CANTILLON, Richard. Essai sur la Nature du Commerce en Général. Traduit de l’Anglois.

A Londdres [i. e., Paris: Guillyn]: Chez Fletcher Gyles, dans Holborn, 1756. Second edition of a work originally published the year before. 12mo. pp. 427, [5]. Contemporary full sheep, spine gilt. Insignificant foxing. All edges sprinkled. Wear to extremities A very good fresh copy of an exceedingly rare book.
Richard Cantillon, (1685?-1734?), financier and economist, was born at Ballyronan, Ballyheigue, Co. Kerry, second son of Richard Cantillon, a farmer whose ancestors had been dispossessed under Cromwell, and his wife Brigid, daughter of a kinsman, David Cantillon of Kilgobbin, Co. Limerick, and his wife Jane, a sister of Sir Daniel Arthur (d.1705), the banker. Richard honed his financial skills working for the British army’s paymaster-general during the latter stages of the War of the Spanish Succession. Like many Catholics of his class, after the Jacobite defeat at Aughrim, Cantillon looked to France for a career and probably lived there for some time before 1708 when he took out French nationality. It is a fair presumption that he used his family connections to advance himself in finance and banking. Sir Daniel Arthur had three sons, all named Daniel, who had banking interests in London, Paris and Madrid.
He next proved his understanding of the financial markets by making fortunes speculating against John Law’s Mississippi Company and by purchasing ‘put options’ (the right to sell at a predetermined price) during the height of the South Sea Bubble. His successful speculations reinforced his view that the monetary system must be based on intrinsically valuable metals.
The Essai, his only published economic work, carries the imprint of Fletcher Gyles, a leading London bookseller who had died some fourteen years earlier: actually the book was published clandestinely but with a “permission tacite” by Guillyn in Paris. It is notable for its model building, its analysis of market forces and the role of the entrepreneur, its outline of the circular flow of income, and its monetary theory. The Essai had a significant influence on Adam Smith’s famous distinction between market price and natural price. Cantillon also pre-empted later studies of human population, with a brief but almost complete anticipation of the principles of Malthus.
Cantillon’s father had a first-cousin, another Richard Cantillon (known as the chevalier Cantillon), who was established as a banker in Paris. It appears to have been as agent for the chevalier that Cantillon handled funds for British prisoners-of-war in France from 1707 to 1710. He may also have acted for the Arthurs, who were employed by James Brydges, paymaster-general to British forces abroad, to transfer funds to forces in Spain during the war of the Spanish Succession (1701-13). From 1712 to 1722 he was in correspondence with Brydges, who, having profited from unofficial transactions to become fabulously wealthy, introduced him to influential banking friends. Brydges appreciated Cantillon’s flair for accountancy and knowledge of the French finances.
Through Brydges, Cantillon in 1718 became acquainted with John Law, the Scotsman who, with the assistance of the French regent, the duke of Orleans, had in 1716 established the Banque Générale. Soon he was a member of Law’s inner circle and a shareholder in the Mississippi Co., which, like the South Sea Co., existing (ostensibly at least) to develop trade and exploit mineral wealth overseas, converted part of the national debt into its stock in return for trading privileges. In November 1718 Cantillon and Law formed a company to establish a settlement in Louisiana. It was led by Cantillon’s brother Bernard, who returned to France in 1723, having had only limited success. Meanwhile, during the summer of 1719, Richard Cantillon made a fortune speculating on shares and options. In September he was said to have gone to London with £50,000 in his pocket. His motive for leaving France was probably fear of the collapse of the so-called ‘Mississippi system’ created by Law – the merging under central control of the Compagnie de l’Occident and other trading or banking concerns. He returned to Paris in 1720 after the frenetic rise in Mississippi share prices was over and just before they collapsed. In the interval he went into a banking partnership with his London agent John Hughes, putting up capital while Hughes managed. Cantillon prudently left Paris again and bought and sold South Sea shares quickly as they rose and before they too collapsed, thus making a second fortune from speculation. He then spent some time making money in Amsterdam before the stock market crashed there too. Shrewdly he declined Law’s invitation to return to Paris and help him rescue the ‘Mississippi system’.
