Richard Cantillon Research Articles

How Cantillon and Hume Propose the Same Theory of First-Round Effects

Richard Cantillon and David Hume both propose the theory of monetary non-neutrality, whereby the money supply changes through the money balances of specific individuals. Such an uneven distribution of monetary change then spreads throughout the economy step by step and changes relative prices. While a number of authors note that Hume and Cantillon both present the same theory, they do so without seeking confirmation from the original texts. I fill this gap in the literature by identifying the main constituent parts of the theory in the contributions of both Cantillon and Hume.

The Origins of the Income Theory of Money

Abstract The income theory of money was conceived in the 19th century, and in the first half of the 20th century it formed the backbone of all the main monetary approaches of the time. Yet, since it did so mostly implicitly rather than explicitly, and since the later developments moved economic theory in a different direction, the income theory of money is hardly remembered at present. While mainly accounting for the origins of the approach, I am also offering a brief comparison with the present mainstream economics and I shortly address the question of the possible future of the theory too. The income theory of money explains how nominal prices are formed by interaction of nominal expenditures streams with real streams of goods sold. While various ideas leading to this theory were expressed already by John Law, Richard Cantillon, and Jean-Baptiste Say, it is perhaps only Thomas Tooke whom we might want to call the originator of the theory. Within the Classical School of Political Economy, Tooke's ideas were further elaborated by John Stuart Mill. The theory reached a momentous formulation in the works of Knut Wicksell, in many respects a similar exposition was delivered also by Friedrich Wieser. The recognition of the theory was impaired by a change of the main-stream paradigm as well as by a surge in emphasis laid on the quantitative modelling in economics. Yet, there are certain fundamental questions of the monetary theory which the general equilibrium style models cannot cope with, while the income theory of money can, at least to a certain degree. This might give the theory some hope for the future.

Entrepreneurship: Theory and Application in a University Arts Management Setting

IntroductionInitially developed at the dawn of the eighteenth century, the concept of entrepreneurship has been the focus of increasing interest in the area of economics since the nineteenth century and that of higher education since the middle of the twentieth century. Research shows that over the last fifty years in particular, entrepreneurship as an academic discipline has transcended the confines of business textbooks become a synonym for progressive thought in various disciplines and contexts.1 Additional studies point the overlap between the arts, creativity, and what is referred as the entrepreneurial spirit.2 Nonetheless, an irony pervades the current renewal of interest in entrepreneurship within the academy because, despite the proliferation of articles, definitions, personality profiles, and case studies, we are far from any complete understanding of entrepreneurship as such.3 While many approaches the topic are more codified as a result of either their disciplinary association or their place in the wider of ideas, current scholarship is also witness the effort define entrepreneurship from the perspective of the creative and cultural industries. Given these dynamics, an overview of the subject's theoretical situation is useful guide and focus the groundswell of interest from within higher learning while offering an informed perspective a working curricular and pedagogical approach the specific case of arts entrepreneurship instruction.Theoretical Overview: Primary Historical SourcesAs indicated above, the recent growth of interest in entrepreneurship has resulted in an interdisciplinary approach the topic. This invites an initial partitioning of theoretical approaches along the lines of the relevant disciplines. However, it is also useful recognize a common historical development that underpins and informs the more recent, multi-disciplinary perspective. Two groupings would allow for us connect the early history of entrepreneurship thought (18th and 19th centuries) the more recent (20th century present) as it pertains academic research theories from disciplines including business, sociology, and psychology.4Richard Cantillon (1680-1734) was the first develop the idea of entrepreneurship beyond its scattered use since the high Middle Ages (12th century, from the French entreprendre designating to embark on a project). While contemporary use of the term entrepreneurrefers someone undertaking projects (our also comes from the French root), Cantillon was the first associate this title with specific behaviors. He did this by separating entrepreneurs from landowners and hired hands before describing these two parties as parts of the larger enterprise of connecting products with consumers. Coordinating the moving parts of the project as such is the domain of the entrepreneur according Cantillon's initial formulation.French political economist Jean Baptiste Say (1767-1832) refined Cantillon's model by expanding its applicability beyond its initial, agricultural setting. Say represented the entrepreneur as an agent bringing together multiple specialists collaboratively build a productive item. Say also recommended shifting resources from areas of lower productivity those of higher productivity. This signifies his implicit recognition that external conditions were part of the larger equation for managing entrepreneurial risk, (a consideration later developed by Frank Knight, see below). Say's concept of entrepreneurship is indebted the English political economist Adam Smith (1723-1790) who conceived of the entrepreneur as an agent for transforming demand into supply.In 1848, John Stuart Mill (1806-1873) published Principles of Political Economy-a text that followed in line with the liberal economic ideology shared by David Ricardo (1772-1823) and Adam Smith. However, in his treatise, Mill took a more pragmatic approach in contrast Ricardo's theoretical stance identifying entrepreneurship as the fourth factor of production. …

The Market for Entrepreneurs: The Story of a Failure

This work analyses the particular and repeated attempt to introduce the entrepreneur into economic activity through the market for entrepreneurs. We shall examine the few suggestions ― Richard Cantillon, Jean-Baptiste Say, Alfred Marshall and Frank Knight ― that propose it. The analysis of the writings of these authors enables us to draw relevant conclusions from their attempts to develop an economic theory of the entrepreneur from the perspective of the market for entrepreneurs.

