European national characters.