18th century Irish economist
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  • Richard Cantillon (1680s - May 1734) was an Irish-French economist and author of Essai sur la Nature du Commerce en Général (Essay on the Nature of Trade in General), a book considered by William Stanley Jevons to be the "cradle of political economy". Although little information exists on Cantillon's life, it is known that he became a successful banker and merchant at an early age. His success was largely derived from the political and business connections he made through his family and through an early employer, James Brydges. During the late 1710s and early 1720s, Cantillon speculated in, and later helped fund, John Law's Mississippi Company, from which he acquired great wealth. However, his success came at a cost to his debtors, who pursued him with lawsuits, criminal charges and even murder plots until his death in 1734.

    Reference

    Cantillon, Richard (c.1680-1734) | Encyclopedia of Libertarianism, by George H. Smith, The Encyclopedia of Libertarianism, 15 Aug 2008
    Biographical essay
    "Richard Cantillon, born in County Kerry in Ireland and lived a substantial portion of his life in France, was regarded by many historians of economic thought as one of the truly great early economists. He has been praised in the highest terms: Edwin Cannan referred to him as 'that extraordinary genius,' W. S. Jevons has credited him with having written 'the first treatise on economics,' while F. A. Hayek wrote of him that he contributed more 'really original insights of permanent value' to economics than any other writer before 1776."
    Related Topics: Free Market, Inflation, Prices

    Died

    14 May 1734, in Mayfair, London

    Web Pages

    Richard Cantillon - Online Library of Liberty
    Includes short biography and link to the 1959 edition of the Essai
    "Richard Cantillon, Irish born but living in Paris as a young man, from circumstances became a banker/broker there, and moved in influential, educated social circles. Intrigue, murder, posthumous plagiarism, citations by Adam Smith, rediscovery by William Stanley Jevons a century later, and a stunning work on entrepreneurial risk, money, foreign exchange, and banking from the 1700s, are all pieces of the continuing puzzle that surrounds him."

    Bibliography

    Richard Cantillon - Selected primary works
    List of 12 primary works, effectively editions and translations of the Essai, and ten secondary works

