An Essay On Economic Theory (Richard Cantillon)

An Essay on Economic Theory
An English translation of Richard Cantillon’s Essai sur la Nature du Commerce en Général

An Essay on Economic Theory
An English translation of Richard Cantillon’s Essai sur la Nature du Commerce en Général

Translated by Chantal Saucier Edited by Mark Thornton

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AnEssayonEconomicTheory©2010bytheLudwigvonMisesInstituteandpublishedunderthe CreativeCommonsAttributionLicense3.0. http://creativecommons.org/licenses/by/3.0/ LudwigvonMisesInstitute 518WestMagnoliaAvenue Auburn,Alabama36832 mises.org ISBN:978-1-61016-001-8

Foreword
RobertF.Hébert

firstblushofdiscovery,proclaimedCantillon’sEssai,“thecradleofpoliticaleconomy.”Subsequentgrowthanddevelopmentofeconomicthoughthasnotreallyalertedustothesubtletiesofthissuccinctappraisal.Acradleholdsnewlife;andtherecanbelittledoubtthattheEssaiaddednew lifetotheorganizingprinciplesofeconomics.But“politicaleconomy” doesnotaccuratelydescribethesubjectCantillonaddressed.Indeed, hescrupulouslyavoidedpoliticalissuesinordertoconcentrateonthemechanicsofeighteenth-centuryeconomiclife.Whenconfrontedby “extraneous”factors,suchaspolitics,Cantilloninsistedthatsuchconsiderationsbeputaside,“soasnottocomplicateoursubject,”hesaid,thus invokingakindofceteris paribus assumptionbeforeitbecamefashionableineconomicstodoso. ThisismerelyonewayinwhichCantillonwasaheadofhistime.HeprecededAdamSmithbyageneration.Bothwritersmadeimportant foundationalcontributionstoeconomics,butfromperspectivesthatwere quitedifferent.Smithwasaphilosopherandeducator.Hisapproachto economicsreflectedtheconcernsandapproachesofphilosophicinquiry stretchingbacktoThomasHobbes.TheHobbesiandilemmawashowto securepeaceandprosperitywithoutsubmittingtoanall-powerfulcentralgovernment.Smithgaveananswerbasedonthenatureandfunctionofan exchangeeconomyoperatingunderaruleoflaw.The Wealth of Nations isfullofusefuladvicetothosewhoholdpoliticalpower.Hence,Smith earnedhissobriquet“fatherofpoliticaleconomy.”Cantillonwasabusinessmanandbanker.Hisapproachtoeconomicsreflectedtheconcernsofpracticalmenwhosetaboutmakingaliving,andhisanalysisconcentratedonthestructureandmechanicsofan emergingmarketeconomy.Theeconomyhedescribedwasanenterprise

FoLLoWINgACENtuRyofneglect,WilliamStanleyJevons,inthe

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AnEssayonEconomicTheory

economy,notapoliticalone,inwhichcertainindividualsplayedkeyroles, somepassiveandsomeactive.government,asweknowit,wasrelatively passiveinCantillon’seconomy.Themostactiveandcentralparticipant wastheentrepreneur,whomotivatestheentireeconomicsystem.unlike anypreviouswriter,Cantillonexplicatedthevitalroleoftheentrepreneur withperceptionandvigor.Hence,hedeservestobecalled“thefatherof enterpriseeconomics.” TheseconsiderationsalonewouldjustifyrenewedinterestinCantillonandhiswork,buttherehavealwaysbeenimpedimentstoovercome.We knowlittleofCantillon’slifeandthecircumstancesofhisauthorship.The manuscriptthatwaseventuallypublishedin1755circulatedprivatelyin Franceforalmosttwodecadesbefore;whenpublished,itappearedunder mysteriouscircumstances.Thedesignatedpublisher,Fletchergyles,neverexistedattheaddressgiven;anddespitethephrase“traduitdel’Anglois” onthetitlepage,noEnglishoriginalwaseverfound.Moreover,astatisticalsupplementtotheEssaihasgonemissing,andhasneverbeendiscovered.Inthe1970saJapanesescholarunearthedaFrenchmanuscriptatthe municipallibraryinRouenbearingthetitle,“EssayDelaNatureDuCommerceengénéral,”whichencouragedspeculationthatthefirstwordmay...