Richard Cantillon: First of the Moderns. IAuthor(s): Joseph J. SpenglerSource: The Journal of Political Economy, Vol. 62, No. 4 (Aug., 1954), pp. 281-295Published by: The University of Chicago PressStable URL: http://www.jstor.org/stable/1827232Accessed: 11/10/2010 04:10

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THE JOURNAL OF

POLITICAL ECONOMY Volume LXII AUGUST 1954 Number4

RICHARD CANTILLON: FIRST OF TIHE MODERNS. I

JOSEPH J. SPENGLER Duke University

It is the fate of anonymous works ... to have their ideas pilfered by con- temporaries and to be forgotten by later generations.-CIIARLEs RIST.

T HE appearance of Professor Alfred Sauvy's splendid new edition of Richard Cantillon's Essai sur la

nature du commerce en general' raises once again the question: Who is the founder of modern political economy? According to Karl Marx,2 it was Sir William Petty; according to others, Quesnay or Adam Smith. A review of Cantillon's system of principles and injunctions suggests, however, that if the multiple origin of political enonomy

1 This edition (hereafter cited as "Sauvy, Essai") includes studies and commentaries by Anita Page, A. Fanfani, Louis Salleron, the editor, and the author of the present essay, notes by Louis Salleron, and a list of the works in which there is reference to Cantillon's Essai; it was published in Paris, in 1952, under the auspices of the Institut National d'Etudes D6mographiques. I have in- cluded in the present essay portions of my com- mentary, in French, in the Sauvy edition. For the reader's convenience I shall refer to the Essai by book and chapter, using for this purpose Roman and Arabic numerals; occasional page references are to the Sauvy edition; the English is that of Cantillon as rendered by Higgs (see n. 3 below).

2 Theories of Surplus Value, trans. G. A. Bonner and Emile Burns (New York, 1952), p. 15.

is ignored, Cantillon has a very good claim to having been the principal fore- runner of both the classical and the neo- classical schools.

I

Considerable information has been assembled respecting the publication of the Essai and the fluctuations in public esteem undergone by its various parts.'

I Sauvy's new edition is the principal repository of this information. The Henry Higgs edition (here- after cited as "Higgs, Essai") includes both the French original and Higgs's English version, to- gether with a summary of his own research and W. S. Jevons' important paper, "Richard Cantillon and the Nationality of Political Economy" (which first appeared in the Contemporary Review, Janu- ary, 1881). On Cantillon's life and his relations with the Marquis de Mirabeau see also Higgs, "Richard Cantillon," Economic Journal, I (1891), 262-91. Higgs's other studies of Cantillon include The Physiocrats (London, 1897) and "Cantillon's Place in Economics" (Quarterly Journal of Economics, VI [1892], 436-56). An excellent account of Cantillon's life and the fortunes of his Essai is given by F. A. Hayek in his introduction to the German transla- tion (Jena, 1931); this introduction appears in French translation in Revue des sciences keonomiques (Liege), Vol. X (1936), and in Italian translation in

281

282 JOSEPH J. SPENGLER

Written between 1730 and 1734, the Essai was not published in entirety until 1755. The English original must have gotten into the hands of Malachy Postlethwayt, who incorporated some six thousand words of the Essai in a 1749 publication and most of it in his Universal Dictionary of Trade and Com- merce (1751-55) and a portion of the eleventh chapter of Part I of the Essai in his Great Britain's True System (1757).4 The French translation of the Essai, reportedly by Cantillon himself, after supposedly remaining sixteen years in the hands of the Marquis of Mirabeau, was restored to its rightful owner at the latter's request; and from this manu- script, presumably, the Essai was printed in London in 1755.5 Two reprints were

La Reforma social (1932). J. Hone, in his "Richard Cantillon, Economist-Biographical Note" (Eco- nomic Journal, LIV [1944], 96-100), supplies Can- tillon's genealogy and the supposed date of his birth. In "A Forgotten Quotation about Cantillon's Life" (Economic Journal, X III [1933], 534-37) Luigi Einaudi recalls Du Hautchamp's report about Cantillon, one of the forty-six acquiring first-class fortunes through John Law's "System" in 1719-20, who made 20,000,000 livres on his "Mississippi" speculations in this interval. Cantillon's contribu- tions to the physiocratic system are treated by Georges Weulersse in Le 1louvement plhysiocratique en France (Paris, 1910); see also my French Predeces- sors of Malthus (Durham, N.C., 1942) and my "The Physiocrats and Say's Law of Markets," Journal of Political Economy, LIII (1945), 193 ff., 317 ff.

4Postlethwayt, who usually acknowledged his sources, did not refer to Cantillon's manuscript, perhaps because he was under obligation not to re- veal the source. From Postlethwayt's Dictionary perhaps Joseph Harris drew the Cantillon material included in his Essay upon Mioney and Coins (London, 1757). On Harris and Postlethwayt see E. A. J. Johnson, Predecessors of Adam Smith (New York, 1937), esp. chap. x and pp. 405 ff.

I While the identity of this rightful owner is not known, he may, as Hayek suggests, have been Francis Bulkeley, husband of Cantillon's widow; for the latter died in 1749 or 1750, while Bulkeley lived until January 14, 1756. Mirabeau, who pro- fessedly was held back from publishing the manu- script by its stylistic imperfections and the lack

issued in 1756, one in France and one as part of a collection put out in Amsterdam by Eleazar de Mauvillon, father of the German Physiocrat, Jakob Mauvillon; but neither appears to have sold well. In 1767 an Italian translation was brought out. Presumably because of the lapse, even before the close of the eight- eenth century, of interest in Cantillon's work, no additional edition appeared until 1892, when Harvard University Press brought out an essentially fac- simile reproduction of the French origi- nal.6 This issue apparently was prompted by W. S. Jevons' discovery of the Essai's great merit to the world of econo- mists and by 1-lenry Higgs's continua- tion of the work initiated by Jevons. In 1931 appeared two translations of the Essai, one German, edited with an intro- duction by F. A. 1-ayek, and one Eng- lish,7 accompanied by much supplemen- tary material, most of it by Higgs.

