Profile Major Works Resources

Richard Cantillon, 1680?-1734.

Fascimile of cover of Cantillon's 1755 Essay


Richard Cantillon, acknowledged by many historians as the first great economic "theorist", is an obscure character. This much is known: he was a British subject, an Irishman, who carved out a career in banking in France during the 1710s 

Although there have been many attempts to reconstruct the story of his background from various sources, it has proven contradictory and elusive.  It has been said his family were originally landlords from County Kerry dispossessed of their lands during the confiscations of the 17th C., although they remained well-connected and probably Jacobite.  Young Cantillon is said to have taken French nationality in 1709 and in 1711 might been in the service of James Brydges, Paymaster-General, as financial agent to the British forces in Spain. It only becomes more certain that he moved to Paris in 1714 to launch a career as a merchant banker in the house of a relative (also named Richard Cantillon).  By 1716, Cantillon had either bought his relative out, or launched his own banking house (possibly with financial help from Brydges).  Cantillon got involved early in John Law's schemes, but had little confidence in their success. Cantillon reputedly made a fortune of some twenty million livres by speculating on the collapse of shares in Law's companies in 1720-21, actions which led to multiple lawsuits and even brief arrest by Paris authorities.  Cantillon moved to England thereafter, taking up residence in London.  Cantillon died in 1734 in a fire in his London home - allegedly set by his discharged cook (although there remains speculation that Cantillon set the fire himself, staging his death to escape his lawsuits, and fled abroad - in at least one account, to Surinam).

Cantillon's entire reputation rests on his one remarkable treatise, Essai Sur la Nature du Commerce en Général.  Apparently, the Essai was originally written  circa 1732, probably in English and containing a statistical supplement, but this version has since been lost.  It was translated (probably by Cantillon himself) into French for circulation in manuscript form among his friends.  This French version was published anonymously in England in 1755, some twenty years after his death (publication was probably undertaken by his second cousin, Philip Cantillon).  Two other published versions of this essay exist -  a reprint appended to the 1755 French translation of David Hume's Discours Politiques, and a smaller pamphlet version published by another press in 1756.  Prior to these, excerpts (possibly from the missing English original) were liberally plagiarized by Malachy Postlethwayt in his 1749 Universal Dictionary of Trade and Commerce.

Cantillon's Essai was well-known in Enlightenment France, admired by Vicent de Gournay, cited by the Physiocrats (e.g. Mirabeau, Quesnay and Turgot) and one of the few works referenced by Adam Smith.  It continued to be read in the 19th C. French school.  However, Cantillon's work fell into relative obscurity in the English-speaking world until resurrected and popularized by William Stanley Jevons in the 1880s.

Cantillon was perhaps the first to define long-run equilibrium as the balance of flows of income, thus setting the foundations both for Physiocracy as well as Classical Political Economy. Cantillon's system was is clear and simple and absolutely path-breaking. He developed a two-sector general equilibrium system from which he obtained a theory of price (determined by costs of production) and a theory of output (determined by factor inputs and technology).    He followed up on Petty's conjecture about the par of labor and land, thereby enabling him  to reduce labor to the amount of necessities needed to sustain it and thus making both labor supply and output a function of the land absorption necessary to produce the necessities to feed labor and the luxuries to feed landlords.   By demonstrating that relative prices are reducible to land-absorption rates, Cantillon can be said to have derived a fully-working "land theory of value". [click here for a review of Cantillon's system.]

In determining the natural wage for his model, Cantillon lays out the wage-fertility dynamics ("men multiply like mice in a barn if they have unlimited means of subsistence"), anticipating the theory developed by Malthus in 1798.

Cantillon's careful description of a supply-and-demand mechanism for the determination of short-run market price (albeit not long-run natural price) also stand him as a progenitor of the Marginalist Revolution.  In particular, his insightful notes on entrepreneurship (as a type of arbitrage) have made him a darling of the modern Austrian School. Cantillon was also one of the first (and among the clearest) articulators of the Quantity Theory of Money and attempted to provide much of the reasoning behind it.  

Finally, one of the consequences of his theory was that he arrived at a quasi-Mercantilist policy conclusion for a favorable balance of trade but with a twist: Cantillon recommended the importation of "land-based products" and the exporting of "non-land-based" products as a way of increasing national wealth.

