Richard Cantillon has been largely forgotten, but his work,"Essai sur la nature du commerce en général", in fact exerted incredible influence on the initial stages of economics and had given the first coherent survey of economics. In fact, his work was among the very few cited by Adam Smith in the Wealth of Nations. The rediscoverer of Cantillon's work, William Stanley Jevons, summed up Cantillon's work as follows:
" The Essai is far more than a mere essay or even collection of disconnected essays like those of Hume. It is a systematic and connect treatise, going over in a concise manner nearly the whole field of economics, with the exception of taxation. It is thus, more than any other book I know, the first treatise on economics. Sir William Petty's,"Political Arithmetic" and his,"Treatise of Taxes and Contributions" are wonderful books in their way, and at their time, but, compared with Cantillon's Essai, they are merely collections of casual hints. There were earlier English works of great merit, such as those of Vaughan, Locke, Child, Mun, etc., but these were either occasional essays and pamphlets, or else fragmentary treatises. Cantillon's essay is, more emphatically than any other single work, "the cradle of political economy"."This newfound recognition of Cantillon as the founder of the Physiocratic doctrine, however, was not felt in Germany. German economist, August Oncken, an expert on the Physiocratic school wrote the following about Cantillon in,"Geschichte der Nationalökonomie "...which led to Cantillon's work being ignored in Germany:
"All this goes to show while some common points exist between the two doctrines [Cantillons and the physiocrats], this is a long way from justifying the conclusion that Cantillon could be envisioned as "the father of Physiocracy" and hence as the originator of economics as a science. The latter claim cannot be sustained, as the great moral and philosophical underpinning inherent in Quesnay's system as well as in that of Adam Smith is lacking in the Essai. Cantillon was an acute thinker and unusually well educated for his time; for all that, he was nothing more than a merchant, as were North, Child and later on Ricardo. He was not the founder of science."According to Friedrich August von Hayek, in,"The Collected Works Of F. A. Hayek, Volume 3, The Trend Of Economic Thinking his work in Essai was basically made up of three parts, these being: 1)On Wealth or production, 2) On Exchange, 3) International Trade. Hayek has the following to say regarding Cantillon's economic methodology:
"...Cantillon aspired only to understand relationships, tying his exposition neither to proposals for reform nor to ethical considerations, and seeking merely to explain the way things are in the most dispassionate way, free of all metaphysical speculation--this very fact, together with his somewhat ponderous French, has been the chief reason why his Essai was able to influence only a small select circle.But even within theoretical analysis, Cantillon wields its most important tool, the method of "isolating abstraction" ...with true virtuosity. Not only does he freely make use of the assumption of ceteris paribus, which can already be found in earlier writers, but he also resorts to the fiction of an isolated state, and to the step by step explanation of price formation from the simplest case of monopoly to more complicated cases. [According to Cantillon,] wealth "is nothing other than food, the comforts, and the amenities of life." This entirely psychological concept of wealth, by far the most important part of the famous sentence, though it is generally overlooked, is an extraordinary achievement on Cantillon's part, and so decisive for his whole perspective that a modern French scholar could describe Cantillon, not entirely unjustly, as a precursor of the modern hedonists...His population theory is interesting because, as Jevons pointed out, it anticipates in a few brief sentences the core ideas of malthusian population theory.
Only with the dismissal of all predecessors of Adam Smith, which began with J. B. Say, was Cantillon forgotten even in France. But even in Germany and in Italy the Essai seems to have enjoyed a certain dissemination. In Italy the impact of the Italian translation can be observed at least in G. Filangieri, and in Germany, in addition to Graumann,...the 'German Physiocrat' Jakob Mauvillon must have known the Essai reprinted by his father. It can certainly be proved that J. F. von Pfeifer was acquainted with Cantillon's work. Without naming Cantillon, to be sure, but clearly referring to him, von Pfeifer said that "the physiocratic system was produced in England, was only propagated from there to France, and finally was passed on the Germany". The acquaintance of G. A. Will with Cantillon's work can also be demonstrated. In 1782, in his, "Versuch über die Physiokratie", he quoted this remark of Pfeifer's, adding: "it is also correct that among others the Englishman Cantillon--in his fine essay on commerce--delineated already many years ago the theory of the physiocrats concerning the structure of the state, both in its most important principles and in its main conclusion.""
Works by Richard Cantillon:
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