The influence of the Essai upon the development of economic thought seems

of the statistical supplement, proposed to write a book based on the manuscript; whereupon pre- sumably the rightful owner, preferring the manu- script to be printed as it stood, called it back and had it printed. Mirabeau actually had done an abridgment of the Essai manuscript, supplemented 1)y additions of his own, and a closet copy under the head of MA1moire sur la population; but these papers were not printed. Instead, in 1756, he composed his famous L'Ami des homes (Avignon, 1757), in which he incorporated some of Cantillon's ideas (see Higgs, "Richard Cantillon," op. cit., pp. 263-70; Georges Weulersse, Les Manutscrits gconoiniques de Franfois Quesnay et doJ Marquis de Mlirabeau aux Archives rationales [Paris, 1910], pp. 2-3, 19-20; Sauvy, Essai, pp. lxviii-lxxiii).

6 A much-mutilated abridgment, based upon the French edition, by Philip Cantillon, one-time Lon- don merchant and a first or second cousin of Richard Cantillon, is hardly definable as an edition (see Higgs, Essai, pp. 376-78).

7Higgs describes his translation, much of it based upon Postlethwayt's reproductions of the English original, as "near to a reconstruction of the English original " (ibid., p. 384).

CANTILLON 283

to have been considerable. Many who wrote on economic subjects in the eighteenth century were familiar with Cantillon's work and made use, with or without acknowledgment, of his materi- als and ideas or were influenced by them. Among those appreciably influenced were Postlethwayt, Harris, Mirabeau (especially before he became a Physio- crat), Quesnay,8 Gournay, Graumann, Accarias de Serionne, James Steuart, Adam Smith, Condillac, J. G. Busch, Pluquet, Germaine Garnier (in his earli- er writings), and Peuchet. Among those somewhat influenced were Turgot, Filan- gieri, Beccaria, Roederer, and, at least indirectly, Genovesi, Paley, and Mal- thus. Dubuat-Nancay, De Meilhan, Moheau, Forbonnais, Necker, Butel- Dumont (in part a critic), and Say may have been influenced by Cantillon's ideas. Among those who at least knew Cantillon's work are numbered Dupont de Nemours, Ferrara, Freron, Grimm, Mably, Morellet, Savary, Graslin, J. F. von Pfeiffer, and G.-A. Will. Arthur Young referred to Cantillon's work but was reportedly not influenced by it, hav- ing gotten elsewhere his idea that popu- lation growth depends upon the state of employment and the demand for labor. Hume must have known of Cantillon's manuscript, but he was little if at all in- fluenced by it, missing the import of Cantillon's brilliant analysis (which com- pares favorably with Keynes's) of the response of the price structure to changes in the quantity of money. Except for occasional references to his work before 1860 (e.g., by Ganilh, Rae, and Daire)

8 While some of the Physiocrats' views (e.g., on the role of land, rent, circular flow, money) were influenced by Cantillon, other of their views (e.g., on luxury, consumption, production, trade) differed from his. Upon Mirabeau's becoming associated with Quesnay, his esteem for Cantillon's ideas declined greatly (see my studies cited in n. 3).

and occasional short appreciations of his work (e.g., those of G. Kautz, De La- vergne, Von Sivers, and Roscher) in 1860-80, Cantillon's work received no critical attention in the nineteenth cen- tury until after Jevons' fine paper (1881) had recalled its merits to the attention of economists.9

II

Much of the life of Richard Cantillon, author of the Essai, remains enveloped in mystery. He was born in Ireland, in March, 1697, according to Hone, and some seven to seventeen years earlier, according to others.10 His ancestors had come to England with William the Con- queror, and at least some of their descend- ants had settled in Ireland, among them Richard's ancestor, Roger Cantil- lon of Ballyheigue, in county Kerry, who married a Stuart, Elizabeth, in 1556.11 Richard, the economist, was the son of Philip Cantillon of Ballyheigue and the

9 The above paragraph is based upon Sauvy, Essai, pp. 177 ff.; Higgs, "Richard Cantillon," op. cit., pp. 262-63, and Essai, pp. 391-92; Hayek, loc. cit.; Johnson, op. cit., chap. ix; A. Fanfani, Del Mercantilismo al liberismo (Milan, 1936), chap. iv; A. W. Marget, The Theory of Prices (New York, 1938-42), I, 307-10, II, 24, 29, 125, 130, 308-10; Ren6 Maunier, "Theories sur la formation des villes," Revue d'economie politique, XXIV (1910), 6394-9; A. Landry, "Une Th6orie n6gligee: De influence de la direction de la demande sur la productivity du travail, les salaires et la population," Revue d'economie politique, XXIV (1910), 314-23, 326-74; Jacob Viner, Studies in the Theory of Inter- national Trade (New York, 1937), pp. 74, 78 ff.; my French Predecessors of M althus, esp. chaps. iv-v; Charles Rist, History of Monetary and Credit Theory (New York, 1940), passim; J. M. Keynes, Treatise on Money (New York, 1930), chap. vii; James Bonar, Theories of Population from Raleigh to foung (London, 1931), p. 234. The Essai referred to in E. Daire (ed.), (Euvres de Turgot (Paris, 1844), I, 344-45 n., is not Cantillon's.

10 See Hone, op. cit., p. 97, and Higgs, Essai, p. 366. Professor Page considers Hone's finding in- contestable (Sauvy, Essai, p. xxiv).

11 Hone gives the date of this marriage as 1556 (op. cit., p. 99) and Higgs (Essai, p. 365) as 1536.

284 JOSEPH J. SPENGLER

nephew of the chevalier Richard Cantil- ion, banker to the Stuart Pretender in Paris, whither young Richard went in 1716.12 Most of the Cantillons were Catholic as well as Jacobite, though re- ligion sat lightly on some, among them Richard, the economist."3 The French Cantillons (become extinct in 1940), 1I-one believes, are descended from the economist's brother, James, probably through his son Thomas. Richard, the economist, was murdered in London on the night of May 13, 1734, by his former cook, and his body was burned to ashes along with many of his literary docu- ments, the house probably having been set on fire to hide the murder.

While Cantillon was engaged prin- cipally in banking, he also appears to have traded in wine, silk, and copper. Apparently he began his banking opera- tions in France rather than in England, perhaps because his uncle, the chevalier, was established in Paris. Richard is re- ported as having been engaged in bank- ing in Paris during most of 1716-20, in the latter part of which period he profited greatly at the expense of John Law's "System." He quit Paris in 1720 and was away for most of eight years, travel- ing extensively on the Continent and in England. He lived in Paris in 1729--32,

12 Upon his death in 1717 the chevalier was found to be insolvent. Richard, the economist, himself a principal creditor, paid the unrequited claims of the other creditors.

