Richard Cantillon’s Early Monetary Views?

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The monetary theories in Philip Cantillon’s The Analysis of Trade (1759) differ in important respects from those found in Richard Cantillon’s much more famous Essai sur la nature de Commerce en général (1759). Contrary to the received opinion that the Analysis was a poor translation of the Essai, it is argued in this paper that many of these differences are due to the fact that Philip based his book on an earlier draft of his cousin’s great work. Comparisons between the two texts allow us to assess, for the first time, how Richard Cantillon’s developed his ideas on the quantity theory of money, the price-specie-flow mechanism and the determination of the interest rate.

Posted for comments on 17 Jan 2012, 10:38 am.

Comments (3)

  • Constantinos Repapis says:

    This paper is more proof that historians of economic thought will never get over that fateful fire that raged in Albermarle Street, London, on the 14 May 1734. In fact we are told by the Marquis de Mirabeau that this fire consumed not only one Richard Cantillon, but also ‘his precious manuscripts’ (see Higgs 1931, 382). Oddly enough, this fire could fit nicely with the narrative that Dr. Van Den Berg develops in his paper. If all his later manuscripts were burned, is it possible that an earlier manuscript survived? Maybe it was not even a complete manuscript, but some ideas, rudimentary, written in short form by the hand of a busy writer and trader who intended to flesh these out later. This is partly the feeling I got reading the extracts provided in Dr. Van Den Berg’s paper of The Analysis (1759) -I have not read the full text-. The feeling is of a man writing out ideas- fully formed but presented in a cursory fashion for his own use. Whereas the extracts of Postlethwayt’s Universal Dictionary are written in the style of belle lettres- written not for himself but for his peers. It also would explain Philip Cantillon’s need to complete these thoughts, by redrafting and copious borrowings from Hume. But before I go on let us talk dates so as to put this odd business into some perspective.

    1734 Richard Cantillon dies, murdered and then burned in a fire.

    1749 Postlethwayt publishes “A Dissertation on the Plan, Use and Importance of the Universal Dictionary of Trade and Commerce” which includes about 6000 words of the Essai according to Higgs (375).

    1751-1755 Postlethwayt publishes his Universal Dictionary which embodies almost the whole substance of the Essai, and was used when Higgs reversed engineered the French back into English for producing the standard edition of the Essai in 1931 (see Higgs 384). Higgs also provides an appendix on the parallels between the Dictionary and the Essai. (Appendix A)

    1752 First edition of Hume’s Political Discourses.

    1754 First full French translation of Hume’s Political Discourses. (See Van Den Berg p. 2)

    1755 The Essai is published in French (reprinted in 1756).

    1757-8 An Essay Upon Money and Coins by Joseph Harris. Hayek claims that this work reproduces large parts of Cantillon’s monetary arguments. He conjectures that Harris’ knowledge of Cantillon’s work comes from Postlethwayt’s publication of the Universal Dictionary (see Hayek, 1991, 177 n. 2).

    1759 The Analysis is published by Philip Cantillon.

    – Smith mentions a Mr Cantillon in The Wealth of Nations in relation to the wages of labour.