Owing to the wealth tax imposed by the French government in 1721 he did not return to France until 1727. From the end of 1721, he and Hughes wound down their banking operations. At the end of 1720 Cantillon was owed over £64,000 by his debtors, principally by Lady Mary Herbert, a member of the Powis family, which he set about suing. From 1721 until his demise in 1734 Cantillon was involved in complicated litigation in French and English courts arising from his banking operations. After returning to Paris he was twice very briefly imprisoned and was accused by one of his several adversaries, Christopher Balfe, of attempting to murder him.
Very probably between 1728 and 1730 Cantillon wrote the work of economic theory on which his reputation rests. A bold attempt to define the nature of the economic system, it was published anonymously and posthumously as Essai sur la nature du commerce en général (1755). Despite the statement on the title-page that it was ‘traduit de l’Anglois’ and published ‘à Londres chez Fletcher Gyles’, it was most likely written originally in French and published in Paris. In a garbled and incomplete English translation, ‘The analysis of trade, commerce, coin, bullion, banks and foreign exchanges’ (1759), authorship is misattributed to Philip Cantillon, a London merchant and relation of Richard Cantillon. It was translated into Italian, German and Spanish. The work was mentioned by Mirabeau, François Quesnay, Adam Smith, Arthur Young and by other eighteenth-century writers; but in the nineteenth century it was largely forgotten (Cantillon himself remaining a shadowy figure) until the economist W. Stanley Jevons praised it in ‘Richard Cantillon and the nationality of political economy’ in the Contemporary Review (1881) as ‘more than any other book I know the first treatise on economics’.
Jevons’s discovery of Cantillon’s Essai resulted in many studies and in a scholarly English translation by Henry Higgs , who declared that of over a thousand pre-1734 economic writings he had read he would ‘put Cantillon’s analysis of the circulation of wealth … on the same level of priority as Harvey’s study of the circulation of the blood’.
Cantillon created, in his Essai, a model of the economy showing the key roles of markets, entrepreneurs and a monetary system of exchange. His treatise dealt with topics later to concern classical and neo-classical economists: population growth and distribution; determination of prices, wages and interest; the role of the entrepreneur (which he was the first to emphasise); banking operations and the financing of trade; responses of exchange rates and price structure to changes in money supply. He posed a fundamental question: can the economy be stimulated by monetary expansion or reductions in the interest rate or alterations in the exchange rate? Cantillon greatly advanced economic theory. His work on the role of markets undoubtedly influenced Smith both directly and, through its influence on the French economists, indirectly.
Cantillon’s demise is mysterious. His house in London, in Albemarle St. (beside Bolingbroke’s), was consumed by fire on the night of 14 May 1734. He was presumed to have perished, as a servant had put him to bed and he was never seen again. However, circumstantial evidence, especially the sudden appearance and disappearance in 1734 in the Dutch colony of Surinam in South America of a suspicious foreigner calling himself the ‘chevalier de Louvigny’ and in possession of some documents belonging to Cantillon (statements of his bond holdings and a new will, dated 11 April 1734), suggests that Cantillon may have ‘fabricated an elaborate charade to facilitate his disappearance from Europe’ (Anton Murphy). In July 1732 (the date of an earlier will) he owned estates in Lincolnshire and in Louisiana and had large sums of money on deposit in banks in London, Amsterdam, Brussels, Vienna and Cadiz. In February 1722 he married, when in London, Mary Anne, daughter of Count Daniel O’Mahony (d. 1714), a native of Killarney, Co. Kerry, who was well placed at the Jacobite court and rose to be a general in the French service. Then aged twenty, Mary Anne was admired by Montesquieu and accompanied Cantillon on his visit to Italy in 1723. Cantillon had her portrait painted by Nicholas Largillière and in 1726 purchased for her a substantial property in Paris. But by 1733 the marriage was failing and Mary Anne Cantillon was paying attention to a French army officer and friend of Montesquieu, Francis Bulkeley, whom she was to marry (October 1736) after her husband’s death. She died 17 February 1751. Richard and Mary Anne Cantillon’s only surviving child, Henrietta (1726-61), married twice. She and her second husband, Robert Maxwell (1720-79), 1st earl of Farnham, had a daughter, Henrietta, who married Denis Daly, MP for Co. Galway. (DIB).
“The most complete and systematic treatise on economics before ‘Adam Smith’s Wealth of Nations’” (Mai), “notable for its model building, its analysis of market forces and the role of the entrepreneur, its outline of the circular flow of income, and its monetary theory” (ODNB).

[Cat 161]