13 Mirabeau, in L'Ami des homes, character- ized the author of the Essai as a Protestant, pre- sumably, suggests Higgs, because Cantillon (in Essai, I, 16), like Petty, had described holy days and the activities of monks as wasteful, Petty (see C. 11. Hull [ed.], Economic Writings of Sir IV. Petty [Cambridge, 18991, pp. 216, 218) estimating that the Protestants worked about one-tenth more days per year than Catholics in Ireland (see Higgs, "Richard Cantillon," op. cit., p. 273; and Mirabeau's defense of holidays, cited in Sauvy, Essai, pp. 52- 53 nn.). Cantillon (ibid., p. 103) attributed the decline in French cloth manufacture to the driving- out of the Huguenots.

his stay including a few days in prison; then he moved to Utrecht and Brussels and, in 1734, to London. His fortune (much of it made possible by the failure of Law's scheme) at the time of his death was extensive, varied, and dispersed; it included houses and holdings in a num- ber of countries and places.14

The Essai, embodying as it does Can- tillon's reactions to views of contem- poraries and his reflections upon his and other experiences in the world of affairs, reveals something of his mind and its operations. A man of "profound erudi- tion" (reports Mirabeau) who usually "read for three hours or so in bed," Can- tillon was well informed concerning mon- etary history and economic literature, though not so well as Adam Smith. Can- tillon refers, in the Essai, to Cicero, Livy, the two Plinys, Petty, Davenant, Locke, Halley, King, Newton, Vauban, Boizard, casuist writers on usury, the Book of Genesis, and the author (proba- bly Boisguillebert or Boulainvilliers) of an Etat de la France. He must have been familiar with the works of Dupuy, Savary, and others on foreign exchange, and he was familiar with literature re- porting travelers' observations. Of the authors he specifically mentions, Locke and Petty seem to have stimulated him most, though he criticized various ideas of each. Cantillon must also have been familiar with and even influenced by the writings of authors whom he does not identify. He does not mention Law, with whom he agreed on a minor point and against whose theories much of Cantil-

14 This paragraph and the preceding one are based on Hayek, Higgs, Hone, and Page. Cantillon's seeming passion for anonymity is symbolized by the word "inconnu," which Du Hautchamp inserted after Cantillon's name in a column headed "Re- marques" intended to provide supplementary information respecting the "Mississippiens" (see Einaudi, op. cit., pp. 535-36).

CANTILLON 285

Ion's treatment of monetary matters is directed. His description of land as "the Source or Matter from whence all Wealth is produced" and of man's labor as "the Form which produces it" is re- nmindful of Aristotle (I, 1, 10).1' Certain of his views resemble views expressed by Boisguillebert.16 Cantillon's stress upon the homeostatic and self-adjusting char- acter of the economy and upon the role of self-interest in bringing adjustment about may reflect the influence of Man- deville, North, and others,17 just as his account of the origins of property may reflect the influence of Tobbes rather than that of Locke.-8

15 E.g., cf. Aristotle Metaphysics vii. 8. This Aristotelian formulation, still substantially present in J. B. Say's Treatise on Political Economy (e.g., see 4th ed. [Philadelphia, 1841], Book I, chap. i), could have been suggested by French legal or other sources, Higgs believes (see "Richard Cantillon," op. cit., pp. 262-63).

16 See Fanfani (op. cit., pp. 75-89), who treats also (ibid., chap. ii) of Cantillon's indebtedness to Locke and Petty. Cantillon's definition of wealth as "la nouritture, les commodities & les agr6mens de la vie" resembles Boisguillebert's; but the latter stressed far more than did Cantillon the importance of mass consumption (see Hazel Van Dyke Roberts, Boisg-lilbert [New York, 19351, pp. 285 ff.; Sauvy, Essai, p. 104 n.).

17 E.g., cf. Cantillon's comment (I, 9) on the use- lessness of charity schools with the similar comment of Mandeville in The Fable of the Bees (see F. B. Kaye ed. [Oxford, 1924], I, 299-300) or the place of self-interest in Cantillon's system with that in Mandeville's system. Petty observed that men are more likely to put forth effort when it is to their advantage to do so (cf. Hull ed., e.g., pp. 201-2), but he did not apparently consider this disposition sufficient to organize men into an adequately func- tioning economy. In the Preface (now attributed to Roger North) to Sir Dudley North's Discourses upon Trade (London, 1691) it is said that "no Laws can set Prizes in Trade, the Rates of which, must and will make themselves" and that such laws are "l)rej~lldicial" to trade. Mandeville (op. cit.) wrote that the required "Proportion as to Numbers in every Trade finds it self, and is never better kept than when no body meddles or interferes with it." Mandeville may have been influenced by North (see Kaye ed., under "North," in index to Kaye's commentary).

Explicit theory and empiricism ar e fruitfully combined in the Essai. Though, as Marx implied,"9 Cantillon remained under the influence of his feudal, land-economy surroundings, his theory, the outlines of which will be pre- sented, usually is potentially general- izable even when it was not actually generalized. His empiricism is manifested in the information with which the Essai is shot through20 and in Mirabeau's re- port of his field-work methods:

One of his friends told me that he found him one day at home in Paris in his dressing gown with Livy on his desk. "I am going," he said, "to make a little trip. There has always been a blunder as to the value of the coins with which the Romans ransomed their city from the Gauls. One of these coins is in the collection of the Grand Duke and I am going to verify its weight and alloy." At this moment the horses arrived and he took leave of my friend to get into the coach. In these voyages he made certain of everything, got out of his carriage to question a labourer in the field, judged the quality of the soil, tasted it, drew up his notes, and an ac- countant whom he always took with him put them in order when they stopped for the night. A mass of precious manuscripts perished with him .... 1

18 Possession, Cantillon believed, commonly originated in violence, with ownership sooner or later passing into the hands of a few (I, 2, 11). Presumably Cantillon found to his liking HIobbes's description of human behavior as self-regarding (e.g., see the latter's Leviathan [16151], Part I, chaps. xi-xv).

19 Capital, Kerr ed., III, 910. 20 This information is but a fraction of that

assembled in the lost statistical supplement to the Essai which apparently included, along with other matter, "a rudimentary study of workmen's budgets in the different countries of Europe which would have afforded interesting comparison with Le Play's great work, Les Ouvriers Europeens" (see Higgs, Essai, p. 385). Though Mirabeau re- ported the supplement to have been destroyed (see Sauvy, Essai, p. lxxi), scholars still hope that a copy may be found hidden away in some archives.