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

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.

“Quorum pars magna fui”: On the Cantillon–Marx connection

Starting from Marx's unpublished excerpts from the Essai sur la Nature du Commerce én Général by Richard Cantillon, this paper traces the impact that the reading of the Essai exercised on both Marx's assessment of Cantillon and his own view of the origins of political economy. It is shown that closer acquaintance of Marx with Quesnay's Tableau Ēconomique and with Cantillon's Essai occurred almost simultaneously, and this joint discovery led him to supplement his value-centred view of early classical economists with a new circular flow, or macroeconomic perspective within which Cantillon's role was recognised to be crucial. Marx's analysis of the Cantillon–Quesnay connection is supported by a review of an early contribution to Cantillon scholarship by the Soviet economist Alexandra Eidelnant.

Mysteries and historiographical inertia: the case of Cantillon

Behind the appearance of original research, historiographical work often conceals inertia. One very clear example regards the «enigmas» surrounding an acknowledged classic of economic thought, Essai sur la nature du commerce en general by Richard Cantillon - an author whose life, wrote one of his most important biographers, is «un enigme. Sa naissance, sa carriere, sa mort, demeurent meme entourees de mystere». A different perspective can lead to results far from well-established canons. This is what the author does, using sources for all notes, but for the most part read separately, following long-standing tradition. The result is the emergence of numerous fresh and new avenues of research. This is above all as regards the possible publisher of the Cantillon manuscript and the famous Supplement of calculations. For some, the Supplement - never found and perhaps never even existing in the first place - has placed the Essai's author among the fathers of Econometrics.

Between Ibn Khaldun and Adam Smith (Fathers of Economics)

Who is the father of economic sciences? If you ask this question to scholars, professors and economists; the answer you would get to be mostly or some will say Ludwig von Mises, Richard Cantillon or Carl Menger. This paper would like to highlight that both Ibn Khaldun and Adam Smith were the fathers of economics.

Richard Cantillon’s Ideologies and Its Implications for Economic Development in Nigeria

Richard Cantillon’s Ideologies and Its Implications for Economic Development in Nigeria

‘Something wonderful and incomprehensible in their œconomy’: The English versions of Richard Cantillon's Essay on the Nature of Trade in General

Until at least the 1750s, a number of drafts survived of Richard Cantillon's Essay on the Nature of Trade in General, in different stages of completion. This is suggested by a paragraph-by-paragraph comparison between three versions of Cantillon's writings, namely the French Essai of 1755, fragments of Postlethwayt's Universal Dictionary (1752–1754) and Philip Cantillon's Analysis of Trade (1759). Whilst numerous variations between the texts may be attributed to free translation practice or to interventions by later editors, others cannot. A comparative study of variations may provide us with insights into the development of the ideas of this masterly economic theorist.

Rural Entrepreneurship, a perspective with special reference to Arunachal Pradesh: an Empirical Study

The entrepreneur,  term coined by European economist Richard Cantillon  in 1755, through his enterprise helps in employment generation, generating national income, dispersal of economic power, balancing regional development and in harnessing youth vigour. It is also defined as ‘the ability of communities to turn grass into gold’. The region of North East India in particular will have to realize how confidently it can rely upon the rural enterprises but for that the Society will have to walk extra-miles with innovation, dedication and determination. In absence of private enterprises in Arunachal Pradesh, there is only Government sector to provide job which is over saturated. Moreover, few jobs, if available, are non-productive clerical type.   Although the State is comparatively peaceful, the North-East Region has been facing problem of militants mainly because of dearth of employment. Setting up VI is therefore the probable answer.

Cantillon on the Cause of the Business Cycles

Richard Cantillon was the first economist to successfully examine the cyclical nature of the capitalist economy. He lived at a time (168?–1734) when the institutions of the modern capitalist economy were first fully and widely established and the first major business cycles occurred. In contrast to the Mercantilists, Cantillon was an astute observer who developed a clear economic understanding of money, banking, international trade, and stock markets because this is where he risked his capital and earned his fortune. He modeled the economy as an interconnected whole and developed what we now know as the circular-flow model of the economy and the price-specie-flow mechanism of international money movements. He discovered that markets were regulated by the movements of prices based on supply and demand and identified equilibrating tendencies with market exchange.

