Perhaps the chief antagonist in the eighteenth century of the social contract theory was David Hume (1711–1776), the father of social psychology. According to Hume, the origin of society was not in a contract arrived at by intellectual processes; it was instinctive. Man is a social animal. At the basis of this sociability lies the sex instinct, which resulted in the establishment of the family. The sex instinct is strongly supported by the sentiment of sympathy, which also is innate, and which may develop into intelligent co-operation. Man is not entirely self-centered; he takes pleasure in other people’s pleasures and suffers when others are in pain, or the victims of disease, or are dying.

Sympathy, like the sex instinct, is a genuinely fundamental element in human nature and in society. However, the combination of sympathy and the sex instinct is not strong enough to support the family in either its simple or complex stages from the attacks upon it that are made by inherent human selfishness. Hence, social and political organizations are necessary to hold the selfish impulses and interests of mankind in check. Intellectual control of society thus becomes necessary and consciously recognized. Environment alone does not cause people in a given community to act alike. It is imitation, primarily, which operates to bring about group conformity.[XI-14]

Man in a large measure is governed by interest. It is impossible for men to consult their interests “in so effective a manner as by a universal and inflexible observance of the rules of justice, by which alone they can preserve society, and keep themselves from falling into that wretched and savage condition, which is commonly represented as the state of nature.”[XI-15]

According to the contract theory, people expect protection and security. If they meet with tyranny and oppression, they are freed from their promises and return to that state of liberty which proceeded the institution of government. But Hume maintained that if people entered into no contract and made no promises, government would still be necessary in all civilized societies. The obligation of submission to government is not derived from any promise of the subjects.[XI-16]

Adam Ferguson (1723–1816) wrote an Essay on the History of Civil Society and The History of the Progress and Termination of the Roman Republic. He argued that social institutions and social convenience lead to inherent sociability, and pointed out that competition and conflict are vital to social development. Thomas Paine (1737–1809) asserted that man is inherently social and that social organization is a natural development.

The natural rights theory and the resultant individualism not only repudiated their false derivative, the social contract concept, but also wrestled with considerable success with the socio-economic concept of mercantilism. Mercantilism was a system of regulating industrial enterprise by governments in order to build up strong nation-states. Mercantilism reached its strictest form in France in the writings of Colbert (1619–1683). It prevailed in Europe during the sixteenth and seventeenth centuries, and the first four decades of the eighteenth century. It was a system which grew out of feudalism and the city-state type of society. It operated to bring together towns and cities into national unities. Under feudalism, the town had regulated industry for its own advancement and against the welfare, perchance, of neighboring towns. Mercantilism served to unite towns and to create in townspeople a national loyalty.

Under mercantilism, the nation entered upon the task of regulating industry and finance so as to build a strong state. A favorable balance of trade was sought in order to add to the bullion within the state. High tariffs were enacted, which sometimes defeated the intended purposes. A dense population was favored as a means of securing cheap labor, and hence of furthering manufacture, which in turn would develop foreign trade and bring in the coveted bullion—the heralded strength of a nation.

In the eighteenth century, mercantilism in France and England met defeat in the contest with the laissez faire theory, with which the names of the physiocrats and of Adam Smith are inseparably connected. It often fathered too stringent regulations. Instead of supporting national ends, mercantilistic measures frequently furthered private interests. Mercantilism, however, played a strong part in building up the concepts of national unity and loyalty.

In the German states and Austria, cameralism represented the ideas for which mercantilism stood in England, France, and elsewhere in Western and Southern Europe. Among the leading cameralists were Seckendorf, Horing, Justi, and Sonnenfels. Cameralism obtained a far deeper hold upon the German states than mercantilism did, for example, in England. The laissez faire philosophy was never able to make a deep inroad upon cameralism. In fact, the laissez faire philosophy did not receive serious consideration in the German states before 1800, and did not strike deep. National self-sufficiency, paternalistic control, minute regulation of internal affairs, rearing of large families, and subordination of the welfare of the state—these are the concepts which ruled in Germany.

Adam Smith (1723–1790), primarily an economist and often referred to as the father of political economy, exerted a profound influence upon social thought. He coupled a modified natural rights theory with a doctrine of sympathy; he spoke for the natural rights of the individual, of the poorer classes in society, and of the smaller nations. He vigorously attacked mercantilism with its system of minute regulation of individuals. He objected to promoting unduly the interests of one class of men in a country, for by so doing, the interests of all other classes in that country and of all persons in all other countries are harmed.[XI-17] He pointed out the fallacy of building a nation of shopkeepers, for in so doing the government of such a nation will be unduly influenced and controlled by the interests of shopkeepers. The interests of other classes will be more or less ignored. Adam Smith protested against Great Britain’s methods of regulating the American colonies. To prohibit the American colonies from making all they could of every part of their own produce or from employing their stock and industry in the way that they judged most advantageous to themselves, was “a manifest violation of the most sacred rights of mankind.”[XI-18]