Essai sur la Nature du Commerce in Général (Essay on the Nature of Trade in General)
By Richard Cantillon
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–what more could one ask for from an 18th century economist? Richard Cantillon offers fascination for historians and economists as much in death as he did in life.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. Enriched but embarrassed by speculation in John Law’s scheme, he removed to London (perhaps in flight or to protect his assets). Somewhere along the line he wrote this influential work,
Essai sur la Nature du Commerce in Général (
Essay on the Nature of Trade in General). Probably first written between 1730 and 1734, the first surviving copies are in French, from 1755-56. Whether it was first drafted or circulated in English or in French is unclear; also unclear is what Smith may have seen of it. That Smith was familiar with Cantillon in some form is documented in Smith’s own rare citations. Other contemporary economists were also familiar with the work, even to the point of plagiarizing from the unpublished version.Despite the multiple plagiarizations and the disappearance of early originals, there is general agreement now that Richard Cantillon did indeed write the work; and it did indeed influence Smith and many other contemporaneous economists–the very same the French and English economists whose work became the basis of modern economic thought. Beyond that, though, all we have are the extant 1755-56 French versions and a few translations, of which Higgs’s translation is the only thorough edition. Econlib is pleased to present the full translation of this remarkable work. We also bring you Higgs’s side-by-side French/English edition for download as a pdf file, as well as our formatted searchable online edition.Higgs’s book also contains these other recommended readings:1. William Stanley Jevons’s famous 1881 essay rediscovering Cantillon’s work,
“Richard Cantillon and the Nationality of Political Economy,” an article rich with warranted enthusiasm and detailed research. It also contains a heartwarming surprise ending–a final paragraph that will make you smile.
2. Higgs’s annotated bibliography
“The Life and Work of Richard Cantillon” at the end of the book, an excellent survey of developments following Jevons’s rediscovery.Additional recommendations and summaries:3. We’ve left Higgs’s translation intact; but note that his arcane translations of some words like “Undertaker” for “entrepreneur” obscured Cantillon’s apparent coining of the word “entrepreneur”–see Mark Casson’s article,
Entrepreneurship, in the
Concise Encyclopedia of Economics for more on this.
4. Friedrich A. Hayek,
“Richard Cantillon,” 1931; translated by Micheál Ó Súilleabháin for the
Journal of Libertarian Studies, vol. 7, no. 2, Fall 1985 (republished on Econlib with permission). Other interesting essays in that conference volume on Cantillon include those by Hebert (a discussion of economic ground held in common between Cantillon and the Austrians) and Liggio (a brief history of France and England before and during the period Cantillon was writing). The conference volume is available online in pdf format through the Mises Institute.
5. Joseph Spengler, “Richard Cantillon: First of the Moderns,”
Journal of Political Economy, LXII, August-October 1954.Lauren F. Landsburg
Editor, Library of Economics and Liberty
Henry Higgs, ed. and trans.
First Pub. Date
London: Frank Cass and Co., Ltd.
First extant partial edition is in French: 1755. Includes "Richard Cantillon and the Nationality of Political Economy," by W. Stanley Jevons (1881).
The text of this edition is copyright ©: 1959, Frank Cass and Co. Republished with permission. Originally published 1931 by Macmillan & Co., Ltd. For the Royal Economic Society.
- Introduction, by Henry Higgs
- Previous Editions, by Henry Higgs
- I.I Of Wealth
- I.II Of Human Societies
- I.III Of Villages
- I.IV Of Market Towns
- I.V Of Cities
- I.VI Of Capital Cities
- I.VII The Labour of the Husbandman is of less Value than that of the Handicrafts-Man
- I.VIII Some Handicrafts-Men earn more, others less, according to the different Cases and Circumstances
- I.IX The Number of Labourers, Handicraftsmen and others, who work in a State is naturally proportioned to the Demand for them
- I.X The Price and Intrinsic Value of a Thing in general is the measure of the Land and Labour which enter into its Production
- I.XI Of the Par or Relation between the Value of Land and Labour
- I.XII All Classes and Individuals in a State subsist or are enriched at the Expense of the Proprietors of Land
- I.XIII The circulation and exchange of goods and merchandise as well as their production are carried on in Europe by Undertakers, and at a risk
- I.XIV The Fancies, the Fashions, and the Modes of Living of the Prince, and especially of the Landowners, determine the use to which Land is put
- I.XV The Increase and Decrease of the Number of People in a State chiefly depend on the taste, the fashions, and the modes of living of the proprietors of land
- I.XVI The more Labour there is in a State the more naturally rich the State is esteemed
- I.XVII Of Metals and Money, and especially of Gold and Silver
- II.I Of Barter
- II.II Of Market Prices
- II.III Of the Circulation of Money
- II.IV Further Reflection on the Rapidity or Slowness of the Circulation of Money in Exchange
- II.V Of the inequality of the circulation of hard money in a State
- II.VI Of the increase and decrease in the quantity of hard money in a State
- II.VII Continuation of the same subject
- II.VIII Further Reflection on the same subject
- II.IX Of the Interest of Money and its Causes
- II.X Of the Causes of the Increase and Decrease of the Interest of Money in a State
- III.I Of Foreign Trade
- III.II Of the Exchanges and their Nature
- III.III Further explanations of the nature of the Exchanges
- III.IV Of the variations in the proportion of values with regard to the Metals which serve as Money
- III.V Of the augmentation and diminution of coin in denomination
- III.VI Of Banks and their Credit
- III.VII Further explanations and enquiries as to the utility of a National Bank
- III.VIII Of the Refinements of Credit of General Banks
- Richard Cantillon and the Nationality of Political Economy, by W. Stanley Jevons
- Life and Work of Richard Cantillon, by Henry Higgs
- Appendix A
- Appendix B, Bibliography
Part I, Chapter XIV
The Fancies, the Fashions, and the Modes of Living of the Prince, and especially of the Landowners, determine the use to which Land is put in a State and cause the variations in the Market-prices of all things
If the Owner of a large Estate (which I wish to consider here as if there were no other in the world) has it cultivated himself he will follow his Fancy in the use of which he will put it. (1) He will necessarily use part of it for corn to feed the Labourers, Mechanicks and Overseers who work for him, another part to feed the Cattle, Sheep and other Animals necessary for their Clothing and Food or other commodities according to the way in which he wishes to maintain them. (2) He will turn part of the Land into Parks, Gardens, Fruit Trees or Vines as he feels inclined and into meadows for the Horses he will use for his pleasure, etc.