21 See Sauvy, Essai (where Mirabeau's remarks, put down about 1750 and now in Arch. Nat. M. 780, are cited in extenso), p. lxx; the translation is

286 JOSEPH J. SPENGLER

That in Cantillon's mind qualities es- sential to both speculator and economist were combined in an unusual degree is testified to by Higgs as well as by Mirabeau, who remarked also on his cosmopolitan temper, a temper probably nourished both by the need of the specu- lator to be rootless, impersonal, and flexible and by the need of one required to live in divers religious spheres to avoid heavy psychological commitment to any. Hliggs wrote:

The lengthy English correspondence shows Cantillon to have been a person of extreme ability and very great energy.... The impres- sion left on the mind by a perusal of Cantillon's letters is that the writer was possessed of great clearness and grasp, quick to penetrate am- biguity or weakness of argument, able at com- bination and calculation, and so thorough a master of the foreign exchanges that his specula- tions exhibit a scientific prevision amounting almost to certainty.22

Mirabeau testified: He foresaw the complete course of the famous

system of Mr. Law, and, compelled by cir- cumstances to take part in it, he quitted the theatre of this astonishing revolution leaving his correspondent with orders in advance as to the different stages of the cycle which this catastrophe would run.23

Cantillon's gifts as a theorist, gifts reinforced (as Higgs observes) by a cos- mopolitan experience which sharpened his capacity to distinguish the persisting and the general from the accidental and the particular, and gifts favorably com- mented upon by many students of the

Higgs's (cf. Essai, p. 382). While Cantillon con- sidered approximations to reality useful, he did not represent them as more than approximations; and, while he considered "Statistics . . . left to imagina- tion" especially "subject to error," he believed there was no branch of knowledge "more demonstrable" than statistics "based upon detailed facts" (see Sauvy, Essai, pp. 74-75).

22 See "Richard Cantillon," op. cit., pp. 285, 289. Cf. Rist, op. cit., chap. i, sec. 3.

23 See Sauvy, Essai, p. lxix; Higgs, Essai, p. 381.

Essai, may be illustratively suggested here, with more detailed evidence re- served until later. For example, Cantil- lon apparently conceived of the elements composing the European economy as constituting an organized system under the empire of mechanisms which oper- ated to achieve a kind of equilibrium. This equilibrium was accomplished prin- cipally through the activities of an entre- preneurial class whose members assumed the risk and the uncertainty inherent in the prevailing economic society and, guided by the behavior of buyers and sellers and by the movements of prices, continually brought particular supplies and particular demands into balance. Cantillon thus looked upon the European economic society as a kind of network of reciprocity, given hierarchical form by prevailing institutions and kept in adjustment by the play of self-interest, into which individuals and groups were bound by "need and necessity."24 Again, the term "nature" in the title of the Essai apparently referred to the system of links binding men and groups together in an economic society, while the terms "natural" and "naturally," used some thirty times by Cantillon, implied the existence of functional or cause-effect relationships which, though sometimes hidden by extraneous circumstances, were fundamental, persistent, and com- paratively immutable, economic systems being what they then were. Presumably because Cantillon considered these re- lationships relatively immune to inter- ventionism and because he was inter- ested almost entirely in describing and analyzing the economic system and the behavior of the individuals and institu- tions constituting it, he frequently, but not always, eschewed making ethical

24 I, 2, 12 (p. 28), 13; II, 2.

CANTILLON 287

evaluations of economic outcomes. "Cela n'est pas de mon sujet," he remarked with respect to matters such as the sanc- tionability of monopolistic pricing or the preferability of a smaller higher-income to a larger lower-income population.25 His theoretical acumen was manifested also in his use of concepts of both closed and open states (i.e., economies) and in his employment of relatively simple models occasionally involving what later came to be known as conjectural his- tory.26 Finally, his theoretical skill in treating monetary and related questions, together with his handling of empirical information, probably contributed ap- preciably to the formulation of what later became the theory of liberalistic- capitalistic economics.27

III

Having treated of the fortunes of the Essai and its author, we turn to its con- tents. In this section we review his opin- ions respecting population and related questions, since the materials falling in this category illustrate the institutional background and premises Cantillon had in mind when discussing nondemograph- ic questions-premises, incidentally, which sometimes prevented his general- izing and universalizing as much as pos- sible the principles he set down. In the next section we treat of his value and

25 I, 13, 15; II, 5; III, 5. Cantillon, after charac- terizing Petty's "research" into the "par" between land and labor as "fanciful and remote from natural laws, because he has attached himself not to causes and principles but only to effects," extended this criticism to Locke, Charles Davenant, and other English authors (I, 11).

26J, 12, 14-15, 17; IIT, 3; p. 85. On the use of conjectural historical models in eighteenth-century Europe see F. J. Teggart, Theory of History (New Haven, 1925), passim.

27 On his contribution to liberalistic-capitalistic economics see Fanfani, op. cit., esp. pp. 121-26, and Sauvy, Essai, pp. xxi ff.

distributive theory; in Sections V-VI his monetary, banking, price, and re- lated theories are discussed. In the clos- ing section some attentio-,n is given to the influence of certain of his views.

Cantillon's views on population and related matters may be grouped under five heads: (1) the mechanisms by which numbers are adjusted in time and space; (2) the demand for labor and popula- tion; (3) foreign trade, population capac- ity, and population growth; (4) the genesis of living standards; and (5) the distribution of population in space.

1. The mechanisms through whose operation population becomes adjusted to the means available for its support are three. (i) When the demand for labor declines in a locality, internal emigration tends to remove labor and population from that locality; and, when the de- mand declines in a country generally, external migration removes some of the population to lands of greater oppor- tunity.28 (ii) Increases in infant m-ortal- ity (whose absolute levels always were high), supplemented sometimes by in- creases in adult mortality, elinminate ex- cess population in low-incomie areas when there is unemployment and great pov- erty (pp. 15-16, 19-20, 38-39, 54). (iii) Nuptiality in each of the classes compos- ing a population increases in response to improvement, and decreases in response to deterioration, in the economic condi- tion and prospects of its members. For most men wish to support their families according to a scale they have in view, and this scale usually is the one cus- tomary for the class of which one is a member. It was maintenance of the cus-

28 See pp. 13-14, 40-41, 101. Though unequipped with a marginal productivity theory, Cantillon reasoned that wage differences consequent upon differences in local supply-demand situations would set in motion equilibrating movements, particularly since men were animated by economic self-interest.