A Theory of Political Entrepreneurship

This paper adapts the entrepreneurial theory developed by Richard Cantillon, Frank Knight, and Ludwig von Mises to the theory of “political entrepreneurship.” Political entrepreneurship is an outgrowth of the theory of the market entrepreneur, and derives from extending entrepreneurial theory from the market into the political sphere of action. By applying the theory of the entrepreneur to political behavior, we provide a basis for identifying political entrepreneurs, and for separating them analytically from other government agents. The essence of political entrepreneurship is the redirection of production from the path it would have taken in an unregulated market. Nevertheless, this production does produce an income stream to political entrepreneurs which closely resembles the profit of market entrepreneurs.

Retrospectives: An Early Supply-Side–Demand-Side Controversy: Petty, Law, Cantillon

Early modern Europe in the late seventeenth and early eighteenth centuries witnessed an unprecedented increase in the rate of economic growth, and governments entertained a wide range of proposals aimed at developing and harnessing foreign trade and emerging financial markets. In his magisterial survey of foreign trade doctrine titled Studies in the Theory of International Trade (1936), Jacob Viner pointed out that enlightened authors of that time were often nonbullionist mercantilists: they favored export promotion and import reduction not on the grounds that it would lead to an accumulation of gold, but on the grounds that it would increase trade and employment. My focus here is on how some key economists of this time period—William Petty, John Law, and Richard Cantillon—adumbrated disputes between supply-side and demand-side macroeconomics that have continued to the present day.

Was Richard Cantillon a Mercantilist?

Richard Cantillon is considered by many to be the first economic theorist. His contributions span such diverse topics as methodology, value and price theory, population, money, international trade, business cycles, the circular-flow model of the economy, and the price-specie-flow mechanism. His only known book, Essai sur la Nature du Commerce en Général (hereafter, the Essai), may represent one of the single largest steps forward in the social sciences. Many attempts have been made to classify Richard Cantillon into a well-defined school of thought and he has been claimed as a forerunner by many schools of economic thought, but for purposes of categorization, he is most often placed with the mercantilists. Cantillon lived and wrote before the Physiocrats. He was involved in John Law's Mississippi Bubble, one of the grandest attempts to actualize the mercantilist dream of increasing the supply of money, and he was involved in the merchant trade and merchant banking business, so it would be natural to consider him a mercantilist writer. Those who have classified him as a mercantilist, however, base their categorization mainly on excerpts from the Essai where Cantillon seems to display sympathy with mercantilist policy objectives in such areas as international trade, monetary policy, and economic development.

Entrepreneurial Culture among Proprietors of Small Business in Madurai

The entrepreneur is the creator and manager of a business. Therefore the entrepreneur is not a single person. Further he/she is an economic agent who plays an important role in the economic development of a nation. However, (s)he is an individual with knowledge, skill, initiative, drive and sprit of innovation aiming at reaching goals. Richard Cantillon, an Irish man living in France, defined entrepreneur as an agent who buys factors of production at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future. Knight also expressed his view on entrepreneur as a specialised group of persons who bear uncertainty. Thus an entrepreneur is a person having capability to bear risk due to uncertainty in order to attain goals. Such an entrepreneur keeps on changing his/her entrepreneurial character in order to fit in with the existing environment, establishing a new formation constantly. This tendency towards new formation is known as entrepreneurial culture. Therefore an attempt is made to study “Entrepreneurial Culture among proprietors of Small Business in Madurai”. This paper is evolved on the basis of the following objectives. a) To study the personal factors of the entrepreneur b) To analyse the entrepreneurial culture These objectives were taken into consideration for constructing a schedule to collect the data. A sample of 50 respondents was chosen among various small business owners in Madurai. The convenient sampling technique was adopted. The schedule was administered among the selected respondents. Information thus collected was properly edited, coded and classified. The results of analysis are presented in the following paragraphs.

Agriculture, Agronomy, and Political Economy: Some Missing Links

The founding years of political economy coincided with the birth and the golden age of modern agronomy. In the century that separated Jethro Tull from Justus Liebig and Jean-Baptiste Boussingault—after whom agronomy became applied chemistry—political economy underwent fundamental changes, for this was also the period that separated Richard Cantillon from John Stuart Mill—in short, almost the entire period of the development of the classical school of political economy. This parallelism has not received the attention it deserves. Recent appraisals have included science as a factor in the making of political economy (Mirowski 1989) or have sought to link the two fields (Schabas 1992), but few studies consider the applied sciences and their techniques or, to use Mill’s more precise definition applied to agronomy, their arts. Perhaps one reason is that agronomy is difficult to place: it is not exactly science, nor is it economics; it is, as one commentator has described it, “between reasoned practice and effective science” (Sigaut 1998, 197). And although some historians of science have analyzed agronomy in relation to certain sciences such as botany or medicine, no general vision

The Pursuit of Managerial Entrepreneurship: Does Organization Matter?

