Cantillon on Profit and Interest: New Insights from Other Versions of His Writings

Abstract

Modern disagreements about the question to what extent Richard Cantillon anticipated the classical theory of profit and interest are, at least to some extent, due to ambiguities in his writings. New insights into his thinking can be obtained from considering, besides the French Essai, relevant passages from the English versions of Cantillon’s writings. Two kinds of development can be seen in his writings. The first kind of development, internal to each of the versions of his work, is due to the way in which Cantillon builds up his theories. Since he typically starts from a simple situation, the association of the income category “profit” with the function of the provision of capital is only made later in his work. The other development can be seen between the versions. While relevant passages in Philip Cantillon’s Analysis of Trade offer less developed arguments than the Essai, formulations found in Malachy Postlethwayt’s Universal Dictionary sometimes go beyond what we find in the French text. One passage in particular shows that Cantillon was in a sense groping toward a notion of profit as a return on capital that was closer to the classical conception.