288 JOSEPH J. SPENGLER

tomary standard, not acquisition of a higher standard, that Cantillon stressed. "Most men desire nothing better than to marry if they are set in a position to keep their families in the same style as they are content to live themselves" (p. 43). For, with the exception of young- er sons of the nobility who tend to defer marriage until they come into a fortune and of those members of "the lower classes" who, "from pride" and the de- sire to live better than they could if they married, remain single (pp. 21-22, 43), most individuals prefer to set up a family provided that there is a good prospect of their supporting it as they wish and thereby preventing their children from descending into a lower class. Men who do not believe the prospect good enough will postpone marrying and may not marry at all. Those who believe the pros- pect sufficiently good will marry, at least after they have saved enough to establish a household (pp. 43-44). In sum, then, whatever improves this pros- pect will make for an increase in nup- tiality and population; what worsens it will make for a decrease in nuptiality and thus check population growth. In like manner, whatever makes for an in- crease in the scale of living will diminish nuptiality, production remaining the samne; and conversely. It should be noted that Cantillon, who has been called an anticipator of the modern French theory of "social capillarity,"29 had in mind, much as did the later formulators of this theory, not an economy so dynamic as the nineteenth-century British or Ger- man, but one that, being comparatively static, was characterized by redistribu- tions of social positions rather than by

29 See R. Gonnard, Histoire des doctrines de la population (Paris, 1923), p. 143; also my France Faces Depopulation (Durham, N.C., 1938), esp. pp. 157 ff., 205.

improvements in the emoluments at- taching to most positions.30

2. Cantillon based his explanation of the growth and distribution of popula- tion upon a cost-of-production theory of value, which is discussed in Section IV. First, labor, whose supply was highly correlated with population,3' had a cost of production.'2 The labor of a peasant or worker approximated in value to

30 See Essai, pp. 13, 43-47; also p. 38, where it is noted that in China religious principles obliged all to marry. A. Landry (La Rhvolution d6mographique [Paris, 1934], pp. 169-92) distinguishes Cantillon's law, according to which population is conditioned by subsistence and regulated by variation in nup- tiality, from Townsend's law, according to which population is determined by subsistence and regu- lated by mortality, and from the modern principle, according to which population is conditioned by sub- jective and objective factors and regulated princi- pally through birth limitation. At and before the time Cantillon wrote, apparently very little weight was attached to the role of variation in nuptiality as a voluntaristic means of regulating natural in- crease. C. E. Stangeland (Premcalthusian Doctrines of Population [New York, 1904], pp. 112, 164), men- tions only Sir Walter Raleigh and S. Dugard. Petty (Hull ed., p. 608) merely refers to the marriage- delaying effect of "Portions, Jointures, Settlements, &c." Halley (to whom Cantillon refers at p. 44, and whose life-table apparently is the basis of Cantillon's misinterpretation when he assigns [I, 7] but ten to twelve years to a man's [working?] life) observed (Philosophical Transactions of the Royal Society of London, XCII, No. 198 l1693], 654-56): "It is from the cautious difficulty most People make to adventure on the state of Mlarriage, from the prospect of the Trouble and Charge of providing for a Family," that population growth is "stinted." Variation in nuptiality, after having been given a place of importance in the system of thought of Malthus and some of his disciples, under- went a decline in significance as a check in late- nineteenth-century population theory, only to be treated as the major regulator of numbers by G. Cauderlier around the close of the century (see my France Faces Depopulation, pp. 143-44).

31 He put at 50 per cent of the population the number of persons who work for others; landowners and proprietors along with the sick comprise another 17 per cent (I, 16).

32 Differences in the wages received by various categories of labor he accounted for in terms of differences in their cost of production and, conse- quently, in their conditions of supply (I, 7-8).

CANTILLON 289

double the produce of the land required to maintain him, and that of an entre- preneur to treble his own support; for the earnings of individuals needed to be high enough to insure maintenance of the population (I, 11). The upkeep of an adult male, being determined largely by the custom of a place, varied greatly, ranging in Europe from 1.5 acres of medi- um goodness (if he ate meat rarely and drank little beer or wine) to 4-5 acres (if he ate meat daily and drank mod- erately of wine or beer); in China, where three crops of rice were raised yearly, a fraction of an acre sufficed.33 According- ly, the maintenance of the population called for a wage per adult worker ap- proximating in produce the yield of 3-10 acres in Europe and of less than an acre in China. But were yields per acre great- er (smaller), Cantillon implied, fewer morer) acres would be required per adult nmale Cand per family.34

Second, since labor and population had production costs, the amounts of them forthcoming depended upon the state of demand for them. The number of workers in any category "is naturally proportioned" to the demand obtaining for them in a country or a locality (I, 9). In like manner the inhabitants of a coun- try "are necessarily proportioned to their Means of Living" (p. 38). Since these means of living consisted pre- dominantly of the produ c of land, the

"See I, 11, 15, and p. 34. In these estimates Cantillon allowed only for the fooJ for horses for the plow and for the carriage of the produce a dis- tance of ten miles (p. 40).

34 Cantillon indicated that, because of variation in the quality of the soil, in the number of crops harvested per year, and in the skill of cultivation, yields per acre varied widely (pp. 37-39, 111). While he indicated that yields per acre are limited (pp. 37-38), he developed no law of diminishing returns, resembling, in this regard, Petty, who, however, implied the operation of increasing re- turns in England (Hull ed., pp. 34, 68).

demand for labor, Cantillon implied, was determined by the volume of such prod- uce available for the purchase and sup- port of workers and their dependents. Cantillon reached the conclusion, there- fore, that, since the owners of land di- rectly and indirectly govern the uses to which land is put, "the Increase and De- crease of the number of People in a State chiefly depend on the Taste, the Fash- ions, and the Modes of Living of the Proprietors of Land"; theirs was the power of the purse (I, 15).35 The "Prince," most important of the propri- etors, is described as "generally capable of determining the inspiration and tastes" of the other proprietors; and these are said to determine what occupa- tions the people should pursue (pp. 52- 53).

Cantillon's argument, the germ of which he may have gotten from Locke,36 made the demand for labor and hence the level of wages and/or the size of the population depend upon the consump-

35 Petty (Hull ed., p. 90) remarked that demand and price are affected by the "example of Superi- ors," and a similar opinion was expressed by Locke ("Some Considerations of the Consequences of Lowering the Interest, and Raising the Value of Money" [1691], in Works [London, 1801], V, 58-60, 72). Cantillon (I, 12-13; also II, 3-4) described the landed proprietors as the only naturally independent class in the state because, raw produce being so essential and (apparently) the support of labor being so largely reducible to terms of organic materials, the economic situation of the proprietors (who could exercise great control over the supply of organic materials) was more secure than that of workers, entrepreneurs, and possessors of nonlanded wealth, all of whom had to have produce for their mainte- nance. Cantillon's argument, in so far as it stressed the autonomy of the role of the large landowner, underestimated the importance of the peasant in the then social structure and the routine character of the principles according to which the lands of large owners were cultivated; it, of course, under- estimated the influence of the power of the purse of other income-receivers.

