Richard Cantillon: First of the Moderns. I Author(s): Joseph J. Spengler Source: The Journal of Political Economy, Vol.

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THE JOURNAL

OF

POLITICAL
VolumeLXII RICHARD CANTILLON:

ECONOMY
Number4
I FIRST OF TIHE MODERNS.

AUGUST1954

JOSEPH J. SPENGLER Duke University It is the fate of anonymous works ... to have their ideas pilfered by contemporaries and to be forgottenby later generations.-CIIARLEs RIST. HE

I Sauvy's new editionis the principalrepository The of thisinformation. HenryHiggs edition(hereafter cited as "Higgs, Essai") includes both the 1 This edition (hereafter cited as "Sauvy, French original and Higgs's English version,toEssai") includes studies and commentaries by gether with a summaryof his own research and Anita Page, A. Fanfani,Louis Salleron,the editor, W. S. Jevons'important paper, "Richard Cantillon and the authorof the presentessay, notes by Louis and the Nationalityof Political Economy" (which Salleron,and a list of the worksin which there is firstappeared in the Contemporary Review,Janureference Cantillon's Essai; it was published in ary, 1881). On Cantillon'slifeand his relations to with Paris, in 1952, under the auspices of the Institut the Marquis de Mirabeau see also Higgs, "Richard National d'Etudes D6mographiques. I have in- Cantillon," Economic Journal, I (1891), 262-91. cluded in the present essay portions of my com- Higgs's other studies of Cantillon include The mentary, French,in the Sauvy edition. For the Physiocrats in (London, 1897) and "Cantillon's Place reader's convenienceI shall referto the Essai by in Economics" (Quarterly Journalof Economics,VI book and chapter, usingforthispurposeRoman and [1892],436-56). An excellentaccount of Cantillon's Arabic numerals;occasional page references to lifeand the fortunes his Essai is given by F. A. are of the Sauvy edition; the English is that of Cantillon Hayek in his introduction the German translato as rendered Higgs (see n. 3 below). by tion (Jena, 1931); this introductionappears in 2 Theories Surplus Value, trans. G. A. Bonner in Frenchtranslation Revuedes scienceskeonomiques of in and Emile Burns (New York, 1952), p. 15. (Liege), Vol. X (1936), and in Italian translation

Sauvy's splendid new edition of Richard Cantillon's Essai sur la nature du commerceen 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 multipleoriginof political enonomy

appearance Professor of Alfred is ignored, Cantillon has a very good

claim to having been the principal forerunnerof both the classical and the neoclassical schools. I Considerable information has been assembled respectingthe publication of in the Essai and the fluctuations public esteem undergoneby its various parts.'

281

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JOSEPH J. SPENGLER

Written between 1730 and 1734, the until Essai was not publishedin entirety 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 UniversalDictionaryof Trade and Commerce (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, reportedlyby Cantillon himself, sixteenyears aftersupposedlyremaining in thehands ofthe Marquis ofMirabeau, owner at the was restoredto its rightful latter's request; and from this manuthe script, presumably, Essai was printed in London in 1755.5Two reprintswere

social (1932). J. Hone, in his "Richard La Reforma Cantillon, Economist-Biographical Note" (EconomicJournal,LIV [1944],96-100), supplies Cantillon's genealogy and the supposed date of his Quotationabout Cantillon's birth.In "A Forgotten Life" (Economic Journal, X III [1933], 534-37) about Luigi Einaudi recallsDu Hautchamp's report acquiringfirst-class Cantillon,one of the forty-six proposed to write a through JohnLaw's "System" in 1719-20, of the statisticalsupplement, fortunes who made 20,000,000 livres on his "Mississippi" book based on the manuscript; whereupon prethe owner,preferring manuspeculationsin this interval. Cantillon's contribu- sumably the rightful tions to the physiocraticsystem are treated by scriptto be printedas it stood, called it back and plhysiocratique had it printed. Mirabeau actually had done an GeorgesWeulerssein Le 1louvement supplemented Predeces- abridgmentof the Essai manuscript, en France (Paris, 1910); see also myFrench 1)yadditionsofhis own,and a closetcopy underthe sors ofMalthus(Durham, N.C., 1942) and my"The sur and Say's Law of Markets," Journalof head of MA1moire la population;but thesepapers Physiocrats were not printed.Instead, in 1756,he composedhis 317 ff. LIII (1945), 193 ff., PoliticalEconomy, famousL'Ami des homes (Avignon,1757), in which 4Postlethwayt, who usually acknowledgedhis someof Cantillon'sideas (see Higgs, he incorporated sources, did not referto Cantillon's manuscript, "Richard Cantillon," op. cit., pp. 263-70; Georges perhaps because he was under obligationnot to rede gconoiniques Franfois Weulersse,Les Manutscrits veal the source. From Postlethwayt'sDictionary Marquis de Mlirabeauaux Archives Quesnay et doJ perhapsJosephHarris drew the Cantillon material rationales [Paris, 1910], pp. 2-3, 19-20; Sauvy, included in his Essay upon Mioney and Coins lxviii-lxxiii). (London, 1757). On Harris and Postlethwaytsee Essai, pp. 6 A much-mutilated based upon the abridgment, E. A. J. Johnson,Predecessorsof Adam Smith LonFrench edition,by Philip Cantillon,one-time (New York, 1937), esp. chap. x and pp. 405 ff. or and a first secondcousinofRichard don merchant I While the identity this rightful of owneris not Cantillon, is hardly definable as an edition (see known, he may, as Hayek suggests, have been Essai, pp. 376-78). Francis Bulkeley, husband of Cantillon's widow; Higgs, 7Higgs describes his translation,much of it forthe latterdied in 1749 or 1750, while Bulkeley lived until January14, 1756. Mirabeau, who pro- based upon Postlethwayt's reproductionsof the of as was held back frompublishingthe manu- English original, "near to a reconstruction the fessedly and the lack English original" (ibid., p. 384). script by its stylisticimperfections

issued in 1756,one in France and one as part ofa collectionput out in Amsterdam by Eleazar de Mauvillon, fatherof the German Physiocrat, Jakob Mauvillon; but neither appears to have sold well. In 1767 an Italian translation was broughtout. Presumably because of the lapse, even beforethe close of the eighteenth century,of interestin Cantillon's work, no additional edition appeared until 1892, when Harvard University Press brought out an essentially facsimile reproductionof the French original.6This issue apparentlywas prompted by W. S. Jevons' discovery of the Essai's greatmeritto theworldof econoHiggs's continuamists and by 1-lenry tion of the work initiatedby Jevons. In 1931 appeared two translations of the Essai, one German,edited with an introduction by F. A. 1-ayek, and one English,7accompanied by much supplementary material,most of it by Higgs. The influenceof the Essai upon the developmentof economicthoughtseems