Responding to managerial developments in the private sector, scholars and practitioners in the sector have recently paid much attention to the managerial entrepreneurship models under which organizations pursue enhancement of customer satisfaction, reduction of red tape, and promotion of risk-taking activities. Entrepreneurship is often hailed in the sector as a means of achieving more efficient, flexible, and adaptable management in a turbulent and competitive environment. This emphasis may lead to intensive and extensive innovations in the management of the sector (Wart, 1995). This study attempts to understand what characteristics of organizational structure, culture, and environment potentially lead to development of managerial entrepreneurship. Using the data collected by the National Administrative Studies Project (NASP), an empirical analysis is conducted to examine the associations between organizational factors and managerial entrepreneurship. The notion of entrepreneurship has been rapidly transferred from the private sector to the sector without appropriate adjustments or conceptual clarifications. The term entrepreneur, coined by Richard Cantillon and later popularized by French economist J. B. Say in the early 1800s, originally referred to merchant wholesalers who bear the risk of reselling agricultural and manufactured produce (Baumol, 1993, 12). Later it represented the individual who shifts economic resources out of an area of lower and into an area of higher productivity and greater yield (Drucker, 1985, 21). In the sector, meanwhile, entrepreneurship often represents public enterprise, a hybrid of and private organizations that is considered to be a more efficient organizational form for some government programs (Thomas, 1993, 474). Students of administration are increasingly examining the value of entrepreneurship as an alternative means of promoting managerial improvement and introducing market-like competition in the sector (Lewis, 1980; Doig and Hargrove, 1987; Osborne and Gaebler, 1992; Gore, 1993; Peters and Savoie, 1995, 1996; Johnston, 1996; Seidenstat, 1996). In the sector, contractual entrepreneurship and managerial entrepreneurship are often discussed. Contractual entrepreneurship describes market-based government activities that attempt to introduce market competition and promote contractual relationships in the sector (Halachmi and Nichols, 1996). Contractual entrepreneurship includes government franchises, privatization, cross-services, and contracting out. Managerial entrepreneurship broadly refers to managerial as well as properties that promote innovations and changes that improve performance with respect to organizational products, processes, and behaviors. Managerial entrepreneurship has been explored under various theoretical frameworks, including the new managerialism (Pollitt, 1992), the new governance paradigm (Ingraham and Romzek, 1994), and the post-bureaucratic paradigm (Barzelay, 1994). Despite numerous practical and prescriptive discussions of managerial entrepreneurship, little research has been conducted that develops a theoretical model of entrepreneurship and shows empirical results. Moreover, little effort has been made to clarify differences in managerial entrepreneurship between the and the private sectors. Consequently, fundamental confusion and conflicting approaches exist with respect to the nature of entrepreneurship (economic, contractual, and managerial entrepreneurship), administrative values and ethics (deLeon, 1996), administrative models (Moe and Gilmore, 1995) and expected outcomes of entrepreneurial government (Coe, 1997). This presence of confusion and conflicting approaches reflects the fact that entrepreneurship is not always viewed as a positive direction for organizations. The negative perception arises partially because entrepreneurship has multiple attributes and is not well defined. …

Cantillon on real wages and employment: a rational reconstruction of the significance of land utilization*

It is quite a fundamental proposition of Richard Cantillon's Essai sur la Nature du Commerce en General (1755) that employment and population bear a negative relation to the level of real subsistence wages - a form of wages (or subsistence) fund doctrine. This paper presents a 'rational reconstruction' of Cantillon's system and the relation between real wages and employment within it. It seeks thereby to clarify the difficulties in the way of this doctrine operating in a market economy constructed along Cantillonian lines - as opposed to a Cantillonian command economy. These results are contrasted with a model of Cantillon by Hans Brems.(This abstract was borrowed from another version of this item.)

La « French connection » : influences françaises sur l'économie politique britannique

Peter Groenewegen : The "French connection". Some case studies of French influences on british economics in the 18th century. This article examines French influences on British economics in the 18th Century by means of three case studies covering the early decades of the Century (Richard Cantillon), the 1730s and 40s (David Hume) and the 1750s and 60s (Sir James Steuart and Adam Smith). They reveal a growing spread of French influence in line with the bibliographical evidence suggesting that France was the major producer of economic literature from 1754 to 1768. Apart from a general discussion of the potential influences on these four authors indicated by their citation practices, the article suggests the hypothesis that criticism of Melon may have been a major source of Hume's inspiration to write his economic essays in the late 1740s.