36 See John Locke, Of Civil Government (1690), Book I, par. 41; cf. Essai, pp. 25-26.

290 JOSEPH J. SPENGLER

tion and spending patterns of the rich landed proprietors.37 If they so spent their incomes and otherwise acted as to cause their lands to be used in the pro- duction of subsistence to which the in- habitants had access, numbers would speedily grow to the limit of the capacity of the land to support population at the prevailing scale of living. If, on the con- trary, the proprietors concentrated in towns and cities and so spent their mon- ey as to cause much of their land to be diverted to the support of superfluous horses and the serving of ornamental purposes, the production of subsistence for men would be diminished, since farm- ers are prompted by self-interest to produce what is in demand (I, 14).38 The diversionary influence of the proprietors was accentuated by the fact that their modes of consumption tended to be imitated and emulated by successful entrepreneurs and "all the lower ranks."39 Given any resulting dinminu- tion in the domestic supply of agricul- tural produce, the demand for labor would fall and with it (temporarily) the current wage level and (eventually) the size of the population, since the worker's customary scale of living did not readily adjust downward. In support of this thesis Cantillon suggested that, because of increased consumption per head, the population of England had declined as had that of other countries; and he in- dicated that, given a fixed quantity of land or a rising scale of living, popula-

37 Their incomes, supposedly in money, approxi- mated in value one-third of the agricultural produce of the land they owned (see Sec. IV below).

3 Urban growth increased the horse require- ment of the transport system, with each horse con- sumning the produce of 3-4 acres (pp. 97-98). Accord- ing to Petty (Hull ed., pp. 173, 175, 287-88), the support of a man required about the same amount of land as that of a horse.

39 See pp. 35-36, 41-42, 52, 56-58.

tion could not increase geometrically, men multiplying "like Mice in a barn" only when "they have unlimited Means of Subsistence."40

3. So long as an economy was closed, Cantillon reasoned, whether numbers grew or not turned on what domestic fancies the land was made to serve. If, however, an economy was open and linked with other economies by trade, it turned also on whether labor-embodying products were imported or a converse exchange obtained. Suppose, said Can- tillon, that France exchanges 16,667 muids of wine for its value in Brussels lace. The wine represents the output of about 6,000 acres in all, 4,000 acres of vineland and 2,000 acres of pasture and arable land for the support of the cart horses engaged in the production of the wine. The lace represents the flax output of 0.25 acre and the labor input of about 2,000 people, the maintenance of whose families requires the output of about 6,000 acres. The exchange in question has operated, therefore, to subtract about 6,000 acres of land and 2,000 fami- lies from France and add them to Bel-

40 I, 15. He added that (ibid.) in the colonies where land was freely to be had population grew ten times as fast as in a country like England. That numbers were less than formerly had been asserted by Continental contemporaries of Cantillon (e.g., by Vossius, Bayle, and Montesquieu [see my French Predecessors of Malthus, and D. V. Glass, "The Population Controversy in Eighteenth-century England, Part I: The Background," Population Studies, VI (1952), 83-91]), though for reasons somewhat different than those advanced by Can- tillon; but this opinion seems not to have had sup- porters in England until after 1750, when it was questioned whether numbers had increased since the Glorious Revolution (see Glass, op. cit., pp. 69- 71). Petty (Hull ed., pp. 462-64) and Davenant (Essay upon the Probable Alethods of Making a Peo- ple Gainers in the Balance of Trade [London, 1699], pp. 15-20), who cites Gregory King, supposed that England's population increased at a low but steady rate. Hume, Voltaire, and others later denied that numbers had decreased, but they made no refer- ence to Cantillon's argument as such.

CANTILLON 291

gium. In effect, Belgium has swapped labor for land and thereby gained at the expense of France much as Rome gained at the expense of other nations when it levied tribute upon them.41

Cantillon argued in general that "the exportation of all Manufactured ar- ticles is advantageous to the State, be- cause in this case the Foreigner pays and supports Workmen useful to the State"; and he pointed to "trading States" (e.g., Hamburg, Danzig, Holland, Ven- ice, etc.) which, though much more vul- nerable to adverse events than "great States" (e.g., France, Spain, England), were supporting or had supported "great numbers at the expense of Foreigners." While he believed that a country which exchanged raw produce for wrought goods had a lower population in con- sequence, he did not emphasize this point with respect to "great States" which had "no need to increase the num- ber of their inhabitants." But he did contend that pursuit of a policy of ex- porting only wrought goods and of re- taining raw products at home, especially if it were complemented by a strong and well-secured merchant marine, would make for "greater ease and abundance" of produce in great states, would bring about an influx of gold and silver, and would produce the advantages associated with abundance of money (at least until internal prices became so high that the value of imports exceeded that of ex- ports and the trade balance became negative) 42

Cantillon's doctrine, derivative of a

41 See III, 1; I, 15; also pp. 51, 132-34, on the difficulty of expanding foreign markets; also p. 48 on land-saving effect of coal consumption.

42 III, 1; pp. 28-34, also pp. 47-48, 75-76, 107-8. The Physiocrats also distinguished between small trading states and large land-rich states, saying that their policies applied only to the latter (see my studies cited in n. 3).

long-held thesis that foreigners paid the incomes of persons engaged in produc- tion for export, received its classic ex- pression in 1767 at the hands of James Steuart, who declared that a country gained in proportion as it exported "work" and imported "matter."43 Ques- nay and the Physiocrats, proponents of luxe de subsistence, rejected Cantillon's argument in support of what could be luxe de decoration. For, believing that France's net product and national in- come would thus be augmiented, the Physiocrats favored both a high per capita domestic consumption of agricul- tural produce and, at least so long as domestic agricultural output exceeded domestic consumption under competitive conditions, a sufficient exportation of farm produce.44 Cantillon would have agreed that a state might export temn- porary surpluses of farm produce, but he would have stipulated that they be exchanged not for manufactures, whose influx would depress domestic eniploy- ment and population growth, but for gold and silver, whose influx contributed (within limits) to a state's strength and advantage.45 Because Cantillon believed raw produce to be the principal popula- tion-limiting factor, because he was in- terested in the strengthening of the state

43 Works (London, 1805), Book II, chap. xxiv; Johnson, op. cit., chaps. xi and xv.

44 See A. Landry, "Les Id6es (de Quesnay sur la population," Revue d'histoire des doctrines 6co- nomiques et sociales, II (1909), 41-87; also my "The Physiocrats and Say's Law of Markets," op. cit., pp. 208 if. Cantillon did not distinguish between "productive" and "unproductive" labor.

