Friedrich August von Hayek, Richard Cantillon (1931)

Hayek’s article is a historical and theoretical introduction to the German translation of Cantillon’s Essai sur la nature du commerce en général. Its five sections move from the book’s reception and rediscovery to its analytical achievements, the history of its manuscript, Cantillon’s biography, and the evidence of his influence. Hayek’s central claim is that Cantillon deserves recognition for constructing a coherent causal account of economic life, not merely for anticipating particular doctrines later associated with the Physiocrats or classical economists. The introduction also explains why this achievement remained comparatively unfamiliar in Germany.

The opening section establishes an unusual historical paradox: a foundational work exercised considerable influence before and after publication, yet subsequently disappeared from the discipline’s memory. Published anonymously in 1755, twenty-one years after Cantillon’s death, the Essai circulated earlier in manuscript. Confusion between Richard Cantillon and Philip Cantillon, whose inferior English Analysis of Trade appeared in 1759, helped obscure its authorship and importance. Hayek reconstructs its reception among Mirabeau, Quesnay, Gournay, Turgot, and other eighteenth-century readers, then qualifies the familiar story of Jevons’s rediscovery by acknowledging earlier appreciations, particularly Roscher’s. Nevertheless, Jevons’s 1881 essay and Henry Higgs’s subsequent research decisively restored both the work’s standing and its author’s identity.

German neglect, Hayek argues, reflected more than bibliographical accident. August Oncken judged Cantillon deficient because his economics lacked the moral-philosophical background of Quesnay and Smith. Hayek reverses that assessment: the separation of explanation from ethical prescription is precisely an intellectual accomplishment. Section II accordingly foregrounds Cantillon’s method rather than attempting an exhaustive synopsis of the Essai, whose three parts Hayek provisionally identifies with production, exchange, and international trade.

Cantillon verwendet den Ausdruck „natürlich“ nämlich völlig konsequent in dem Sinn der Verknüpfung von Ursache und Wirkung, also wissenschaftlicher Kausal-erklärung und das Wort kommt in dieser Bedeutung einige dreißig Mal im Essai vor.

English translation: Cantillon uses the expression “natural” entirely consistently in the sense of the connection between cause and effect, that is, scientific causal explanation, and the word occurs in this meaning some thirty times in the Essai.

“Nature” thus signifies causal relations rather than a morally desirable order. Cantillon repeatedly excludes questions of policy expediency and ethical evaluation from his inquiry. His use of an isolated state, ceteris paribus assumptions, and progressively more complex cases of price formation likewise exemplifies disciplined abstraction. For Hayek, scientific economics emerges through the explanatory organization of problems, not through an encompassing philosophy.

Hayek connects this method to Cantillon’s conception of wealth as the means of satisfying human needs and enjoyments. Although land and labour supply its material foundations, the definition of wealth is psychological. Population and wages are then interdependent: customary standards of subsistence help explain reproduction and labour costs, while the relationship between labour and land provides the foundation for Cantillon’s cost theory of value. Hayek’s crucial qualification is that the achievement lies less in specifying normal values than in explaining the forces that repeatedly bring market prices back toward them. Equilibrium is a process requiring causal explanation, not a providential harmony.

The entrepreneur supplies another organizing concept:

Unternehmer ist für Cantillon ganz im modernen Sinn jedermann, insofern er Risikoträger ist und Gewinn im Gegensatz zu Grundrente oder Löhnen als Einkommen bezieht.

English translation: For Cantillon, in the fully modern sense, an entrepreneur is anyone insofar as he bears risk and receives profit, as opposed to land rent or wages, as income.

Entrepreneurship is defined by an economic function rather than a particular occupation. This distinction also clarifies the separation of rent, wages, profit, and interest. Hayek nevertheless considers monetary theory Cantillon’s greatest achievement. Against a simple quantity theory, Cantillon traces how additional money reaches different recipients and alters particular prices successively. He investigates circulation velocity, bimetallism, exchange rates, bank reserves, and interest, distinguishing the temporary effects of monetary expansion from the claim that money quantity determines interest. These analyses demonstrate the same concern with mechanisms that governs his account of prices.

Sections III and IV turn to the documentary conditions under which this achievement can be understood. Hayek separates contradictory contemporary reports from findings substantiated by Higgs. Mirabeau’s manuscripts reveal extensive dependence on Cantillon and, in Hayek’s judgment, an attempt to appropriate his work. Postlethwayt’s borrowings establish circulation before the French publication; they may also indicate access to an English manuscript. The missing statistical appendix remains a substantial loss, although Hayek allows that Cantillon might never have completed it.

Cantillon’s banking career supplies a practical setting for his theoretical insight. Hayek describes his anticipation of the collapse of Law’s system, his profitable sale of pledged Mississippi shares, and the prolonged litigation that followed. These records illuminate his financial expertise without resolving every uncertainty about his life. His family connections make acquaintance with Montesquieu plausible; Bulkeley’s possible role in publishing the Essai remains conjectural.

The final section distinguishes demonstrable borrowing from possible transmission, especially through Hume and Malthus. Hayek regards the similarities as suggestive but does not establish direct influence with certainty. His rehabilitation ultimately rests on analytical achievement rather than priority alone:

Wo man den Beginn einer Wissenschaft ansetzt, ist immer im weitem Maß eine Sache der Willkür.

English translation: Where one places the beginning of a science is always to a large extent a matter of arbitrary choice.

The article’s lasting relevance lies in that distinction. Cantillon matters as an independent theorist whose systematic explanations exceeded the boundaries of established schools. Hayek’s closing editorial remarks, identifying his wife as the German translator and acknowledging unresolved linguistic difficulties, return the argument to its practical purpose: making that achievement available for renewed examination.