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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 of withoutacknowledgment, his materials and ideas or wereinfluenced them. by Among those appreciably influenced were Postlethwayt, Harris, Mirabeau (especially before he became a Physiocrat), Quesnay,8 Gournay, Graumann, Accarias de Serionne, James Steuart, Adam Smith, Condillac, J. G. Busch, Pluquet, GermaineGarnier (in his earlier writings),and Peuchet. Among those somewhatinfluenced wereTurgot,Filangieri, Beccaria, Roederer, and, at least indirectly,Genovesi, Paley, and Malthus. Dubuat-Nancay, De Meilhan, Moheau, Forbonnais, Necker, ButelDumont (in part a critic),and Say may have been influenced by Cantillon's ideas. Among those who at least knew Cantillon's work are numberedDupont de Nemours, Ferrara, Freron, Grimm, Mably, Morellet, Savary, Graslin,J. F. von Pfeiffer, and G.-A. Will. Arthur to Young referred Cantillon's work but was reportedly influenced it, havnot by ing gottenelsewherehis idea that population growthdepends upon the state of employmentand the demand for labor. Hume must have known of Cantillon's but he was little if at all inmanuscript, fluenced by it, missing the import of Cantillon'sbrilliant analysis (whichcompares favorably with Keynes's) of the to responseof thepricestructure changes in the quantity of money. Except for to occasional references his work before 1860 (e.g., by Ganilh, Rae, and Daire)

and occasional shortappreciationsof his work (e.g., those of G. Kautz, De Lavergne, Von Sivers, and Roscher) in 1860-80, Cantillon's work received no critical attentionin the nineteenthcentury until after Jevons' fine paper (1881) had recalled its merits to the attentionof 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, His ancestorshad accordingto others.10 come to England with William the Condescendqueror,and at least someoftheir ants had settled in Ireland, among them Richard's ancestor, Roger Cantillon of Ballyheigue,in countyKerry,who married a Stuart, Elizabeth, in 1556.11 Richard, the economist,was the son of Philip Cantillon of Ballyheigue and the

9The 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 (Milan, 1936), chap. iv; al Mercantilismo liberismo A. W. Marget, The Theoryof Prices (New York, 1938-42), I, 307-10, II, 24, 29, 125, 130, 308-10; Ren6 Maunier, "Theories sur la formationdes villes," Revue d'economiepolitique,XXIV (1910), 6394-9; A. Landry, "Une Th6orie n6gligee: De influence de la directionde la demande sur la du productivity travail,les salaireset la population," Revue d'economiepolitique,XXIV (1910), 314-23, of 326-74; Jacob Viner,Studiesin theTheory InternationalTrade (New York, 1937), pp. 74, 78 ff.;my of French Predecessors 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; fromRaleighto of JamesBonar, Theories Population foung (London, 1931), p. 234. The Essai referred (ed.), (Euvresde Turgot(Paris, 1844), 8 While some of the Physiocrats' views (e.g., to in E. Daire I, 344-45 n., is not Cantillon's. on the roleof land, rent,circularflow, money)were 10See Hone, op. cit., p. 97, and Higgs, Essai, p. influenced Cantillon,other of theirviews (e.g., by inon luxury, consumption, production, trade) differed 366. ProfessorPage considers Hone's finding contestable(Sauvy, Essai, p. xxiv). from his. Upon Mirabeau's becoming associated 11 Hone gives the date of this marriageas 1556 with Quesnay, his esteem for Cantillon's ideas (op. cit.,p. 99) and Higgs (Essai, p. 365) as 1536. declinedgreatly(see my studies cited in n. 3).

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nephew of the chevalierRichard Cantil- his stay includinga few days in prison; ion, banker to the Stuart Pretender in then he moved to Utrecht and Brussels Paris, whitheryoung Richard went in and, in 1734, to London. His fortune 1716.12 Most of the Cantillons were (much of it made possible by the failure Catholic as well as Jacobite, though re- ofLaw's scheme) at the timeofhis death ligion sat lightlyon some, among them was extensive,varied, and dispersed; it Richard, the economist."3The French included houses and holdingsin a numCantillons (become extinct in 1940), ber of countriesand places.14 The Essai, embodyingas it does Can1I-onebelieves, are descended from the economist's brother, James, probably tillon's reactions to views of contemupon his and throughhis son Thomas. Richard, the porariesand his reflections economist,was murderedin London on otherexperiencesin the world of affairs, the nightof May 13, 1734, by his former reveals somethingof his mind and its cook, and his body was burned to ashes operations. A man of "profounderudialong with many of his literary docu- tion" (reports Mirabeau) who usually ments, the house probably having been "read forthreehoursor so in bed," Canmonconcerning tillonwas well informed set on fireto hide the murder. While Cantillon was engaged prin- etary history and economic literature, cipally in banking, he also appears to thoughnot so well as Adam Smith. Canin have traded in wine, silk, and copper. tillonrefers, theEssai, to Cicero,Livy, Apparentlyhe began his banking opera- the two Plinys, Petty, Davenant, tions in France ratherthan in England, Locke, Halley, King, Newton, Vauban, perhaps because his uncle, the chevalier, Boizard, casuist writers on usury, the was established in Paris. Richard is re- Book of Genesis, and the author (probaported as having been engaged in bank- bly Boisguillebertor Boulainvilliers) of ing in Paris duringmost of 1716-20, in an Etat de la France. He must have been thelatterpart ofwhichperiodhe profited familiar with the works of Dupuy, exchange, greatly at the expense of John Law's Savary, and otherson foreign "System." He quit Paris in 1720 and and he was familiarwith literaturerewas away formost of eightyears, travel- porting travelers' observations. Of the ing extensivelyon the Continentand in authors he specificallymentions,Locke England. He lived in Paris in 1729--32, and Petty seem to have stimulatedhim 12 Upon his death in 1717 the chevalier was found most, thoughhe criticizedvarious ideas himselfa of each. Cantillon must also have been to be insolvent.Richard, the economist, claims of the paid the unrequited principalcreditor, by familiarwith and even influenced the othercreditors. 13 Mirabeau, in L'Ami des homes, character- writingsof authors whom he does not ized the author of the Essai as a Protestant,pre- identify. He does not mentionLaw, with sumably, suggests Higgs, because Cantillon (in whom he agreed on a minor point and Essai, I, 16), like Petty, had describedholy days and the activitiesof monksas wasteful,Petty (see against whose theoriesmuch of Cantilof C. 11. Hull [ed.],EconomicWritings Sir IV. Petty that the [Cambridge, 18991, 216, 218) estimating pp. Protestants worked about one-tenth more days per year than Catholics in Ireland (see Higgs, "Richard Cantillon,"op. cit.,p. 273; and Mirabeau's defenseof holidays,cited in Sauvy, Essai, pp. 5253 nn.). Cantillon (ibid., p. 103) attributed the to declinein Frenchclothmanufacture the drivingout oftheHuguenots.
14 This paragraph and the preceding one are based on Hayek, Higgs,Hone, and Page. Cantillon's is by seemingpassion foranonymity symbolized the word "inconnu," which Du Hautchamp inserted after Cantillon's name in a column headed "Remarques" intended to provide supplementary respectingthe "Mississippiens" (see information Einaudi, op. cit., pp. 535-36).