45 See III, 1; II, 8; pp. 129-30. If too much of the silver got into circulation, prices would rise above a point where the terms of trade, together with volume, were very favorable, to a point where exports would decline and imports would increase (pp. 129-30). On military advantages arising from state's possession of gold and silver, the best form of "reserve Stock," see pp. 50-51, 104-5.

292 JOSEPH J. SPENGLER

instead of in the maximizing of per cap- ita output and income,46 and because he wanted to expand exports, he overlooked both the output-increasing effect of in- ternational specialization and the fact that, if labor were relatively plentiful, labor-emibodying products would most likely be exported.47

4. In Part I Cantillon looked upon the scale of living of the lower orders as set by custom and relatively fixed. At the same time he indicated that it had risen in the course of time. But he ad- vanced no dynamic theory to explain this rise. Presumably, on his principles, he could have accounted for it in two ways. (i) He could simply have assumed that for divers reasons the real incomes of the lower orders had risen to new and higher levels and remained there long enough to establish new customary scales.48 (ii) He could have supposed that an increase in the consumption level of the landed proprietors had been imitated by entrepreneurs and others who were receiving incomes temporarily in excess of their customary require- ments, with the result that their cus-

46 Here, despite his refusal (I, 15) to say whether a higher-income small population was to be pre- ferred to a lower-income large population, he de- clares for a strong state which derives its power from the magnitude of its usefully employed labor force and its consequent ability to exchange wrought goods for gold and silver (I, 16; III, 1). Yet whereas, reasoning similarly, he condemned the idleness of monks, he described the "Nobleman" as useful in military service and the magistracy and as always "a great ornament to the Country" (see I, 16).

47Cantillon was not thinking in terms of a foreign-trade multiplier, although he did conceive implicitly of a geographical multiplier (pp. 4-5, 8, 36-37), and, as Landry later demonstrated ("Une Theorie neglige'e," op. cit., pp. 750-57), his theory of the demand for labor contained a multiplier principle.

48This approach would have had to be recon- ciled with his assertion that war losses were made up rapidly (p. 47).

tomary standards had risen only to be imitated in turn by individuals situated still lower in the social hierarchy. But he did not employ these principles in Part I; in fact, unlike Petty, he seems to have been thinking in terms of a relatively static economy.

In Part II, in the course of his discus- sion of changes in the price structure, he dealt incidentally with the dynamics of living standards, recognizing (among other things) the principle of intercom- modity substitution by consumers (pp. 96-97). In this discussion he did not assign so important a role to the propri- etors, perhaps because, under the condi- tions he assumed, the real income of the proprietors had declined as a result of rising prices, while that of many others had risen. Increases in the quantity of hard money in circulation, he said, oper- ated to increase both subjective and ob- jective standards of living.49 "I conclude that an increase of money circulating in a State always causes there an increase of consumption and a higher standard of expense" (p. 100). Presumably not much time is required for an increment in in- come to generate new and higher cus- tomary standards of living in the various classes composing a population; "for nothing is easier or more agreeable than to increase the family expenses, nothing more difficult or disagreeable than to retrench them" (p. 94). Cantillon does not stress, as did J. S. Mill later,50 that only relatively large increments in in- come are likely to generate new custom- ary standards. Cantillon's argument im-

49 Cantillon's analysis is remindful of both Simiand's theory of economic change (see R. Marjolin, "Francois Simiand's Theory of Economic Progress," Review of Econo ic Studies, V [t938,1 159-71) and Keynes's thrilling account of the im- pact of price changes (op. cit., chap. xxx).

5 Principles of Political Economy (Ashley ed.), pp. 348, 371, 380-84.

CANTILLON 293

plies that an increase in real income con- sequent upon an increase in the amount of hard money in circulation would tend to diminish the population unless enough produce were imported from abroad.5" For, while production would rise in con- sequence of the rise in prices (pp. 91-92, 96-97, 104), it apparently would not rise enough to offset the increase in de- mand for the means of living. Further- more, the increase in income would tend, as would price rises, to be unevenly dis- tributed, with important segments of the population suffering decreases in real income as a result either of price rises or of unemployment (pp. 91-93, 100). Some of these adversely affected persons would tend to emigrate (pp. 91-93, 101- 2), while others, on Cantillon's prin- ciples, presumably would defer mar- riage. At all events, in the end the cus- tomary standards of living would gen- erally be higher. A "rarity" of money presumably, since it would occasion a fall in income but not in the subjective standard of living, would tend to occa- sion emigration and a decline in nup- tiality.52

Although Cantillon did not relate luxury and population movements close- ly, he did imply a general relationship. Inasmuch as only half a nation's wage- earners were engaged in agriculture, and as there was not always enough non- luxury employment to engage the other half, it often was necessary for a part-- presumably a small part (p. 28)-to sup-

51 See pp. 94 ff. The increase is the result of min- ing or of an export surplus. While he showed that in England the increase in meat production had dimin- ished corn production and increased the relative value of pastures and meadows, he did not trace the impact of the shift upon population. Cantillon did not recognize what V. G. Simkhovitch has called the "grass revolution" (Toward the Under- standing of Jesus [New York, 1937], pp. 150 ff.).

52 Cantillon does not say this, but his argument (pp. 103-4, 109-10) carries this implication.

ply "ornament and amusement" (pp. 50-52). Luxury, which tended to be- come installed when money was too abundant, could also be harmful. It dis- couraged population growth when it re- tarded the development of manufactures in a state or entailed the continuing ex- port of raw produce (pp. 42-43). Luxury affected an economy adversely also when it entailed an efflux of gold and silver; it had brought about the decline of Rome by occasioning a diminution of the rnon- ey in circulation (pp. 108-10).13

5. The spatial distribution of both a state's inhabitants and their economic activities, according to Cantillon, as- sumed a regular and orderly pattern which tended to be preserved by the net- work of market and price relationships that had gradually come into being as this pattern had evolved. This distribu- tion reflected, above all, the extent to which the ownership of agricultural land was concentrated in the hands of a few and the constraints which were imposed by the impossibility of transporting serv- ices and by the tendency of the carriage costs of transportable goods to increase with distance. In his discussion, Cantil- lon, having noted (though perhaps less than Petty) the importance of secondary and tertiary employmnents, made use implicitly of the concept of a geographi- cal multiplier, even to the extent of cal- culating it (1, 3, 5; pp. 35---36). Perhaps, had he concentrated upon locational questions instead of discussing them incidentally to his analysis of price be- havior, he might have anticipated mod- ern attempts to integrate locational and populational theory; for he emphasized the importance of transfer costs and ar- rangernents for reducing them (e.g., I, 4, 8).

