He was the only son of Sir James Steuart, Solicitor General for Scotland under Queen Anne and George I, and was born in Edinburgh. After graduating from the University of Edinburgh he was admitted to the Scottish bar at the age of twenty - four.

He then spent some years on the Continent, and while in Rome entered into relations with the Young Pretender, Charles Edward Stuart. He was in Edinburgh in 1745, and so compromised himself that, after the battle of Culloden, he found it necessary to return to the Continent, where he remained until 1763. It was not until 1771 that he was fully pardoned for any complicity he may have had in the rebellion. He died at his family seat, Coltness, in Lanarkshire.

In 1767 he published Inquiry into the Principles of Political Economy. It was the most complete and systematic survey of the science from the point of view of moderate mercantilism which had appeared in England and indeed the first full - fledged economics treatise to appear anywhere. Also the German philosopher Hegel recognized that book and wrote a comment about it in the year 1799. Although often regarded as part of the Scottish Enlightenment which produced David Hume and Adam Smith, Steuart's economics hark back to the earlier Mercantilist era.

Mercantilism was the school of thought that held that a positive balance of trade was of primary importance for any nation and required a ban on the export of gold and silver. This theory led to high protective tariffs to maximize the use of domestic resources, colonial expansion and exclusivity of trade with those colonies. British attempts to follow the mercantilist ideas led to the four Anglo - Dutch navigation wars and the American colonials wars of 1776 - 1781 and 1812. Additionally in 1815, Britain adopted the high tariff, called the corn laws on all imported wheat at the suggestion of mercantalist advisors. Debate over the corn laws would be harsh and would dominate the political discussion and occupy all British governments until the corn laws were repealed in 1846.

At the level of any individual sales transaction, merchantilism held that profit was developed at the point of the sale. Steuart held that profit was a mere "surcharge" upon alienation (sale) of the commodity. Steuart was not a pure mercnatilist, however, he believed in a "scientific form of mercantilism." Steuart held that all profit arose from the seller "overcharging" the buyer in any single sales transaction. However, Steuart did allow that the "profit" obtained through exchange would "fluctuate" with the rise and/or fall in demand. Still like all good merchantilists, Steuart's eye remained on the exchange as the creator of profit and he recognized no value in a commodity before the sale.

Steuart was one of the last representatives of the merchantilist school of economic thought. More accurately, while on the Continent, Steuart had imbibed the sophisticated Enlightenment Mercantilism that was in the air — particularly, German Neo - Cameralism -- which combined a legal - statist approach with a "natural" approach to economics. Although a promoter of old fashioned export subsidies and import tariffs, Steuart added several elements that tied this in with a more general theory of economic development. Unlike the old Mercantilists, he recognized Richard Cantillon's "population - subsistence" dynamics. He also introduced the concept of diminishing returns to land. Steuart juggled two interesting theories of price — a long run labor theory of value and a short run "demand - and - supply" theory. Indeed, Steuart was among the first to introduce the term "equilibrium". Thus, Steuart was an important forerunner of both the Classical and Neoclassical schools in many respects. Steuart also provided one of the more able statements of the real bills doctrine of money.

Although the work appears to have been well received its impact was overshadowed by Smith's Wealth of Nations that was published only nine years later. It is interesting to note that Adam Smith never quotes or mentions Steuart's book, although he was acquainted with him. It has been argued that Smith avoided Steuart arguments because they would have undermined his Utopia. Moreover, the attacks on Mercantilism in the Wealth of Nations appear to have been mainly directed against Steuart. As Smith appears to have thought that Steuart's conversation was better than his book, he probably wished to keep clear of controversy with him.

Steuart's book was received much more favourably a century later by the members of the Historical school of economics.

This Sir James Steuart was descended from another Sir James Stewart, knight, an Edinburgh merchant, a staunch Presbyterian, who supported Charles II in the British civil wars of 1642 - 1660. This Sir James died in 1681, having made enough money to purchase landed estates for his sons; three of those sons were prominent enough to have their families receive the title of baronet after the Glorious Revolution of 1688: Sir Thomas Steuart of Coltness, the first son; Sir James Steuart of Goodtrees, Lord Advocate, the fourth son; Sir Robert Steuart of Allandale, the youngest of the seven sons; two of these baronetcies were eventually held by the subject of this article. The Lord Advocate, Sir James Steuart of Goodtrees, was grandfather to the subject of this article; his father, also Sir James Steuart, was the eldest son of the Lord Advocate, and rose to be Solicitor General for Scotland.

The third Sir James Steuart of Goodtrees, the subject of this article, inherited his baronetcy and estates at the age of fourteen; he was also to acquire much of the possession of his cousins, the senior line of Steuarts. Sir Thomas Steuart of Coltness, had married twice: to Margaret Elliot, his step - mother's daughter, and then to Susan, the sister of Sir William Denham, 1st Baronet of Westshield, Master of the Mint for Scotland, and had fourteen sons by them. His eldest son had sold the estate and mansion (but not the title) of Coltness to his uncle, Sir James Steuart, the Lord Advocate, in 1712. The subject of this article is therefore often called of Coltness, since it was his house; he sold the estate of Goodtrees after he returned from France.

By that time, the last surviving son of Sir Thomas Steuart had inherited the Coltness baronetcy, from his father; he had also inherited the property and baronetcy of Denham of Westshield through his mother; he styled himself Sir Archibald Steuart Denham, Baronet. When Sir Archibald died, in 1773, the baronetcy of Coltness and the Steuart property passed to Sir James Steuart; the Denham title and property passed to the last heir of the Denhams, Sir Archibald's half - nephew on his mother's side, who took the style of Sir William Lockhart Denham. When he died, three years later, in 1776, the Denham baronetcy became extinct; he also left his property, including the estate of Westshield, to Sir James Steuart, who then assumed the name of Denham, although he was not descended fom.

For the last four years of his life, therefore, he was Sir James Steuart Denham, Baronet, of Coltness and Westshield. His major book and his posthumous collected works were published as by Sir James Steuart; economic literature also calls him Sir James Steuart Denham.

He had one son, another Sir James Steuart Denham, born in 1744, before he went to France. That son, who called himself Denham in England and Steuart in Scotland, edited his father's complete works, was a Member of Parliament, and an officer, Colonel of the Scots Greys. He was promoted full General, and lived to be ninety - five, ranking officer in the British Army. On his death, both baronetcies went to a cousin, a grandson of a younger son of the Lord Advocate, who died in 1851, since when they have been dormant.

Reliable sources differ on when and to whom the Goodtrees baronetcy was given. It was in honour of the Lord Advocate, but while the Oxford Dictionary of National Biography twice says it was conferred on him in 1695, the Complete Baronetcy says it was given to his son, the future Solicitor General, in 1705, on the occasion of the son's marriage, in the father's lifetime. The chief significance of this question is the numbering of the baronets; it is not inconceivable that both grants occurred.