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Ion's treatmentof monetarymatters is directed.His descriptionof land as "the Source or Matter from whence all Wealth is produced" and of man's labor as "the Form which produces it" is renmindful Aristotle (I, 1, 10).1' Certain of of his views resembleviews expressedby Boisguillebert.16 Cantillon's stress upon the homeostaticand self-adjusting character of the economyand upon the role in of self-interest bringingadjustment about may reflect the influence Manof deville, North, and others,17 just as his account of the originsof propertymay reflectthe influenceof 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 Treatiseon Political Economy (e.g., see 4th ed. [Philadelphia,1841], Book I, chap. i), could have been suggestedby French legal or other sources,Higgs believes (see "Richard Cantillon," op. cit.,pp. 262-63).

Explicit theory and empiricism are fruitfully combined in the Essai. Though, as Marx implied,"9Cantillon remained under the influence of his his feudal, land-economysurroundings, will be prethe outlinesof which theory, sented, usually is potentially generalizable even when it was not actually is generalized.His empiricism manifested with which the Essai in the information and in Mirabeau's reis shot through20 methods: port of his field-work
toldme thathe foundhim One ofhis friends gown one day at home in Paris in his dressing withLivy on his desk. "I am going,"he said, "to make a littletrip.There has alwaysbeen a blunderas to thevalue of the coinswithwhich the cityfrom Gauls. their theRomansransomed One of these coins is in the collectionof the its GrandDuke and I am goingto verify weight and alloy." At thismomentthe horsesarrived to and he took leave of my friend get into the coach. In these voyages he made certain of to got everything, out ofhis carriage questiona judged the quality of the labourerin the field, soil, tasted it, drew up his notes, and an accountantwhomhe always took with him put themin orderwhentheystoppedforthenight. perishedwith A mass of preciousmanuscripts

16 See Fanfani (op. cit., pp. 75-89), who treats also (ibid., chap. ii) of Cantillon's indebtednessto Locke and Petty. Cantillon's definition wealth of as "la nouritture, commodities les agr6mens les & de la vie" resemblesBoisguillebert's;but the latter stressed morethan did Cantillonthe importance far of mass consumption (see Hazel Van Dyke Roberts, him .... 1

Boisg-lilbert

Essai, p. 104 n.).

18 Possession, Cantillon believed, commonly originatedin violence, with ownershipsooner or 17 E.g., cf. Cantillon'scomment (I, 9) on the usea few (I, 2, 11). lessnessof charityschoolswith the similarcomment later passing into the hands of PresumablyCantillon foundto his likingHIobbes's of Mandeville in The Fable of the Bees (see F. B. behavior as self-regarding Kaye ed. [Oxford, 1924],I, 299-300) or the place of descriptionof human Part I, (e.g., see the latter's Leviathan [16151], self-interest Cantillon's system with that in in chaps. xi-xv). Mandeville's system.Petty observed that men are 19Capital, Kerr ed., III, 910. more likely to put fortheffort when it is to their advantage to do so (cf.Hull ed., e.g., pp. 201-2), but 20 This information is but a fraction of that he did not apparently consider this disposition assembled in the lost statisticalsupplementto the sufficient organizemen into an adequately functo Essai which apparentlyincluded,along with other tioning economy.In the Preface (now attributedto matter, "a rudimentary study of workmen's RogerNorth) to Sir Dudley North'sDiscoursesupon countriesof Europe which budgets in the different Trade (London, 1691) it is said that "no Laws can comparisonwith would have affordedinteresting set Prizes in Trade, the Rates of which,must and Le Play's great work, Les OuvriersEuropeens" will make themselves" and that such laws are (see Higgs, Essai, p. 385). Though Mirabeau reto "l)rej~lldicial" trade. Mandeville (op. cit.) wrote ported the supplementto have been destroyed(see to Numbers in that the required "Proportion as Sauvy, Essai, p. lxxi), scholars still hope that a everyTrade findsit self, and is never better kept copy may be foundhiddenaway in some archives. with it." than whenno body meddles or interferes 21 See Sauvy, Essai (where Mirabeau's remarks, Mandeville may have been influencedby North put downabout 1750 and now in Arch.Nat. M. 780, (see Kaye ed., under "North," in index to Kaye's are cited in extenso), p. lxx; the translation is commentary).

