Richard Cantillon's Essay on the Nature of Trade in General

Richard Cantillon, Richard van den Berg

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317745242
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The Essay on the Nature of Trade in General was written in the early 1730s by Richard Cantillon, a speculator and banker who had made a vast fortune during the Mississippi and South Sea Bubbles of 1719-20. The work remained unpublished for about two decades, but when it appeared posthumously in Paris in 1755 the book was immediately recognised as a brilliant genre-defining contribution to the then emerging intellectual discipline of political economy.

A degree of mystery has always surrounded the publication of the Essay. Cantillon died under mysterious circumstances in 1734, but the work survived in various manuscript forms. This edition offers an innovative mode of presentation, displaying for the very first time all print and manuscript versions of the Essay in parallel. This allows the reader to appreciate different formulations of Cantillon's seminal contributions to a range of topics, including his circular flow analysis, monetary theory, theories of value and distribution, the role of the entrepreneur, spatial economics and international trade.

Richly annotated and accompanied by a detailed study of the historical background of Cantillon's writings, this new scholarly edition offers many new insights into this early masterpiece of economic theory.

1
Introduction

The main facts of the peculiar reception history of Cantillon’s writings are quite well known. After having remained in manuscript for about two decades, the Essai sur la nature du commerce en général appeared in print in Paris in May 1755. The work rapidly made an impression on the most significant authors of the then emerging discipline of political economy: Quesnay, Turgot, Steuart, Beccaria, Smith, Condillac and various lesser-known authors. But, after a few decades, interest in the Essai waned, to such an extent that after the French Revolution Cantillon’s work was rarely read. Generally speaking, until the last decades of the nineteenth century all but a few economists stopped attaching any real significance to this work of somewhat mysterious provenance.¹

A modern fascination with the Essai was sparked by the publication of William Stanley Jevons’s article ‘Richard Cantillon and the Nationality of Political Economy’ in 1881. In this groundbreaking contribution Jevons proclaimed his deep admiration for the Essai, hailing it as ‘the cradle of political economy’ and ‘the first systematic Treatise of Economics’ (Jevons [1881] 1931: 359–60). In this manner, Jevons, himself one of the initiators of a revolution in economic theory, established the reputation of Cantillon’s work as one of the foundational texts of the discipline. Of course Jevons’s remarkable reappraisal of the Essai’s importance was not accepted at a stroke. At first especially French and German economists and historians remained somewhat lukewarm about Cantillon’s importance (see Hayek [1931] 1985: 9–10). However, during the twentieth century Jevons’s assessment of the Essai became more widely shared. In particular, influential general histories of economic thought would customarily praise the Essai. To give some examples, Schumpeter (1954: 217, 223) would call it ‘a great work’ and ‘a brilliant performance’; Blaug (1997: 21): ‘the most systematic, the most lucid, and at the same time the most original of all statements of economic principles before the Wealth of Nations’; Ekelund and Hébert (1990: 77): ‘a masterpiece’ and ‘the state of the art of economics before Adam Smith’.

Especially in the second half of the twentieth century, there also emerged a more extensive specialist secondary literature about particular aspects of Cantillon’s work. While it is hard to do justice to this literature, some important contributions were the following: Spengler (1942) wrote about Cantillon’s theory of population; Ponsard (1958), Dockès (1969) and Hébert (1981) discussed his contributions to spatial economics; Brems (1978) and Brewer (1988) focussed on Cantillon’s theory of value; Bordo (1983) summarised his monetary economics; Aspromourgos (1989) studied Cantillon’s theory of production and distribution; Prendergast (1991) highlighted his theory of profit; and Berdell (2009) reconstructed his intersectoral analysis. General overviews of Cantillon’s work were offered, for instance, by Spengler (1954) and Brewer (1992). These various studies, and others, have generated a large number of insights and a range of alternative views about Cantillon’s economics. The fact that in earlier times Marx, Jevons and Hayek, originators of fundamentally different approaches to economic theory, each expressed their admiration for the author of the Essai attests to the broad and seminal nature of Cantillon’s contribution.²

The modern interest in Cantillon also inspired further biographical work. For a long time the investigations of Higgs (1891, 1892, 1931) remained the most reliable sources for information about the Irish banker and speculator. But eventually Murphy’s study (1986) superseded all earlier biographical research on Cantillon.

