Richard Cantillon - economist, financier, entrepreneur (1680-1734)
The First Economist
Richard Cantillon was an influential Irish-French economist and entrepreneur best known for his pioneering work, Essai sur la Nature du Commerce en Général (Essay on the Nature of Trade in General), written around 1730 and published posthumously in 1755. His contributions laid the foundation for modern economics, particularly in the fields of value theory, entrepreneurship, and monetary policy.
Economic Ideas
Cantillon’s economic thought was groundbreaking and influenced later economists, including Adam Smith and the Physiocrats. His key contributions include:
Entrepreneurship and Risk: He defined the entrepreneur as a risk-taker who buys resources at a fixed price and sells them at uncertain prices, introducing the concept of uncertainty in business.
The Circular Flow of the Economy: He described how money circulates between households and businesses, influencing early economic modeling.
Theory of Value and Prices: He distinguished between intrinsic (natural) value and market price, emphasizing the role of supply and demand.
Monetary Theory: He analyzed the effects of money supply on prices, anticipating the Quantity Theory of Money and explaining inflation caused by excessive money creation.
Spatial Economics and Land Theory: He studied how geographic and demographic factors influence wealth distribution and economic activity.
Entrepreneurial Activities
Cantillon was also a successful banker and speculator. He profited from the Mississippi Bubble, a financial scheme led by John Law in France. By lending money and later selling assets before the bubble collapsed, he amassed significant wealth. However, his financial dealings led to conflicts, lawsuits, and eventually his mysterious death in a fire, suspected to be a murder.
Legacy
Though his work remained obscure for years, Cantillon is now recognized as a foundational figure in economics. His insights into entrepreneurship, monetary policy, and economic systems influenced classical and modern economic thought, earning him the title "The First Economist."
Sources about his work:
https://a.co/d/0KtXpmN
https://a.co/d/3N2MeO5