[New York, 19351, pp. 285 ff.; Sauvy,

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JOSEPH J. SPENGLER

That in Cantillon's mind qualities essential to both speculatorand economist were combined in an unusual degree is testified to by Higgs as well as by Mirabeau, who remarked also on his cosmopolitantemper,a temperprobably both by the need of the specunourished lator to be rootless, impersonal, and flexibleand by the need of one required to live in diversreligiousspheresto avoid heavy psychological commitment to any. Hliggswrote:

Essai, may be illustrativelysuggested here, with more detailed evidence reserved until later. For example, Cantillon apparentlyconceivedof the elements composing the European economy as an constituting organized system under the empire of mechanisms which operated to achieve a kind of equilibrium. was accomplishedprinThis equilibrium the cipallythrough activitiesofan entreclass whosemembersassumed preneurial in inherent the riskand the uncertainty the prevailing economic society and, shows The lengthyEnglish correspondence Cantillon to have been a person of extreme guided by the behavior of buyers and ability and very great energy.... The impres- sellers and by the movementsof prices, sionlefton themindby a perusalof Cantillon's continuallybrought particular supplies was possessedofgreat is letters that the writer and particular demands into balance. clearnessand grasp, quick to penetrateamable at com- Cantillonthuslooked upon theEuropean biguityor weaknessof argument, bination and calculation,and so thorougha economic society as a kind of network thathisspecula- of reciprocity, exchanges of master theforeign given hierarchical form previsionamounting by prevailing institutionsand kept in tions exhibita scientific almostto certainty.22 adjustment by the play of self-interest, Mirabeau testified: into which individuals and groups were Again, of course thefamous bound by "need and necessity."24 the He foresaw complete system of Mr. Law, and, compelledby cir- the term "nature" in the title of the cumstancesto take part in it, he quitted the Essai apparentlyreferred the system to leaving revolution theatreof this astonishing groupstogether men and withordersin advance as to oflinksbinding his correspondent stages of the cycle which this in an economicsociety,while the terms the different "natural" and "naturally," used some would run.23 catastrophe the Cantillon's gifts as a theorist, gifts thirtytimes by Cantillon, implied or cause-effect (as reinforced Higgs observes) by a cos- existence of functional mopolitan experience which sharpened relationshipswhich, though sometimes the his capacity to distinguish persisting hidden by extraneous circumstances, persistent,and comaccidental and were fundamental, and the general fromthe com- parativelyimmutable,economicsystems the particular,and giftsfavorably mented upon by many students of the being what they then were. Presumably because Cantillon considered these reHiggs's (cf. Essai, p. 382). While Cantillon con- lationships relatively immune to interto sideredapproximations realityuseful,he did not and, ventionism and because he was interthem as more than approximations; represent while he considered"Statistics . . . leftto imagina- ested almost entirelyin describingand he tion" especially"subject to error," believedthere analyzing the economic system and the was no branch of knowledge"more demonstrable" detailed facts" (see behavior of the individuals and instituthan statistics "based upon Sauvy, Essai, pp. 74-75). but it, tions constituting he frequently, 22 See "Richard Cantillon,"op. cit.,pp. 285, 289. ethical not always, eschewed making sec. 3.
Cf. Rist, op. cit., chap. i, 23 See Sauvy, Essai, p. lxix; Higgs,Essai, p. 381.
24

I,

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

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evaluationsofeconomicoutcomes."Cela distributive theory; in Sections V-VI n'est pas de mon sujet," he remarked his monetary, banking, price, and rewithrespectto matterssuch as the sanc- lated theoriesare discussed. In the closis tionability monopolistic of pricingor the ing section some attentio-,n given to of preferability a smaller higher-income the influence certainof his views. of to a larger lower-incomepopulation.25 Cantillon's views on population and His theoreticalacumen was manifested related matters may be grouped under by also in his use of conceptsof both closed fiveheads: (1) the mechanisms which and open states (i.e., economies) and in numbersare adjusted in time and space; his employment of relatively simple (2) the demand for labor and populatrade,population capacmodels occasionallyinvolvingwhat later tion; (3) foreign came to be known as conjectural his- ity, and population growth; (4) the tory.26 Finally, his theoretical skill in genesis of living standards; and (5) the of treating monetaryand relatedquestions, distribution population in space. 1. The mechanisms through whose togetherwith his handling of empirical information, probably contributed ap- operation population becomes adjusted preciably to the formulationof what to the means available forits supportare later became the theory of liberalistic- three. (i) When the demand for labor declines in a locality,internalemigration capitalisticeconomics.27 tends to remove labor and population III from that locality; and, when the deof Having treated of the fortunes the mand declines in a country generally, Essai and its author,we turnto its con- externalmigrationremoves some of the tents. In this sectionwe reviewhis opin- population to lands of greater oppor(ii) ions respectingpopulation and related tunity.28 Increases in infantm-ortalquestions, since the materials fallingin ity (whose absolute levels always were this categoryillustratethe institutional high), supplemented sometimes by inexelinminate backgroundand premises Cantillon had creases in adult mortality, areas when in mindwhen discussingnondemograph- cess populationin low-incomie and great povic questions-premises, incidentally, there is unemployment which sometimespreventedhis general- erty (pp. 15-16, 19-20, 38-39, 54). (iii) izing and universalizing much as pos- Nuptialityin each of the classes composas sible the principleshe set down. In the ing a population increasesin responseto and decreases in response next section we treat of his value and improvement, in to deterioration, the economic condiI, 13, 15; II, 5; III, 5. Cantillon,aftercharacand prospects of its members. For terizing Petty's "research" into the "par" between tion land and labor as "fanciful and remotefrom natural most men wish to supporttheirfamilies laws, because he has attached himself not to causes according to a scale they have in view, and principlesbut only to effects," extended this criticismto Locke, Charles Davenant, and other and this scale usually is the one cusEnglishauthors(I, 11). tomary for the class of which one is a 26J, 12, 14-15, 17; IIT, 3; p. 85. On the use of member.It was maintenanceof the cus25

conjecturalhistoricalmodels in eighteenth-century 28 See pp. 13-14,40-41, 101. Though unequipped Europe see F. J. Teggart, Theoryof History(New with a marginal productivitytheory, Cantillon Haven, 1925), passim. consequent upon reasoned that wage differences 27 On his contribution situationswould in to liberalistic-capitalistic differences local supply-demand particularly movements, economics Fanfani,op. cit.,esp. pp. 121-26, and set in motionequilibrating see Sauvy, Essai, pp. xxi ff. since men were animated by economicself-interest.