The population was distributed among 53On Rome cf. Keynes, op. cit., II, 151 ff.

294 JOSEPH J. SPENGLER

villages, market towns, and cities, one of which served as the capital city. The villages were oriented to agriculture, having been brought into being by the fact that farmers and farm workers, if they are to avoid loss of time going to and from work, must live near the fields they till. The size of a village thus de- pended immediately upon the number of agriculturalists settled there and the number of artisans required to minister to the needs of these agriculturalists and ultimately upon the fertility of the soil and the kinds of crops raised, together with the extent to which the services of artisans were to be had at little time cost in near-by towns. The size of a village usually was augmented somewhat by the fact that they had one or several less wealthy proprietors, who brought with them domestic servants and provided additional demand for the services of artisans.

The villages were economically clus- tered about bourgs, each of which min- istered to the distributive requirements of a number of surrounding villages. A bourg was simply a somewhat larger vil- lage where markets were held once or twice a week. The function of the bourg was to permit merchants, at minimum transport and time costs, to collect for consumers situated in cities the products of the farmers from villages surrounding the bourgs, to distribute to these farm- ers and their dependents the merchan- dise which they sought from the city, and to carry on these exchanges at prices which were both satisfactory and sta- ble.54 Bourgs, though subject to the same growth determinants as were vil- lages, became somewhat larger inas- much as relatively more artisans and

54Only if a market was organized and supply and demand had become relatively stable were market prices relatively stable (pp. 17-18).

domestics located there and ministered to the needs of the landlords, agricul- turalists, merchants, and one another.

Cities, particularly those situated within the interior of a country, owed their origin and being most of all to wealthy landlords who realized enough from the net value of their one-third of the produce to enable them to live, not in villages or bourgs, but in large places where they could enjoy the "agreeable society" of people of their own condition. The purchasing power of these great proprietors attracted to the cities, be- sides their own retinues and domestics, "an infinity" of merchants and artisans who in effect ministered primarily to the wants of the landlords and their depend- ents and secondarily to the wants of others. So the advent of the landlords produced a geographical multiplier ef- fect (e.g., I, 5; pp. 35-36). The size of a city was further augmented if law courts were established there, since these increased the demand for domestics and artisans. Presumably, because cities constituted large markets for the output of workshops and manufactories, these tended to take hold there. These manu- factories tended to become very large when a city was situated along the sea- coast or on the banks of a large river and therefore had access (because of the re- sulting economy and convenience of its transport connections with the interior and exterior) to large domestic and foreign markets. The establishment of workshops and manufactories brought to a city not only entrepreneurs and operatives but also merchants, artisans, and domestics who could serve the wants of persons employed in manufacture. The capital city, though brought into being as were other cities, differed from them in that it was the place where the king, the government, the courts of last

CANTILLON 295

resort, and the largest landowners were situated and where were spent the rev- enue of the government, the incomes of the great landowners, and the moneys of the many (e.g., visiting landlords, stu- dents, etc.) who, drawn by the city's at- tractions, passed some time in the capi- tal.55

Agricultural produce moved after har- vest from the countryside to the cities in response principally to the prior move- ment, in the form of money, of propri- etary rents, taxes, and farmers' profits to the cities.56 Prices, accordingly, were much higher in cities than in the country- side, being highest in the capital city and lowest in agricultural surplus areas far removed from cities. Cantillon writes as though the prices of transportable prod- uce were determined in the capital city, with farmers and proprietors in any area getting these prices less allowances for the risk and the transport costs inciden- tal to the carriage of the produce from the area of provenience to the capital city. Eve n greater differences character- ized the prices for nontransportable and perishable products (garden produce, eggs, fuel, etc.) which had to be supplied from points near by the consumers. The cost of living was high, therefore, in the cities and low in the hinterland; and, because transport was so expensive, the

55 I, 2-6; p. 52. On transport costs see, e.g., I, 6; pp. 41, 87; and on trading cities (e.g., Hamburg), treated as a special class by the Physiocrats, pp. 75, 108, 129. Unlike Petty (Hull ed., pp. 462-65), Can- tillon did not attempt to fix the maximum size of the capital city. In Cantillon's day students of rural economy were aware of location problems, and a number of eighteenth-century economists (e.g., Melon, Galiani, Forbonnais) argued in favor of the diffusion of industry (see Sauvy, Essai, pp. 85-87 nn.).

56 One half the population lived in the country and one half in the cities, with somewhat more than half the agricultural produce moving into the city or away from the country (I, 12; II, 5).

net prices realized by agricultural pro- ducers were low except in the vicinity of the capital city and adjacent to rivers and the sea where cheap water transport was to be had.

The geographical price pattern being what it was, a greater dispersal of indus- try and population was indicated. In so far as practicable, manufacturing should be conducted in provinces far removed from the capital. Cloth, linen, and lace production should be carried on in the provinces, and the manufacture of metal tools near coal mines and forests. For such locations, by making largely un- necessary the carriage of foodstuffs and raw materials to the city, would save for better employment the labor of many horses and wagoners and thereby great- ly reduce transport costs. The popula- tion of the provinces would increase, and net price in local markets for agricul- tural produce would rise. He suggested, however, with respect to remote prov- inces, that capital would have to be pro- vided, markets for products would have to be developed, and ventures which could better be carried on close to the capital or near rivers and the sea would have to be avoided.57 Cantillon failed to show, perhaps because he was concerned with monetary questions, how compara- tive plenty of produce, in consequence of its effects upon the price structure and the distribution of the labor supply, might draw manufactures to an area. The same oversight marked his discus- sion of international trade.

[To be continued]

57The last two paragraphs are based upon II, 4-5. On shipbuilding see p. 133. Adam Smith wrote in a somewhat similar vein, but he added that abundance of provision makes its price low and so attracts manufacturing workers (see Wealth of Nations, Book III, chap. iii). There is no reference to Can- tillon.