Scholarly editions that were published in the twentieth century consolidated the reputation of the Essai as a crucial early contribution to economic theory. The first was Henry Higgs’s edition of 1931, published under the auspices of the Royal Economic Society, which presented the French text of the first print edition of 1755 alongside the first full English translation of the Essai. Higgs’s edition became the standard text used by Anglo-Saxon readers of Cantillon for the rest of the twentieth century.³ Also in 1931 the first German translation of the Essai was published, prepared by Hella Hayek and introduced by her then husband Friedrich. The modern French edition, prepared by Louis Salleron for the Institut National d’Études Démographiques, followed in 1952. It was reprinted in 1997 with some corrections and with additional introductory essays and it remains the standard modern edition in French based on the publication of 1755 (Brian and Théré 1997). The modern Italian edition by Sergio Cotta and Antonio Giolitti was published in 1955.⁴

The present work differs from all previous scholarly editions in that it includes in addition to the French print edition of 1755 other versions of Richard Cantillon’s economic writings. The notion that such an edition would be desirable first suggested itself to me in the summer of 2010 when I happened across a fascinating passage in the entry ‘Circulation’ of Malachy Postlethwayt’s massive Universal Dictionary of Trade and Commerce (1751–55). The passage in question, here reproduced in D134 on p. 128, came at the end of an extended fragment that roughly corresponds to Cantillon’s chapter 13 of part I of the Essai. In this famous chapter Cantillon describes the crucial role of entrepreneurs in the provisioning of goods within what we would call a ‘market economy’. The passage in the Dictionary, while summing up the preceding argument very well, did not have a direct counterpart in the French text. It spoke of the economic system as a ‘grand machine’ of circulation, which is ‘commonly carried on with uncertainty’, but in which ‘every thing finds its own proportion, well or ill, according to chance or caprice, without any peculiar intellectual conduct, whereby the society of commerce and circulation is governed’.

These highly suggestive formulations piqued my interest and sent me back to Higgs’s famous study, included in the edition of 1931, where he had discussed Postlethwayt’s ‘borrowing’ of fragments of Cantillon’s writings. Higgs, it turned out, seemed to play down any possible differences between the French text and the fragments found in Postlethwayt’s Dictionary, only admitting ‘occasionally some small deviations from the turn of phrase’ (Higgs 1931: 384). This hardly described the quite divergent ending to the fragment I had come across. If this was true for a passage I had happened upon by chance, I wondered, could it be that similar differences between the French and English texts were more common? This led me to make an initial, more systematic comparison for which a useful starting point was Higgs’s appendix of ‘chief parallels between Postlethwayt’s Dictionary and Cantillon’s Essai’. It turned out that the variations were frequent and indeed sometimes substantial.

The most obvious explanation for any such differences, I thought initially, was that Postlethwayt had made multiple alterations and additions in the process of adopting parts of a manuscript of Cantillon’s work in his Dictionary. My opinion changed radically, however, when I started to compare the fragments from the Dictionary with the other English version of Cantillon’s work published in the 1750s, namely, Philip Cantillon’s The Analysis of Trade and Commerce of 1759. Starting from the beginning of the Analysis, I found that, from as early as the second chapter, both English texts shared variations when compared to the French text. To be precise, in that chapter the sequence of paragraphs in both English texts, when compared to the order of the French text, is 1, 3, 6, 7, 4, 5, while neither has a counterpart to paragraphs 2 or 8 (see E/D/A7 to E/D/A18 in the present edition). Further along in the texts I started finding passages that occur in both English versions but which do not have an obvious counterpart in the French text (see e.g. the sequence D/A206–D/A212 or D/A257–D/A259). While French paragraphs that have counterparts in one English version only or in neither were much more common, the commonalities between the English versions in particular convinced me that the three versions were not, as has always been supposed, ultimately based on the same source.

Instead, it seems likely that the three publications were based on manuscript versions that differed from each other in substantial ways. Having arrived at this novel conclusion, and wanting to open it for examination, I presented my initial findings (in van den Berg 2012b) and decided to present the full puzzle in the form of the present work. The form of presentation chosen allows a parallel reading of the three main versions that appeared in print in the 1750s, that is to say, the French Essai of 1755, the English fragments from Postlethwayt’s Dictionary of 1751–55, and large parts of Philip Cantillon’s Analysis of 1759. In addition, the current edition attempts to record all variations between those three texts and a number of alternative versions from the same period. In the first place, there are three known French manuscript versions of the Essai, two partial and one complete, which all date from before the publication of the first French print edition. Second, in the years after the first print edition three more editions were published. Third, Postlethwayt plagiarised fragments taken from Cantillon in two of his other works, one published in 1749 and one from 1757. In total therefore the present edition compares eleven different texts, although with regard to any particular passage only some contain relevant content. An overview of the comparisons can be found in Table 4.1b (pp. 40–43), which also explains the coding that has been adopted to facilitate cross-referencing.