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tomary standard, not acquisition of a improvements in the emoluments athigherstandard,that Cantillon stressed. tachingto most positions.30 2. Cantillon based his explanation of "Most men desire nothing better than to marryif they are set in a position to the growth and distributionof populatheoryof keep theirfamiliesin the same style as tion upon a cost-of-production they are content to live themselves" value, which is discussed in Section IV. (p. 43). For,withtheexceptionofyoung- First, labor, whose supply was highly er sons of the nobilitywho tend to defer correlatedwith population,3'had a cost The labor of a peasant marriageuntil they come into a fortune of production.'2 and of those members of "the lower or worker approximated in value to classes" who, "frompride" and the de30See Essai, pp. 13, 43-47; also p. 38, whereit is sire to live betterthan theycould if they noted that in China religiousprinciplesobliged all d6mographique married,remain single (pp. 21-22, 43), to marry.A. Landry (La Rhvolution Cantillon's [Paris, 1934], pp. 169-92) distinguishes to mostindividualsprefer set up a family law, according to which population is conditioned providedthat thereis a good prospectof by subsistenceand regulatedby variationin nuptheir supporting it as they wish and tiality,fromTownsend's law, accordingto which by is determined subsistenceand regutherebypreventingtheir childrenfrom population and fromthe modernprinciple, lated by mortality, descendinginto a lower class. Men who according whichpopulationis conditioned subby to do not believe the prospectgood enough jective and objective factorsand regulatedprincithroughbirth limitation.At and beforethe will postpone marrying and may not pallyCantillonwrote,apparentlyvery littleweight time marryat all. Those who believe thepros- was attached to the role of variationin nuptiality means of regulatingnatural ingood will marry, at as a voluntaristic pect sufficiently of Doctrines Stangeland least after they have saved enough to crease.C. E.[New York, (Premcalthusian 1904], pp. 112, 164), menPopulation establish a household (pp. 43-44). In tionsonlySir WalterRaleigh and S. Dugard. Petty sum, then,whateverimprovesthis pros- (Hull ed., p. 608) merelyrefersto the marriageSettlements, of delayingeffect "Portions,Jointures, pect will make for an increase in nup- &c." Halley (to whom Cantillon refersat p. 44, tiality and population; what worsens it and whose life-tableapparently is the basis of will make for a decrease in nuptiality Cantillon's misinterpretationwhen he assigns [I, 7] but ten to twelveyears to a man's [working?] and thus check population growth. In life) observed (Philosophical Transactions of the like manner,whatevermakes foran in- Royal Society of London, XCII, No. 198 l1693], most crease in the scale of livingwill diminish 654-56): "It is fromthe cautious difficulty make to adventureon the state of Mlarriage, nuptiality, production remaining the People prospect of the Trouble and Charge of fromthe It and samne; conversely. shouldbe noted providingfora Family," that populationgrowthis that Cantillon, who has been called an "stinted." Variation in nuptiality,after having in been given a place of importance the systemof anticipatorof the modernFrench theory thoughtofMalthus and someofhis disciples, underof "social capillarity,"29 had in mind, went a decline in significance a check in lateas population theory,only to be of much as did the later formulators this nineteenth-century treated as the major regulatorof numbersby G. theory,not an economy so dynamic as Cauderlieraround the close of the century(see my British or Ger- FranceFaces Depopulation, 143-44). the nineteenth-century pp. man, but one that, being comparatively 31 He put at 50 per cent of the population the static, was characterized by redistribu- numberof personswho workforothers;landowners another alongwiththe sickcomprise tions of social positions rather than by and proprietors 17 per cent (I, 16).
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. 205. 157 ff., 32 Differences in the wages receivedby various categoriesof labor he accounted for in terms of in differences their cost of productionand, conseof quently,in theirconditions supply (I, 7-8).

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double the produce of the land required to maintain him, and that of an entrepreneur to treble his own support; for the earningsof individualsneeded to be highenoughto insuremaintenanceofthe population (I, 11). The upkeep of an adult male, being determined largely by the customof a place, varied greatly, in ranging Europe from1.5 acres ofmedium goodness (if he ate meat rarelyand drank little beer or wine) to 4-5 acres (if he ate meat daily and drank moderatelyof wine or beer); in China, where threecrops of rice were raised yearly,a Accordingfraction an acre sufficed.33 of ly, the maintenance of the population called for a wage per adult workerapin proximating produce the yield of 3-10 acres in Europe and of less than an acre in China. But wereyieldsper acre greater (smaller), Cantillon implied, fewer morer)acres would be requiredper adult per nmale Cand family.34 Second, since labor and population had production costs, the amounts of them forthcoming depended upon the state ofdemandforthem.The numberof workers in any category "is naturally proportioned"to the demand obtaining or forthemin a country a locality (I, 9). In likemannerthe inhabitantsofa country "are necessarily proportioned to their Means of Living" (p. 38). Since these means of living consisted predominantlyof the produ c of land, the

demand forlabor, Cantillonimplied,was determinedby the volume of such produce available forthe purchase and support of workers and their dependents. Cantillon reached the conclusion,therefore,that, since the owners of land digovern the uses to rectlyand indirectly whichland is put, "the Increase and Decrease of the numberof People in a State chieflydepend on the Taste, the Fashions, and the Modes of Living of the Proprietors of Land"; theirs was the power of the purse (I, 15).35 The "Prince," most importantof the proprietors,is describedas "generally capable of determining the inspiration and tastes" of the other proprietors; and these are said to determine what occupations the people should pursue (pp. 5253). Cantillon's argument, the germ of whichhe may have gottenfromLocke,36 made the demand for labor and hence the level of wages and/or the size of the population depend upon the consumpthat demand 35 Petty (Hull ed., p. 90) remarked by and price are affected the "example of Superiors," and a similaropinionwas expressedby 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) describedthe independent as landed proprietors the onlynaturally class in the state because, raw produce being so essentialand (apparently)the supportoflabor being so largelyreducibleto termsof organicmaterials, (who could the economicsituationofthe proprietors exercisegreat control over the supply of organic materials) was more secure than that of workers, and entrepreneurs, possessorsof nonlandedwealth, all of whom had to have produce fortheirmaintein nance. Cantillon'sargument, so far as it stressed the autonomyof the role of the large landowner, the importanceof the peasant in underestimated and the routinecharacter the then social structure of the principlesaccording to which the lands of large ownerswere cultivated; it, of course,underof estimatedthe influence the powerof the purse of other income-receivers.

"See I, 11, 15, and p. 34. In these estimates Cantillon allowed only for the fooJ for horses for the plow and forthe carriageof the produce a distance of ten miles (p. 40). 34Cantillonindicated that, because of variation in the quality of the soil, in the numberof crops harvestedper year, and in the skill of cultivation, yields per acre varied widely (pp. 37-39, 111). While he indicatedthat yieldsper acre are limited (pp. 37-38), he developed no law of diminishing in returns,resembling, this regard, Petty, who, 36 (1690), See John Locke, Of Civil Government however,implied the operation of increasingreBook I, par. 41; cf. Essai, pp. 25-26. turnsin England (Hull ed., pp. 34, 68).