 

  


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Major Works of Richard Cantillon


HET pages:

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Resources on Cantillon

Contemporary

  • Cantillon's signature (from Higgs, 1891 EJ)
  • 1734 London Magazine - notice of fire (May 14), coroner confirms murder (July 24), trial of servants (Sep 18)
  • 1735 Political State - notice of discovery of Cantillon's cook & suicide in Surinam (July, 1735)
  • 1762 memoirs Henri Cochin, at La Tournelle court, 1729/30 case of Cantillon against Jean & Remi Carol (p.52)
  • 1794 Reports of cases in English Chancery court (involving Cantillon as third party): Gage against Bulkeley (1744: p.263), Gage against Bulkeley (1745, p.278), Herbert against Bulkeley (1745: p.296)

19th-20th Century

  • "Cantillon, Richard", in C. Coquelin and G.U. Guillaumin, editors, 1852, Dictionnaire de l'économie politique [1894 ed.]
  • "Richard Cantillon and the Nationality of Political Economy", by W.S. Jevons, 1881, Contemporary Review, p.61 [repr. in Jevons, 1905]
  • "Jevons on Cantillon", 1881, The Economist, Jan 1, 1881, p.14
  • "Cantillon, Richard" in Leslie Stephen & Stephen Lee, editor, 1885-901 Dictionary of National Biography [1908-09 ed]
  • "Cantillon, Richard", in L.B. Say and J. Chailley-Bert, editors, 1897 Nouveau Dictionnaire de l'économie politique [1897 supp..]
  • "Cantillon, Richard", in R.H. Inglis Palgrave, editor, 1894-1901 Dictionary of Political Economy [1901 ed.]
  • "Richard Cantillon", 1891,by Henry HiggsEJ, p.262
  • "Cantillon's Place in Economics", by Henry Higgs, 1892, QJE (Jul),  p.436-56 [js]
  • "Preface" 1892, to (French) reprint of Cantillon's Essai  [p.3]
  • "Review of Cantillon's Essai", by A.C. Miller, 1892, JPE, p.120 [js]
  • Über den Richard Cantillon zugeschriebenen Essai sur la nature du commerce en général mit besonderer berücksichtigung der lehren by Wilhelm Kretzschmer, 1899 [bk]
  • Richard Cantillon: un mercantiliste précurseur des physiocrates by Robert Legrand, 1900 [bk]
  • "The Life and Work of Richard Cantillon", by Henry Higgs, 1931, in English trans. of Cantillon's Essay, [Lib]
  • "Richard Cantillon" by Friedrich A. Hayek, 1931 introduction to 1931 German trans. [English trans. of Hayek's introduction 1985, JLS [mis]]
  • "Richard Cantllon - First of the Moderns", by J. Spengler, 1954, JPE.

Recent

  • "Richard Cantillon – Banker and Economist" by Antoine Murphy, 1983, J of Libertarian Studies  [mis]
  • "Richard Cantillon" by Michael O'Suilleabhain, 1983,  JLS [mis]
  • "Cantillon's Essai: A Current Perspective" by Vincent Tarascio, 1983,  JLS [mis]
  • "Richard Cantillon – A Man of His Time: A Comment on Tarascio" by David O' Mahony,1983,  JLS [mis]
  • "Richard Cantillon and the French Economists: Distinctive French" Leonard P. Liggo, 1983,  J of Libertarian Studies [mis]
  • "The Influence of Cantillon's Essai on the Methodology of J.B. Say: A Comment on Liggio" by Joseph T. Salerno, 1983, JLS [mis]
  • "West's "Cantillon and Adam Smith" : A Comment" by Roger W. Garrison, 1983, JLS [mis]
  • "Was Richard Cantillon an Austrian Economist?", by Robert F. Hebert,  1983, JLS [mis]
  • Richard Cantillon: pioneer of economic theory by Anthony Brewer (1992) - preview
  • Homepage of Antoin Murphy, biographer of Cantillon
  • Richard Cantillon profile at von Mises Institute
  • Excerpt on Cantillon, by Murray Rothbard, 1995.
  • "More on Cantillon as a Proto-Austrian", by Jörg Guido Hülsmann, 2001,  Journal des Economistes et des Etudes Humaines [mis]
  • "The Saga of John Law and Richard Cantillon" by Sean Corrigon, 2004, Mises Daily [mis]
  • "Cantillon for Laymen", by Karen de Coster 2006, Mises Daily [mis]
  • "Cantillon on the cause of the business cycle", by Mark Thornton, 2006, QJAE [mis]
  • "Was Cantillon a Mercantilist?" by Mark Thornton, 2007, JHET
  • "Cantillon, Hume and the Rise of Anti-Mercantilism", by Mark Thornton, 2007, HOPE
  • "Cantillon the Anti-Mercantilist" by Mark Thornton [pdf]
  • "The Origin of Economic Theory: A portrait of Cantillon", by Mark Thronton, 2007 [mis].
  • "Cantillon and the Invisible Hand", by Mark Thornton, 2009, QJAE [mis]
  • "Richard Cantillon: Founder of Political Economy", J.M. Finegold Catalan, 2010, Mises Daily [mis]
  • Cantillon pge at McMaster- includes bibliography on Cantillon
  • "Cantillon" at Wikipedia
 
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