Richard Cantillon is considered to be the founder of modern economic theory. His works were taken as a basis by Adam Smith in the formation of the theses of the theory of wages. However, very few facts about the life of this man have survived to this day. And even what is known is not reliable. What has survived to this day about one of the greatest economists of the 18th century (facts of his biography, contribution to the economy and demography and other information about Richard Cantillon) is presented in this article.
Biographical facts
Cantillon Richard, whose biography is shrouded in mystery, was supposedly born in 1680, although A. Fage's biography indicates 1697. According to rumors, he was a descendant of one of the associates of William the Conqueror. Some sources state that he was of Irish origin, who later moved to England.
In London, Richard Cantillon (pictured above) was engaged in commercial activities. In this field, he earned his first fortune. Cantillon later moved to France and switched jobs, becoming a manager in his uncle's bank. In 1717, after the death of a relative, the bank was completely transferred toyoung banker's order.
Richard loved to travel. During his short life, he managed to visit the countries of the Far East, Brazil, India. Almost nothing is known about the details of these journeys.
Richard Cantillon died in 1734 in his own house during a fire. This fire was not accidental. It was arranged by a servant in retaliation for his dismissal.
Commercial activity
While working at the bank, Richard Cantillon is actively interested in the system of John Law, the founder of the stock game in Europe. Thanks to this knowledge, he successfully carries out a number of transactions that helped him increase his capital. At that time, the shares of the West India Company were on the rise. Cantillon foresaw that the price of this asset would soon fall, and managed to sell them at a bargain price. He deposited his profits in bank accounts in London and Amsterdam.
After the collapse of the stock price in 1720, the French bank, which was under the control of John Law, went bankrupt. This was only to the advantage of Cantillon, since he managed to reorganize his assets in time and did not suffer at all from the fall in the shares of the West India Company. At the same time, clients of the Cantillon bank, whose guarantees were worthless, had to return their debts to the bank. In legal battles that sometimes lasted for years, Richard almost always won.
Contribution to economics
During his life, economist Richard Cantillon wrote many works, most of which have not survived to this day. He became famous in economic circles for his Essay on the Nature of Trade in General. This work was published in France 20 years after the death of the author in 1755.
The first part of the book defines we alth. At the same time, its separate elements are distinguished - land and labor. Cantillon claims that land generates three types of income:
- Reimbursement to the farmer.
- Profit of the real owner.
- Profit of the owner.
Economist Richard Cantillon didn't see money as we alth. For him, the real we alth was the land. Unlike the agricultural sector, enterprises cannot provide the equivalent of a third type of income and are therefore less profitable.
Wage Cantillon
Special attention in the writings of Cantillon is paid to wages. The Economist cites reasons for wage differentials, including:
- time spent on work;
- type of work activity and associated risk;
- degree of responsibility;
- skills needed to get the job done, etc.
The work of Cantillon also considered such concepts as market prices, barter, interest rates. He was the first to use the term intrinsic or real value, and showed its relationship with the market price.
Contribution to demographic science
Richard Cantillon was not only a banker and economist, but also a demographer. In his writings, he mentioned the enormous ability of the population toreproduction, which is the source of we alth and strength of the state.
Like the mercantilists, Cantillon pointed to obstacles to increasing the birth rate. However, unlike his predecessors, he singled out not catastrophic obstacles (wars, famine, epidemics of disease), but social ones - differences in consumption norms, thinking, lifestyle, income level, etc.
Cantillon, put forward the theory that for modern man, economic interests are a higher priority than the biological need for reproduction. In the 21st century, this theory has certainly been confirmed. Many families around the world sacrifice procreation in order to achieve financial well-being.
Richard Cantillon ahead of time
The figure of Richard Cantillon is one of the most mysterious personalities of the world economy. Neither the date of his birth nor the circumstances of his death are known for certain. At 23, he became one of the richest men in Europe, thanks to his talent as a stock player. However, this did not save him from an early death.
Cantillon's main work, Essay on the Nature of Trade, was seen by the world only 20 years after his death. The young economist was decades ahead of his time. His theories on wages and we alth were used by prominent economists, including the legendary Adam Smith. It was Cantillon who first divided society into three main classes: landowners, entrepreneurs and wage workers.
The young man was very fond of traveling, but about his visits to the easternalmost nothing is known about the countries. But it was during his trips to the Far East that the young economist was inspired by ideas that are widely used in economics and sociology even today.
Richard Cantillon, whose works are far from being preserved, was clearly ahead of his time. Assessing his life, it seems that with his early death he paid for his talent and extraordinary insight, which helped him make a fortune at a fairly young age. Perhaps if his other works had survived to this day, the modern view of economic science would be completely different.