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tion and spending patterns of the rich tion could not increase geometrically, landed proprietors.37 they so spent men multiplying If "like Mice in a barn" theirincomes and otherwiseacted as to only when "they have unlimitedMeans cause theirlands to be used in the pro- of Subsistence."40 duction of subsistence to which the in3. So long as an economywas closed, habitants had access, numbers would Cantillon reasoned, whether numbers speedilygrowto the limitof the capacity grew or not turned on what domestic of the land to supportpopulation at the fancies the land was made to serve. If, prevailingscale of living.If, on the con- however, an economy was open and trary, the proprietorsconcentrated in linkedwith othereconomiesby trade, it townsand cities and so spent theirmon- turnedalso on whetherlabor-embodying ey as to cause much of theirland to be products were imported or a converse diverted to the support of superfluous exchange obtained. Suppose, said Canhorses and the serving of ornamental tillon, that France exchanges 16,667 purposes, the productionof subsistence muids of wine for its value in Brussels formenwould be diminished, since farm- lace. The wine representsthe output of ers are prompted by self-interestto about 6,000 acres in all, 4,000 acres of producewhat is in demand (I, 14).38 The vineland and 2,000 acres of pasture and influence the proprietors arable land for the support of the cart diversionary of was accentuated by the fact that their horses engaged in the productionof the modes of consumption tended to be wine. The lace representsthe flaxoutput imitated and emulated by successful of 0.25 acre and the labor inputof about entrepreneurs and "all the lower 2,000 people, the maintenanceof whose ranks."39 Given any resulting dinminu- families requires the output of about tion in the domestic supply of agricul- 6,000 acres. The exchange in question tural produce, the demand for labor has operated, therefore, to subtract would fall and with it (temporarily)the about 6,000 acres ofland and 2,000 famicurrentwage level and (eventually) the lies fromFrance and add them to Belsize of the population,since the worker's 40 I, 15. He added that (ibid.) in the colonies customaryscale of livingdid not readily where land was freelyto be had populationgrew like adjust downward. In support of this ten timesas fastas in a country England. That had thesis Cantillon suggestedthat, because numberswere less than formerly been asserted by Continentalcontemporaries Cantillon (e.g., of of increased consumptionper head, the by Vossius,Bayle, and Montesquieu[see my French population of England had declined as Predecessorsof Malthus, and D. V. Glass, "The had that of other countries;and he in- Population Controversy in Eighteenth-century England, Part I: The Background," Population dicated that, given a fixed quantity of Studies, VI (1952), 83-91]), though for reasons than those advanced by Canland or a risingscale of living,popula- somewhatdifferent
tillon;but this opinionseemsnot to have had supTheir incomes,supposedlyin money,approxi- portersin England until after 1750, when it was mated in value one-third the agricultural of produce questioned whethernumbers had increased since the GloriousRevolution(see Glass, op. cit.,pp. 69of the land theyowned (see Sec. IV below). 71). Petty (Hull ed., pp. 462-64) and Davenant 3 Urban growth increased the horse require(Essay upon theProbableAlethods Making a Peoof mentof the transport system, with each horse conple Gainersin theBalance of Trade [London, 1699], sumning produceof3-4 acres (pp. 97-98). Accordthe pp. 15-20), who cites Gregory King, supposed that ing to Petty (Hull ed., pp. 173, 175, 287-88), the England's populationincreasedat a low but steady supportof a man requiredabout the same amount rate. Hume, Voltaire,and otherslater denied that ofland as thatofa horse. numbershad decreased, but they made no refer39See pp. 35-36, 41-42, 52, 56-58. ence to Cantillon'sargument such. as
37

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gium. In effect,Belgium has swapped labor forland and therebygained at the expense of France much as Rome gained at the expense of other nations when it levied tributeupon them.41 Cantillon argued in general that "the exportation of all Manufactured articles is advantageous to the State, bepays and cause in thiscase the Foreigner supportsWorkmenusefulto the State"; and he pointed to "trading States" (e.g., Hamburg, Danzig, Holland, Venice, etc.) which,thoughmuch more vulnerable to adverse events than "great States" (e.g., France, Spain, England), or weresupporting had supported"great numbersat the expense of Foreigners." While he believed that a countrywhich exchanged raw produce for wrought goods had a lower population in consequence, he did not emphasize this point with respect to "great States" whichhad "no need to increasethe number of their inhabitants." But he did contend that pursuit of a policy of exporting only wroughtgoods and of retainingraw productsat home, especially by ifit were complemented a strongand well-secured merchant marine, would make for "greaterease and abundance" of produce in great states, would bring about an influxof gold and silver, and wouldproducetheadvantages associated with abundance of money (at least until internalprices became so high that the value of imports exceeded that of exports and the trade balance became
negative) 42

paid the long-heldthesis that foreigners incomes of persons engaged in production for export, received its classic expression in 1767 at the hands of James Steuart, who declared that a country gained in proportion as it exported Ques"work" and imported"matter."43 nay and the Physiocrats,proponentsof rejected Cantillon's luxe de subsistence, argumentin support of what could be luxe de decoration.For, believing that France's net product and national income would thus be augmiented,the Physiocrats favored both a high per capita domestic consumptionof agricultural produce and, at least so long as domestic agricultural output exceeded undercompetitive domesticconsumption exportation of conditions, a sufficient farm produce.44 Cantillon would have agreed that a state might export temnporary surpluses of farm produce, but he would have stipulated that they be whose exchanged not for manufactures, influxwould depress domestic eniployment and population growth, but for contributed gold and silver,whose influx a state's strengthand (withinlimits) to advantage.45 Because Cantillon believed raw produce to be the principalpopulafactor,because he was intion-limiting of terestedin the strengthening the state
43 Works (London, 1805), Book II, chap. xxiv; op. Johnson, cit., chaps. xi and xv. 44 See A. Landry, "Les Id6es (deQuesnay sur la population," Revue d'histoire des doctrines 6coet nomiques sociales,II (1909), 41-87; also my "The Physiocratsand Say's Law of Markets," op. cit., pp. 208 if. Cantillon did not distinguishbetween "productive" and "unproductive"labor.

