by Cantillon
[Title Page and Bibliographic Information]: This segment contains the title pages and bibliographic details for the 1931 German edition of Richard Cantillon's 'Essai sur la nature du commerce en général'. It identifies Friedrich A. Hayek as the editor and Hella Hayek as the translator, providing historical context for the publication of this classic economic text. [Introduction by Friedrich A. Hayek: The Rediscovery of Cantillon]: In this extensive introduction, Friedrich A. Hayek discusses the historical significance and the 'miraculous' rediscovery of Richard Cantillon's work. He traces the influence of the 'Essai' on Adam Smith and the Physiocrats, noting how the work was lost for a century before being championed by W. Stanley Jevons as the 'cradle of political economy'. Hayek contrasts the reception of Cantillon in England and France with his relative obscurity in Germany, critiquing previous German scholars like August Oncken who dismissed Cantillon's scientific contributions. [Analysis of Cantillon's Economic Theory and Methodology]: Hayek provides a detailed analysis of Cantillon's theoretical innovations. He highlights Cantillon's use of 'isolating abstraction' and the 'ceteris paribus' clause, his psychological definition of wealth, and his sophisticated theories on population, wages, and the role of the entrepreneur as a risk-taker. The segment particularly emphasizes Cantillon's monetary theory, including his critique of Locke's quantity theory and his explanation of how changes in the money supply affect prices sequentially (the 'Cantillon Effect'). Hayek also notes the loss of the original statistical appendix. [Biographical Research and the Mystery of Cantillon's Life]: This section explores the biographical details of Richard Cantillon, much of which remains shrouded in mystery. Hayek utilizes research by Henry Higgs to clarify Cantillon's involvement in the Mississippi Scheme, his banking activities in Paris, and his eventual murder in London in 1734. It also details the complex history of the 'Essai' manuscript, including the Marquis de Mirabeau's long-term possession of it and his attempts to plagiarize or adapt the work before its eventual publication in 1755. The segment also touches on Cantillon's social circle, including figures like Bolingbroke and Montesquieu. [Cantillon's Influence and Translation Notes]: Hayek concludes the introduction by evaluating Cantillon's influence on subsequent thinkers like David Hume and Germain Garnier. He suggests that Hume likely had access to the manuscript or Postlethwayt's plagiarized versions. Finally, Hayek provides notes on the German translation, acknowledging the difficulties posed by Cantillon's 18th-century French and specific economic terminology like 'fonds'. [Table of Contents and Front Matter]: This segment contains the German table of contents for Cantillon's 'Essai sur la Nature du Commerce en Général', listing the chapters of the three parts, and includes a facsimile description of the 1755 title page. [Part I: Wealth, Society, and Land Ownership]: Cantillon defines wealth as the maintenance and conveniences of life derived from land and labor. He explores the origins of society and property, arguing that all classes depend on landowners. He discusses the formation of villages, market towns, and cities based on economic necessity and transport costs. He introduces the concept of 'intrinsic value' as the measure of land and labor required for production, contrasting it with fluctuating market prices. He also analyzes the 'Par' or equation between land and labor, citing Petty and Locke. [Part I: Consumption, Population, and Metals]: The author argues that the tastes and habits of landowners determine land use and market prices. Population size is shown to depend on the means of subsistence, which is dictated by the lifestyle of the upper classes; for example, a preference for horses or foreign luxuries reduces the food supply for the local population. Cantillon compares population density in China versus the Americas. He concludes the first part by discussing why gold and silver became the universal measure of value due to their durability and portability. [Part II: Money, Circulation, and Interest]: This part focuses on the circulation of money and the determination of interest rates. Cantillon explains that market prices are determined by the quantity of goods versus the quantity of money offered. He introduces what is now known as the 'Cantillon Effect': the process by which an increase in the money supply (from mines or trade) enters the economy through specific channels, raising prices sequentially rather than all at once. He critiques Locke's simpler quantity theory. Interest is defined as a result of the demand from entrepreneurs and the risks taken by lenders, rather than just the quantity of money. [Part III: Foreign Trade, Exchange Rates, and Banking]: The final part examines international trade and finance. Cantillon explains exchange rates as a function of the balance of trade and the costs of transporting specie. He provides a detailed critique of Sir Isaac Newton's 1717 revaluation of the guinea, arguing it caused a shortage of silver. He analyzes the role of banks, noting they increase the effective money supply by accelerating circulation but warns that their credit is 'fictitious' and can lead to bubbles. He discusses the South Sea Bubble and the use of bank credit by ministers to manipulate government debt prices.