Let us now suppose that to avoid so much care and trouble he makes a bargain with the Overseers of the Labourers, gives them Farms or pieces of Land and leaves to them the responsibility for maintaining in the usual manner all the Labourers they supervise, so that the Overseers, now become Farmers or Undertakers, give the Labourers for working on the land or Farm another third of the Produce for their Food, Clothing and other requirements, such as they had when the Owner employed them; suppose further that the Owner makes a bargain with the Overseers of the Mechanicks for the Food and other things that he gave them, that he makes the Overseers become Master-Craftsmen, fixes a common measure, like silver, to settle the price at which the Farmers will supply them with wool and they will supply him with cloth, and that the prices are such as to give the Master-Craftsmen the same advantages and enjoyments as they had when Overseers, and the Journeymen Mechanicks also the same as before, the Labour of the Mechanicks will be settled by the day or by the piece: the merchandise which they have made, Hats, Stockings, Shoes, Cloaths, etc. will be sold to the Landowner, the Farmers, the Labourers, and the other Mechanicks reciprocally at a price which leaves to all of them the same advantages as before; and the Farmers will sell, at a proportionate price, their produce and raw material.
It will then come to pass that the Overseers become Undertakers, will be the absolute masters of those who work under them, and will have more care and satisfaction in working on their own account. We suppose then that after this change all the people on this large Estate live just as they did before, and so all the portions and Farms of this great Estate will be put to the same use as it formerly was.
For if some of the Farmers sowed more corn than usual they must feed fewer Sheep, and have less Wool and Mutton to sell. Then there will be too much Corn and too little Wool for the consumption of the Inhabitants. Wool will therefore be dear, which will force the Inhabitants to wear their clothes longer than usual, and there will be too much Corn and a surplus for the next year. As we suppose that the Landowner has stipulated for the payment in silver of the third of the produce of the Farm to be paid to him, the Farmers who have too much Corn and too little Wool, will not be able to pay him his Rent. If he excuses them they will take care the next year to have less corn and more Wool, for Farmers always take care to use their land for the production of those things which they think will fetch the best price at Market. If, however, next year they have too much Wool and too little Corn for the demand, they will not fail to change from year to year the use of the land till they arrive at proportioning their production pretty well to the consumption of the Inhabitants. So a farmer who has arrived at about the proportion of consumption will have part of his Farm in grass, for hay, another for Corn, Wool and so on, and he will not change his plan unless he sees some considerable change in the demand; but in this example we have supposed that all the People live in the same way as when the Landowner cultivated the Land for himself, and consequently the Farmers will employ the Land for the same purposes as before.
The Owner, who has at his disposal the third of the Produce of the Land, is the principal Agent in the changes which may occur in demand. Labourers and Mechanicks who live from day to day change their mode of living only from necessity. If a few Farmers, Master Craftsmen or other Undertakers in easy circumstances vary their expense and consumption they always take as their model the Lords and Owners of the Land. They imitate them in their Clothing, Meals, and mode of life. If the Landowners please to wear fine linen, silk, or lace, the demand for these merchandises will be greater than that of the Proprietors for themselves.
If a Lord or Owner who has let out all his lands to farm, take the fancy to change considerably his mode of living; if for instance he decreases the number of his domestic servants and increases the number of his Horses: not only will his Servants be forced to leave the Estate in question but also a proportionate number of Artisans and of Labourers who worked to maintain them. The portion of land which was used to maintain these Inhabitants will be laid down to grass for the new Horses, and if all Landowners in a State did the like they would soon increase the number of Horses and diminish the number of Men.
When a Landowner has dismissed a great number of Domestic Servants, and increased the number of his Horses, there will be too much Corn for the needs of the Inhabitants, and so the Corn will be cheap and the Hay dear. In consequence the Farmers will increase their grass land and diminish their Corn to proportion it to the demand. In this way the Fancies or Fashions of Landowners determine the use of the Land and bring about the variations of demand which cause the variations of Market prices. If all the Landowners of a State cultivated their own estates they would use them to produce what they want; and as the variations of demand are chiefly caused by their mode of living the prices which they offer in the Market decide the Farmers to all the changes which they make in the employment and use of the Land.
I do not consider here the variations in Market prices which may arise from the good or bad harvest of the year, or the extraordinary consumption which may occur from foreign troops or other accidents, so as not to complicate my subject, considering only a state in its natural and uniform condition.
Essai says “un à un”—a printer’s error, or a slip of the pen. Postlethwayt has “one million.” See
post, p. 385.
Political Anatomy of Ireland, ch. ix.