    Articles

    Cantillon for Laymen, by Karen De Coster, Mises Daily, 7 Jun 2006
    Discusses the themes in Cantillon's Essai in general terms, including a short biographical section
    "Cantillon's book was written during an era of mercantilist ascendancy in France. He diverged from that set, mostly because he didn't arrive at his analysis via an unstructured amalgamation of judgments geared toward specific political ends. Rather, he was the first theorist to maintain an 'independent area of investigation — economics — and to write a general treatise on all its aspects.' ... This set Cantillon apart from his politically influential mercantilist counterparts, and has led many scholars, to label him — not Adam Smith — the father of modern economics ..."
    Economic Thought Before Adam Smith: An Austrian Perspective on the History of Economic Thought, Volume 1, by Gregory P. Pavlik, The Freeman, Oct 1995
    Review of Rothbard's Economic Thought Before Adam Smith (note: despite the title, Adam Smith is included in this volume, and the review)
    "It is most informative to note that there were in fact modern general treatises on economics that preceded Adam Smith, the most important being Essai Sur La Nature Du Commerce En General, by the 'gallicized Irish merchant' Richard Cantillon. Cantillon was sound on his analysis of market pricing, providing a sophisticated discussion of consumer demand coupled with supply. He was 'the first to stress and analyze the entrepreneur.' Cantillon's work pioneered 'spatial economics ...' Most importantly, all of this was done some 70 years before Adam Smith, the alleged father of economics."
    Editorial: Turgot and the Battle Against Physiocracy, by Leonard Liggio, Literature of Liberty, 1979
    Editorial essay for volume II, number 1; discusses those who influenced Turgot and those influenced by him
    "As a teacher, Gournay had familiarized Turgot with the economic analysis of Richard Cantillon (1680–1734). From Cantillon's Essai sur la nature du commerce en général, Turgot derived his capital theory; the necessity of capital for entrepreneurs; the general interdependence of all sectors of economic processes; as well as the concept of development by capital accumulation and investment, crucial for the idea of progress. ... He derived this early version of the time preference theory of interest from Cantillon's insight that interest rates were related to the scarcity or abundance of savings."
    From John Law to John Maynard Keynes, by Steve H. Hanke, GlobeAsia, 1 Feb 2009
    Compares the proposed "mega-Keynesian stimulus package" offered as solution to the 2008 financial crisis to John Law's actions in 18th century France
    "Cantillon's second fortune was made on exchange-rate speculation. Cantillon spotted a fatal flaw in Law's strategy: the increase in the issue of banknotes unbacked by specie that were required to put a floor under the Mississippi shares at 9,000 livres per share. Accordingly, Cantillon concluded that the monetization of Mississippi shares would result in a surge in the money supply and a sharp fall in the value of the livre against the pound sterling. In consequence, Cantillon took a large speculative position against the French currency—an action that made him a fortune and caused Law to expel him from France."
    Related Topic: Money
    Life and Work of Richard Cantillon, by Henry Higgs, 1959
    Concluding essay to the 1959 edition of the Essai, edited and translated by Henry Higgs, pp. 363-389
    "Richard Cantillon the economist, according to the Revue historique a first cousin of the Chevalier, was probably born between 1680 and 1690. He married in 1722 Mary Anne Mahony, daughter of Daniel Mahony, a rich merchant of Paris. ... Mirabeau says he could not keep so rare a manuscript to himself and proposed to publish it. ... Mirabeau says the manuscript had been in his possession for sixteen years till he was compelled to restore it to its rightful owner, and it is from this manuscript that the Essai was printed [in 1755]. It is vain to speculate who this rightful owner and intimate friend of Cantillon was."
    Related Topic: Jean-Baptiste Say
    The Origin of Economic Theory: A Portrait of Richard Cantillon (1680-1734), by Mark Thornton, 3 Aug 2007
    Examines the sections of Cantillon's Essai relating them to episodes in the author's life, then delving into several Austrian economics insights that can be found in the work
    "Many crucial Austrian insights have been found in the economics of Irish banker Richard Cantillon1 (1680–1734) and his lone surviving publication, Essai sur la Nature du Commerce en General. It seems clear that Cantillon was an important influence on the development of Austrian economics, and that he can be considered a member of the Austrian School. ... The key episode in Cantillon's life was his involvement with John Law and his monetary schemes. Cantillon was opposed to the inflationist theories of Law, but he understood how the schemes worked and what their fatal flaws were."

    Books Authored

    Essay on the Nature of Commerce in General, 1730
    Partial contents: Of Wealth - Of Human Societies - Of Villages - Of Market Towns - Of Metals and Money, and especially of Gold and Silver - Of Barter - Of Market Prices - Of the Circulation of Money - Of Foreign Trade - Of the Exchanges and their Nature
    Related Topic: Economics

    Videos


    Richard Cantillon, by Marginal Revolution University, Great Economists: Classical Economics and Its Forerunners, 12 Jun 2015
    Discusses Cantillon's contributions to economics in his Essay and why he could be considered "the first of the moderns" (economists)

    Podcasts

    Is Adam Smith the Father of Economics and Free-Market Capitalism? [Reason Podcast], by Nick Gillespie, Naomi Brockwell (moderator), Gene Epstein, Mark Skousen, 5 Jul 2017
    Report, audio and transcript of the debate, held on 13 Jun 2017, on the resolution "Adam Smith should be honored as the founder of modern economics and free-enterprise capitalism" between Mark Skousen for the affirmative and Gene Epstein for the negative
    "[Epstein] Smith is not the founder but one of a number of founders. One of those founders includes a Parisian originally from Ireland named Richard Cantillon whose book length Essay on the Nature of Commerce in General was published in 1755, 21 years before the publication of The Wealth of Nations. ... For a breath of fresh air, try reading Cantillon on usury laws. Cantillon wrote, 'Nothing is more entertaining than the multitude of laws and rules made in every century on the subject of interest of money. Always unnecessarily by sages who barely understand the facts of commerce.'"
    Related Topics: Murray N. Rothbard, Adam Smith

    The introductory paragraph uses material from a Wikipedia article, which is released under the Creative Commons Attribution-Share-Alike License 3.0.