This segment contains the title pages and bibliographic details for the 1931 German edition of Richard Cantillon's 'Essai sur la nature du commerce en général'. It identifies Friedrich A. Hayek as the editor and Hella Hayek as the translator, providing historical context for the publication of this classic economic text.
Read full textIn this extensive introduction, Friedrich A. Hayek discusses the historical significance and the 'miraculous' rediscovery of Richard Cantillon's work. He traces the influence of the 'Essai' on Adam Smith and the Physiocrats, noting how the work was lost for a century before being championed by W. Stanley Jevons as the 'cradle of political economy'. Hayek contrasts the reception of Cantillon in England and France with his relative obscurity in Germany, critiquing previous German scholars like August Oncken who dismissed Cantillon's scientific contributions.
Read full textHayek provides a detailed analysis of Cantillon's theoretical innovations. He highlights Cantillon's use of 'isolating abstraction' and the 'ceteris paribus' clause, his psychological definition of wealth, and his sophisticated theories on population, wages, and the role of the entrepreneur as a risk-taker. The segment particularly emphasizes Cantillon's monetary theory, including his critique of Locke's quantity theory and his explanation of how changes in the money supply affect prices sequentially (the 'Cantillon Effect'). Hayek also notes the loss of the original statistical appendix.
Read full textThis section explores the biographical details of Richard Cantillon, much of which remains shrouded in mystery. Hayek utilizes research by Henry Higgs to clarify Cantillon's involvement in the Mississippi Scheme, his banking activities in Paris, and his eventual murder in London in 1734. It also details the complex history of the 'Essai' manuscript, including the Marquis de Mirabeau's long-term possession of it and his attempts to plagiarize or adapt the work before its eventual publication in 1755. The segment also touches on Cantillon's social circle, including figures like Bolingbroke and Montesquieu.
Read full textHayek concludes the introduction by evaluating Cantillon's influence on subsequent thinkers like David Hume and Germain Garnier. He suggests that Hume likely had access to the manuscript or Postlethwayt's plagiarized versions. Finally, Hayek provides notes on the German translation, acknowledging the difficulties posed by Cantillon's 18th-century French and specific economic terminology like 'fonds'.
Read full textThis segment contains the German table of contents for Cantillon's 'Essai sur la Nature du Commerce en Général', listing the chapters of the three parts, and includes a facsimile description of the 1755 title page.
Read full textCantillon defines wealth as the maintenance and conveniences of life derived from land and labor. He explores the origins of society and property, arguing that all classes depend on landowners. He discusses the formation of villages, market towns, and cities based on economic necessity and transport costs. He introduces the concept of 'intrinsic value' as the measure of land and labor required for production, contrasting it with fluctuating market prices. He also analyzes the 'Par' or equation between land and labor, citing Petty and Locke.
Read full textThe author argues that the tastes and habits of landowners determine land use and market prices. Population size is shown to depend on the means of subsistence, which is dictated by the lifestyle of the upper classes; for example, a preference for horses or foreign luxuries reduces the food supply for the local population. Cantillon compares population density in China versus the Americas. He concludes the first part by discussing why gold and silver became the universal measure of value due to their durability and portability.
Read full textThis part focuses on the circulation of money and the determination of interest rates. Cantillon explains that market prices are determined by the quantity of goods versus the quantity of money offered. He introduces what is now known as the 'Cantillon Effect': the process by which an increase in the money supply (from mines or trade) enters the economy through specific channels, raising prices sequentially rather than all at once. He critiques Locke's simpler quantity theory. Interest is defined as a result of the demand from entrepreneurs and the risks taken by lenders, rather than just the quantity of money.
Read full textThe final part examines international trade and finance. Cantillon explains exchange rates as a function of the balance of trade and the costs of transporting specie. He provides a detailed critique of Sir Isaac Newton's 1717 revaluation of the guinea, arguing it caused a shortage of silver. He analyzes the role of banks, noting they increase the effective money supply by accelerating circulation but warns that their credit is 'fictitious' and can lead to bubbles. He discusses the South Sea Bubble and the use of bank credit by ministers to manipulate government debt prices.
Read full text