Notes

1 Perhaps the only important exception is Karl Marx (1818–83). Whilst his published writings refer to Cantillon relatively little, compared to the attention bestowed on other early authors, notebooks with extensive quotes from the Essai found in Marx’s manuscripts show that he had a keen interest in Cantillon’s work (see Ananyin 2014).

2 Of course Cantillon can neither be retrospectively called a neoclassical, nor a Marxian, nor an Austrian economist (even though some commentators have tried to do especially the latter; see e.g. Hébert (1985) and Rothbard (1995)). The temporal and spatial circulation of ideas resembles that of money and can be described with Cantillon’s own favourite metaphor of a river (cf. E389). It may at times run fast or wind down, split up in different branches and fertilise different grounds. But though this may be of interest to someone downstream, it has little to do with the source.

3 Reprints of this edition were published in 1959 by F. Cass and in 1964 by A.M Kelley. Brewer (2001) provided a new introduction to a further reprint of the Higgs translation, and more recently the translation became freely accessible online at www.econlib.org/library/NPDBooks/Cantillon/cntNT.html.

4 This edition, which was in fact the second Italian translation (see p. 36), included an introduction by Luigi Einaudi. This introduction has recently been published in English translation (Einaudi 2014: 265–75).

2
Historical backgrounds to the texts

Each text has its own particular and at times incompletely known history. These histories are important for assessing the authenticity of and relations between the texts.

2.1 The French versions

2.1.1 The print editions

The first column on the verso pages reproduces the text of the renowned first print edition of the Essai sur la nature du commerce en général. The title page of this anonymous work (see E1), published in May 1755, set a number of puzzles that almost immediately invited various speculations. The first and most important question, as to the identity of the author, was soon put beyond dispute. The earliest reviews in Grimm’s Correspondance littéraire (letter dated 1 July 1755) and Fréron’s L’Année Littéraire (entry 4 August 1755) already agreed that the author had been one Richard Cantillon. The Essai was immediately recognised as an exceptional work and established Cantillon’s early posthumous reputation as a leading economic theorist: Fréron (1755: 68) called the book ‘one of the best that have been written on the subject of trade’, the Marquis de Mirabeau (1756: 85), eulogised Cantillon as ‘the most able man’ to have written on the theory of commerce and insisted that his work was ‘without equal’, and Mably (1757) too styled the Essai ‘the best work that has been written on the subject’. As a result of such endorsements the Journal de Commerce soon referred to the author as ‘le célèbre Cantillon’ (Jan. 1760: 69). But, famous or not, beyond his name only little was known about the man: he had been un Anglais (Grimm [1755] 2006: 133) or Irlandois (Fréron 1755, v: 67) who, after having become rich at the beginning of the 1720s during the time of John Law’s System, had been murdered in London in 1733 or 1734. These sparse details remained practically all that was known about Cantillon until the last decades of the nineteenth century.

The second puzzle concerned the statement on the title page that the work had been ‘traduit de l’anglois’. Both Grimm and Fréron dismissed this notion and asserted that the work had originally been composed in French, the latter further expressing the contrary opinion that ‘it is the English themselves who have translated it into their language from the original of M. Cantillon’ (Fréron 1755, v: 67). Soon after, however, the Marquis de Mirabeau contradicted this view in his hugely popular L’Ami des hommes. Clarifying the statement on the title page of the Essai, but without giving the source of his information, Mirabeau stated that the work had originally been written in English and subsequently translated by Cantillon himself ‘for the use by one of his friends’ (Mirabeau 1756: 85). Remarkably, this particular dispute between the earliest commentators on Cantillon’s work has never been settled. During the last 80 years or so Mirabeau’s view that the Essai was a translation from a text originally written in English has been the most widely accepted (see e.g. Hayek 1932; Fage [1952] 1997: xl; or Hébert 2010: 6). This is mainly due to Henry Higgs who in his famous edition of the Essai of 1931 argued that the presence of many plagiarised fragments in Malachy Postlethwayt’s Universal Dictionary (1751–55) proved the existence of a (lost) English original (Higgs 1931: 383). However, not all commentators have accepted Higgs’s evidence as being decisive; see e.g. Murphy (1986: 250, 2009: 77) and Brewer (2001: x).

Third, the purported place of publication, ‘Londres’, and name of the publisher, ‘Fletcher Gyles dans Holborn’, have been contested since the late nineteenth century. Jevons ([1881] 1931: 341) had a...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Preface
• 1 Introduction
• 2 Historical backgrounds to the texts
• 3 The Higgs translation
• 4 The uses of this edition
• 5 Essay on the Nature of Trade in General
• References
• Index