Introduction

Essai sur la Nature du Commerce en Général should be rightfully considered one of the most important books ever written. It is the first statement of economic theory and not just a single or limited breakthrough, but a comprehensive treatment that explains the organization of commercial society. Prior to Cantillon, writings about the economy were largely driven by considerations of religion, ideology, and interests groups. After Cantillon, there was a scientific model that could be understood and applied. Most importantly, when it was properly understood and applied, it unleashed the market economy and generated great prosperity.

Early in his career, Cantillon worked for a war profiteer in the British government and later for John Law in the Mississippi Company scheme. His first job enabled him to establish a bank in Paris from which he grew rich. Cantillon made a fortune on the value of his shares in the company during the Mississippi Bubble. Subsequently he made more money by selling shares short during the bust and by taking advantage of changes in exchange rates that he correctly anticipated. After the Bubble, he was one of the wealthiest private individuals in the world.

Not unlike the modern day financial scandals, Cantillon was hounded by lawsuits and criminal charges, so much so that his biographer, Antoin Murphy, suggests that rather than being murdered in 1734, Cantillon actually faked his death and made off with his money to South America.

Based on the book itself and other evidence, we are now reasonably confident that Cantillon completed the manuscript in 1730. It could never have been published under the harsh French censorship laws that prevailed throughout the first half of the 18th century and, as a result, it only circulated privately in hand-copied manuscripts. Only after the censorship laws were relaxed was it published in 1755, and even then, it was published anonymously under the name of a defunct foreign publisher.

Least you think the Essai is a dry technical practitioner’s guide to the economy, it should be stressed that Cantillon deals with a wide variety of fundamental and philosophical issues such as the nature of property, the distribution of income, the origin of money, and the role of government. He even criticized an early version of the Malthusian Population theory and offered an accurate prediction of the population of the United States in the 19th century.

Cantillon’s circle of friends and acquaintances reads like a who’s who of the early 18th century intellectuals. His good friend was Lord Bolingbroke, a former Prime Minister of England and a leader of the Jacobite cause. Cantillon met many of the leading intellectuals of the day through Bolingbroke, such as Montesquieu and Voltaire in France and probably Jonathan Swift and Alexander Pope in connection with Bolingbroke’s political activities in England. There is evidence to suggest that, in addition to the infamous John Law, Cantillon also knew and was critical of the economist Charles Davenant and Sir Isaac Newton, who was the director of the Royal Mint.

Cantillon opposed the ruling elite and was friendly with opposition leaders in both of the two great warring powers, England and France. He provided the theoretical superstructure that justified the opposition agenda against big government and showed how taxes, regulations, war, and a large national debt impoverish the people.

Cantillon began his challenge to accepted doctrine on page one when he showed that money was just a medium of exchange and that wealth was not money, but the ability to consume. He demonstrated that the best way to produce consumer goods was to allow free markets where entrepreneurs could be counted on to make self-interested judgments on what would best please their consumers.

Cantillon’s model of the isolated estate is a conceptual analysis of the emergence of the market economy from feudalism. It is the inspiration for Adam Smith’s invisible hand because it demonstrates that entrepreneurial self-interest will regulate the economy of the isolated estate just as well or better than if the estate owner continued to make all the decisions.

The influence of Cantillon’s manuscript was largely unknown and the book had fallen so far into neglect that William Stanley Jevons was said to have “rediscovered” it in the late 19th century. However, we now know that it had a tremendous influence on the development of economics. In addition to Adam Smith, it has now been shown that fellow Scotsman David Hume read the manuscript in some form before publishing his own path-breaking contributions to economics. In France, Mirabeau had a copy for many years and used it as the basis of his many popular works on economics. The publication of the Essai played a pivotal role in the formation of the Physiocrat School of economics in the late 1750s. We also know that it was very influential on the economic thought of Turgot, Condillac, and Jean- Baptiste Say, and subsequently on the French Liberal School that followed. We can also now say that Cantillon was an important influence on Carl Menger, Ludwig von Mises, and Noble Laureate F. A. Hayek, of the Austrian School of economics, and that he provided the “Cantillon Effects,” which are central to the Austrian theory of the business cycle.

Cantillon’s contributions span the entire gamut of economics including entrepreneurship, methodology, theory, microeconomics, macroeconomics, international trade and finance, economic policy, and even areas such as population theory, economic geography, and transport economics. If you want to know the scientific “magic” of the market, here is the man who literally wrote the book.

The case for the book is compelling and so is the case for a new English translation. First, the Essai presents material that is brilliant, but difficult. Even the original French manuscript must have appeared incredibly complex to his early readers, a point noted by Cantillon himself in the text. After all, this was a new science that was fully born in one long stroke of his pen. Remember further that Cantillon died shortly after writing the book and that it was not published until long after his personal associates had died, so there was no one to clarify matters.

Second, the English translation by Henry Higgs is a faithful interpretation, but one that is wholly out of date and which provides little guidance for the reader. In the introduction to the first English edition of the Essai sur la Nature du Commerce en Général, published in 1931, Henry Higgs states that his translation “follows the French text of 1755 with all faults of grammar, spelling, accent and punctuation.” Higgs chose faithfulness over beauty, sometimes perhaps to the detriment of readability. Throughout history, translators have wrestled with the same question or dilemma: balancing faithfulness with beauty. Much as with English, the French language has changed tremendously since the early 18th century, when Cantillon wrote the Essai. A faithful translation, therefore, renders the text in a language that is no longer in use. Our goal differs from that of Higgs in that we want Cantillon’s book to be accessible to the modern reader. Higgs’ translation can only be roughly understood, and in some important instances, is in error.

We remedy these shortfalls in a variety of ways. First, we modernized the text, especially but not limited to capitalization, punctuation, and sentence structure. Second, we have changed the 20th century British translation to reflect terminology of more modern times and we believe that this also provides value and clarity. For example, Higgs translated “intendans ou inspecteurs”—which means administrators or supervisors—into “stewards and bailiffs,” leaving the modern American thinking about airplanes and courtrooms. He also translated “habillement” as “rayment” instead of clothing. In some cases, we restore the text closer to the original French version. An important example of this restoration is Higgs’ translation of the word “entrepreneur”—which plays a central role in Cantillon’s model of the economy—into “undertaker.”

Third, we provide explanatory footnotes that describe the people, places, events, weights, measures and currency values that Cantillon used, and which are no longer commonly understood, as well as descriptions and rationales for any substantive changes from the Higgs translation. Fourth, we provide abstracts for chapters and provide titles for the sections. We also provide graphic illustrations for some of Cantillon’s important contributions, such as the circular-flow diagram of the economy, in order to aid comprehension. We liken the process to restoring a painting or fine piece of furniture—not changing the original—just cleaning it, fixing a few scratches, and putting on a new coat of varnish. This new translation, we hope, will appeal to new readers and seasoned economists alike and give Cantillon’s Essai the attention that it well deserves.

The task of retranslating the Essai sounded like a simple and straightforward project for which we completely underestimated the time and difficulty involved. It has taken several years and unknown hours of work to complete, and we fully acknowledge that it could be better. Finally, we would like to acknowledge the assistance and encouragement of historians of economic thought William Breit, Robert Ekelund, Guido Hülsmann, and especially of Robert Hébert. Historians Donna Bohannon, Joseph Stromberg, and Thomas Woods were also of great assistance. We thank Paul Wicks for copyediting the manuscript. We wish to thank Paul Wicks for copy editing the manuscript and our family and friends, especially Bill Curlee for their support.