Cantillon's doctrine, derivative of a

See III, 1; I, 15; also pp. 51, 132-34, on the 41 foreign of difficulty expanding markets;also p. 48 on of land-savingeffect coal consumption.
42 III, 1; pp. 28-34, also pp. 47-48, 75-76, between also distinguished 107-8. The Physiocrats small trading states and large land-rich states, sayingthat theirpoliciesapplied only to the latter (see my studiescited in n. 3).

45See III, 1; II, 8; pp. 129-30. If too much of the silver got into circulation,prices would rise above a point where the termsof trade, together with volume,were veryfavorable,to a point where exportswould decline and importswould increase (pp. 129-30). On militaryadvantages arisingfrom state's possessionof gold and silver,the best form of "reserveStock," see pp. 50-51, 104-5.

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instead of in the maximizingof per cap- tomary standards had risen only to be and ita output and income,46 because he imitated in turnby individuals situated But he wanted to expand exports,he overlooked still lowerin the social hierarchy. effectof in- did not employ these principlesin Part both the output-increasing ternational specialization and the fact I; in fact,unlikePetty,he seems to have that, if labor were relatively plentiful, been thinkingin terms of a relatively products would most static economy. labor-emibodying likelybe exported.47 In Part II, in the course of his discus4. In Part I Cantillon looked upon sion of changes in the price structure, with the dynamics the scale of livingof the lower ordersas he dealt incidentally set by custom and relatively fixed. At of living standards, recognizing(among the same time he indicated that it had other things) the principleof intercomrisen in the course of time. But he ad- modity substitutionby consumers (pp. vanced no dynamic theory to explain 96-97). In this discussion he did not this rise. Presumably,on his principles, assign so importanta role to the proprihe could have accounted for it in two etors,perhaps because, under the condiways. (i) He could simplyhave assumed tionshe assumed, the real incomeof the that fordivers reasons the real incomes proprietors had declined as a result of of the lowerordershad risen to new and risingprices, while that of many others higher levels and remained there long had risen. Increases in the quantity of enough to establish new customary hard moneyin circulation, said, operhe scales.48 (ii) He could have supposed ated to increaseboth subjective and obthat an increase in the consumption jective standardsof living.49 "I conclude in had been that an increaseofmoneycirculating a level of the landed proprietors and others State always causes therean increaseof imitated by entrepreneurs who were receivingincomes temporarily consumptionand a higher standard of in excess of their customary require- expense" (p. 100). Presumablynot much ments, with the result that their cus- time is requiredforan incrementin income to generate new and higher cus(I, 15) to say whether 46 Here, despitehis refusal small population was to be pre- tomarystandardsoflivingin the various a higher-income large population,he de- classes composing a population; "for ferredto a lower-income clares for a strongstate which derives its power nothingis easier or more agreeable than from the magnitude of its usefully employed labor forceand its consequentability to exchange to increase the familyexpenses,nothing or more difficult disagreeable than to wroughtgoods for gold and silver (I, 16; III, 1). Yet whereas, reasoning similarly,he condemned retrenchthem" (p. 94). Cantillon does the he the idlenessofmonks, described "Nobleman" that and not stress,as did J. S. Mill later,50 serviceand the magistracy as usefulin military as always "a great ornamentto the Country" (see only relatively large incrementsin inI, 16). come are likelyto generatenew custom47Cantillon was not thinkingin terms of a ary standards. Cantillon's argumentimalthough he did conceive multiplier, foreign-trade of implicitly a geographicalmultiplier(pp. 4-5, 8, ("Une 36-37), and, as Landry later demonstrated op. Theorie neglige'e," cit., pp. 750-57), his theory of the demand for labor contained a multiplier principle.
48This approach would have had to be reconciled with his assertionthat war losses were made up rapidly(p. 47).
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 account of the im159-71) and Keynes's thrilling pact ofpricechanges(op. cit.,chap. xxx). 5 Principles of Political Economy (Ashley ed.), pp. 348, 371, 380-84.

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plies that an increasein real incomeconsequent upon an increase in the amount of hard moneyin circulationwould tend the to diminish population unless enough produce were imported from abroad.5" For, whileproductionwould rise in consequence of the rise in prices (pp. 91-92, 96-97, 104), it apparently would not rise enough to offsetthe increase in demand for the means of living. Furthermore,the increasein incomewould tend, as would price rises, to be unevenlydissegmentsof the withimportant tributed, decreases in real suffering population incomeas a resulteitherof price rises or of unemployment (pp. 91-93, 100). persons Some of these adverselyaffected would tend to emigrate(pp. 91-93, 1012), while others, on Cantillon's principles, presumably would defer marriage. At all events, in the end the customary standards of living would generally 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 occasion emigrationand a decline in nuptiality.52 Although Cantillon did not relate luxuryand populationmovementsclosely, he did imply a general relationship. Inasmuch as only half a nation's wageand earnerswere engaged in agriculture, as there was not always enough nonto luxuryemployment engage the other half,it oftenwas necessaryfora part-presumablya small part (p. 28)-to sup-

ply "ornament and amusement" (pp. 50-52). Luxury, which tended to become installed when money was too abundant, could also be harmful.It discouraged population growthwhen it retarded the developmentofmanufactures in a state or entailed the continuing export of raw produce (pp. 42-43). Luxury an affected economyadverselyalso when it entailed an efflux gold and silver; of it had brought about the declineof Rome by occasioninga diminution the rnonof ey in circulation(pp. 108-10).13 5. The spatial distributionof both a state's inhabitants and their economic activities, according to Cantillon, assumed a regular and orderly pattern whichtended to be preservedby the network of market and price relationships that had gradually come into being as this pattern had evolved. This distribution reflected,above all, the extent to whichthe ownership agricultural of land was concentratedin the hands of a few and the constraints whichwere imposed by the impossibility transporting of services and by the tendencyof the carriage costs of transportablegoods to increase with distance. In his discussion,Cantillon, having noted (though perhaps less than Petty) the importanceof secondary and tertiary employmnents, made use implicitly the concept of a geographiof cal multiplier, even to the extentof calculating it (1, 3, 5; pp. 35---36). Perhaps, had he concentrated upon locational questions instead of discussing them 51 See pp. 94 ff. The increaseis the resultof min- incidentallyto his analysis of price beor of an exportsurplus.While he showedthat in havior, he mighthave anticipated moding had dimin- ern attempts to integratelocational and England the increasein meat production ished corn productionand increased the relative value of pastures and meadows, he did not trace populational theory; for he emphasized costs and arthe impact of the shiftupon population. Cantillon the importanceof transfer did not recognize what V. G. Simkhovitchhas rangernents for reducing them (e.g., I, called the "grass revolution" (Toward the Under4, 8). standingof Jesus [New York, 1937], pp. 150 ff.). The populationwas distributed among 52 Cantillon does not say this, but his argument
(pp. 103-4, 109-10) carriesthis implication.
53On

Rome cf. Keynes, op. cit.,II, 151 ff.

