Richard Cantillon

Richard Cantillon

Irish economist
Country: Ireland

Content:
  1. Biography of Richard Cantillon
  2. Contributions to Economics
  3. Legacy
  4. Richard Cantillon passed away in London on May 14, 1734.

Biography of Richard Cantillon

Richard Cantillon (approximately 1680–1734) was an Irish economist known for his work on the nature of trade. He was born in County Kerry, Ireland, but little is known about his early life. Cantillon became wealthy as a merchant in London and later as a banker in Paris. Towards the end of his life, he settled in London.

Contributions to Economics

Cantillon gained recognition for his work "Essai sur la nature du commerce en général" (Essay on the Nature of Trade in General), published in French in London in 1755. This work was later acknowledged by the English economist William Stanley Jevons, who referred to it as the "cradle of political economy."

In his book, Cantillon provided a definition of wealth, emphasizing the importance of land and labor. He argued that differences in wages were connected to the time, costs, difficulty, risk, abilities, and responsibility required for a particular type of work. These ideas later influenced Adam Smith's theory of wages.

Cantillon also distinguished between real value, which arises from production costs, and market value, which depends on supply and demand. He believed that money, whether paper or metallic, was not a true measure of a nation's wealth. Instead, he argued that land was the authentic source of wealth. According to Cantillon, land generates three types of income: reimbursement of the land cultivator's expenses, profit for the land's true owner, and profit for the landowner. He further contended that non-agricultural enterprises were unable to provide an equivalent to the third type of income.

Cantillon's work covered various topics, including barter, market prices, money circulation based on mass and velocity, credit, interest and its foundations, fluctuations in interest rates, international trade, and banking. Some of his interpretations anticipated ideas that emerged much later, such as Malthusian theory.

Legacy

Cantillon was the first to use the term "real or intrinsic value" (now known as "normal value") and demonstrated the connection between real value and market value.

Richard Cantillon passed away in London on May 14, 1734.

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