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villages, market towns, and cities, one of which served as the capital city. The villages were oriented to agriculture, having been broughtinto being by the fact that farmersand farm workers,if they are to avoid loss of time going to and fromwork,must live near the fields they till. The size of a village thus depended immediately upon the number settled there and the of agriculturalists numberof artisans required to minister and to the needs of these agriculturalists of ultimatelyupon the fertility the soil and the kinds of crops raised, together with the extent to which the services of artisanswere to be had at littletimecost in near-by towns. The size of a village usually was augmented somewhat by thefact that theyhad one or several less who broughtwith wealthy proprietors, them domestic servants and provided additional demand for the services of artisans. The villages were economically clustered about bourgs, each of which ministered to the distributiverequirements of a numberof surrounding villages. A bourgwas simplya somewhatlargervillage where markets were held once or of twice a week. The function the bourg was to permit merchants,at minimum transportand time costs, to collect for situatedin cities the products consumers fromvillages surrounding of the farmers the bourgs,to distributeto these farmers and their dependents the merchandise which they sought from the city, and to carryon theseexchangesat prices which were both satisfactoryand stable.54 Bourgs, though subject to the same growthdeterminantsas were villages, became somewhat larger inasmuch as relatively more artisans and
and supplyand was organized 54Only ifa market demand had become relativelystable were market stable (pp. 17-18). pricesrelatively

domestics located there and ministered to the needs of the landlords, agriculturalists, merchants, and one another. Cities, particularly those situated within the interiorof a country,owed their origin and being most of all to wealthy landlords who realized enough fromthe net value of theirone-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" ofpeople of theirown condition. The purchasing power of these great proprietorsattracted to the cities, besides their own retinuesand domestics, "an infinity" merchantsand artisans of who in effect ministered primarily the to wants of the landlordsand theirdependents and secondarily to the wants of others. So the advent of the landlords produced a geographical multipliereffect (e.g., I, 5; pp. 35-36). The size of a city was furtheraugmented if law courtswereestablishedthere,since these increased the demand for domestics and artisans. Presumably,because cities constitutedlarge marketsforthe output of workshopsand manufactories,these tended to take hold there.These manufactories tended to become very large when a city was situated along the seacoast or on the banks of a large riverand therefore had access (because of the resulting economy and convenienceof its transportconnectionswith the interior and exterior) to large domestic and foreignmarkets. The establishmentof workshops and manufactoriesbrought to a city not only entrepreneursand operativesbut also merchants,artisans, and domesticswho could serve thewants 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, courtsof last the

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resort,and the largest landownerswere situated and where were spent the revthe enue of the government, incomes of and the moneysof the great landowners, the many (e.g., visiting landlords, students,etc.) who, drawn by the city's atpassed some time in the capitractions, tal.55 producemoved afterharAgricultural to vest fromthe countryside the cities in responseprincipallyto the prior movement, in the formof money, of proprito profits etaryrents,taxes, and farmers' the cities.56Prices, accordingly, were in muchhigher citiesthanin the countryside,beinghighestin the capital city and lowest in agriculturalsurplus areas far removedfromcities. Cantillon writesas thoughthe prices of transportableprodin uce were determined the capital city, in and proprietors any area withfarmers getting these prices less allowances for costs incidenthe riskand the transport tal to the carriage of the produce from the area of provenience to the capital charactercity. Eve n greaterdifferences and ized the prices for nontransportable perishable products (garden produce, eggs,fuel,etc.) whichhad to be supplied frompoints near by the consumers.The in cost of livingwas high,therefore, the cities and low in the hinterland; and, was so expensive, the because transport

55 I, 2-6; p. 52. On transport costs see, e.g., I, 6; pp. 41, 87; and on tradingcities (e.g., Hamburg), treatedas a special class by the Physiocrats, 75, pp. 108, 129. Unlike Petty (Hull ed., pp. 462-65), Cantillon did not attemptto fixthe maximumsize of the capital city. In Cantillon's day students of rural economy were aware of location problems, [To be continued] and a number of eighteenth-century economists (e.g., Melon, Galiani, Forbonnais) argued in favor 57The last twoparagraphs are based upon II, 4-5. of of the diffusion industry(see Sauvy, Essai, pp. On shipbuilding p. 133. Adam Smithwrotein a see 85-87 nn.). somewhat similar vein,but he added thatabundance 56 One half the population lived in the country of provision makes its price low and so attracts and one halfin the cities,withsomewhatmore than manufacturingworkers (see Wealth of Nations, half the agricultural produce movinginto the city Book III, chap. iii). There is no reference Canto or away from country(I, 12; II, 5). the tillon.

net prices realized by agriculturalproducerswere low except in the vicinityof the capital city and adjacent to rivers and the sea wherecheap water transport was to be had. The geographicalprice pattern being what it was, a greaterdispersalof industryand population was indicated. In so far as practicable,manufacturing should be conducted in provinces far removed fromthe capital. Cloth, linen, and lace productionshould be carried on in the provinces,and the manufacture metal of tools near coal mines and forests. For such locations, by making largely unnecessary the carriage of foodstuffs and raw materials to the city, would save forbetteremployment labor ofmany the horses and wagonersand therebygreatly reduce transportcosts. The population of theprovinceswould increase,and net price in local markets for agricultural produce would rise. He suggested, however, with respect to remote provinces, that capital would have to be provided, marketsforproductswould have to be developed, and ventures which could better be carried on close to the capital or near riversand the sea would have to be avoided.57Cantillon failed to show,perhaps because he was concerned with monetaryquestions,how comparative plentyofproduce,in consequenceof its effectsupon the price structureand the distribution of the labor supply, might draw manufactures to an area. The same oversightmarked his discussion of international trade.