    These dates are; to put it blandly; the only facts of this mystery. We know little else. For example when was Richard born? Dates range from 1697 (Vivian Walsh, Palgrave Dictionary’s R. Cantillon entry (1987)) to 1685? (Van Den Berg’s paper) or possibly even earlier in the 80’s (Higgs, 1931, 366). This is not an inconsequential question. If born in 1685 then he was 49-50 when he died, otherwise, if born in 1697 he was 37. If he was in his 30’s he might have been reluctant to publish what must be the first book of a relatively young writer, and although that does not preclude the possibility that he was working on it for a long time, and wrote many notes and drafts prior to what was published later as the Essai, it does make it less likely. In any case less likely than if he was a man of 50 or more. To put things in perspective Ricardo, wrote his first article in economics when 37 and died when he was 51! If he had perished in a fire when 37 with only a manuscript remaining, we may have been wondering today about his earlier development and thought. After all according to sources Ricardo had read The Wealth of Nations in 1799, when 27. This only shows how difficult a task Van Den Berg had to tackle with Cantillon. However, even these problems should not distract us from Van Den Berg’s interesting findings, and his convincing re-assessment of the role The Analysis (1759) plays in all this. What I find most revealing in his paper is the close links that he finds between The Analysis (1759) and the extracts of the Essai in Postlethwayt, Universal Dictionary. Up to now the general view among those of us not specialising on Cantillon rested with Higgs, who had concluded that “collation of the Analysis with the Essai has proved unfruitful” (375). Given Higgs view that the Essai is close to what could be found in the Universal Dictionary, one did surmise that the links between The Analysis and the Universal Dictionary are also weak, and to this assessment we find in this paper an articulate disagreement. It is beyond this short note to see which side of this argument is the more convincing, and I leave this to the specialists.
    However, this is only one in a forest of questions. How many manuscripts escaped that fire? Here again we are at a loss. We know the French ‘translation’ escaped, found itself in Mirabeau’s hands and somehow got published. Legend has it that this French text was a translation of an English text by Cantillon to a friend for him to read it and it was not really ready for publication as such. Then the manuscript got lost. This was published in 1755. Somehow this storyline is partly convincing in that it explains how this manuscript escaped that fire. What about Postlethwayt’s many pages of direct, almost verbatim references? It has been suggested that this means that a second manuscript existed somewhere, in English, and from this we have Postlethwayt many references, even before the French book was published in 1755. This is Hayek’s view who writes that the source is ‘presumably Cantillon’s original English manuscript’ (Hayek, 1991, 177 n. 2) and has since been lost. Otherwise the French translation must have been really making the rounds in manuscript form across Europe. And Postlethwayt must have taken the time to translate it and use it for his own purposes. If, however, an English original existed, and this original was known in literary circles, I wonder why its existence was not mentioned by Mirabeau when he was lamenting that ‘all else perished into the fire’. Well, Van Den Berg notes that Cantillon was better known in France than in England. I wonder if scandal had something to do with this, and I mean the scandal of his death which for the family would have been no small matter. According to Higgs who has been to the Archives Nationales reading Mirabeau’s manuscripts, Mirabeau writes that “there fell into his hands a rare manuscript, the only relic of the immense works of one of the ablest men Europe has produced. This man is M. Cantillon. He [Mirabeau] erases the name and continues “I should have named him with pleasure…but I am assured that I should annoy his family.””(Higgs, 1931, 381). Very odd indeed. Could this family ban been so stringent that it made sure that the name of Cantillon would not be even mentioned in England? Hayek notes that Cantillon’s name was not mentioned either in the 1749 or the 1751-5 works by Postlethwayt (Hayek, 1991, 177 n. 2). Who knows? But it may explain the odd affair of the English manuscripts and possibly their demise. It may also explain the Hume story. I have been told by a Hume scholar that usually Hume acknowledged his sources. If he had read Cantillon’s work, why not say so? How close was Hume to Postlethwayt? I would find it difficult to believe that Hume had no knowledge of the compilation of the Universal Dictionary and had not been in correspondence with Postlethwayt, but I am sure that this question can be easily cleared by Hume’s published correspondence. Actually a very cursory search made no headway in this direction. And Van Den Berg mentions that Postlethwayt’s Universal Dictionary makes direct references to Hume in its later volumes (Van Den Berg, page 14, n. 34). Furthermore, the Postlethwayt link is also what explains Harris’ reference to Cantillon’s work without mentioning his name. At least this is Hayek’s and Higg’s conjecture. (Hayek, 1991, 177 n. 2 and Higgs,1931, 386)
    I will not stop here. I did say English manuscripts, and I meant the plural. Van Den Berg’s paper seems to suggest in one revealing passage pages 15-16 and note 37 (and elsewhere see notes 53/61) that in some ways the analysis of the monetary effects of printing money is significantly different between the Essai, the Analysis, and the Universal Dictionary, and that “This may indicate that the Postlethwayt version was actually based on a manuscript that in this place was more developed than the French text” (stress in original, page 16 note 37). If this is the case how can we then claim that the affinity of The Analysis to Postlethwayt version (I assume he means the Universal Dictionary) indicates a prior English manuscript, an earlier edition of the text found in the Essai? We cannot have it both ways. Does this mean a third manuscript was going around at the time in England and found its way in the hands of Philip Cantillon? Its seems that that fire was porous through which many manuscripts escaped. But although all three manuscripts escaped the fire, none survived, for we know not what happened to Philip’s manuscript either. It is a bit like Tutankhamun’s curse.
    If there is one thing in which I find myself in total agreement with Dr. Van Den Berg is his assessment that Philip Cantillon has been very unfairly treated in all this business. Jevons called him a ‘literary hack’ who disfigured the work of Richard, insinuating malice as well as a profit motive. All this because Philip published The Analysis in English and the text was inferior; much; to what Mirabeau published in French in 1755. Fine, all this is true. But also Philip was the first to attribute something to ‘a very ingenious Gentleman deceas’d’ and to actually publicly speak of ‘a Manuscript’ in England and acknowledge that he has taken parts from there and adapted it ‘to the present situation’. No one else in England seems to have done this simple justice to the ‘Gentleman deceas’d’ although they used his thoughts – not to speak of his words! Even the Essai was published anonymously, even though the man had died more than 20 years before. And in England not a word, although I am becoming more and more convinced that at least one English manuscript escaped that fire. In fact, unless I am mistaken, Cantillon’s name had not appeared in print in an English treatise before 1776, the Smith reference, as if to undo more than 40 years of injustice. And this by a writer that does not usually mention names. How odd indeed.
    I want to finally consider another possibility to those suggested by Dr. Van Den Berg. This is that Philip at some point found a manuscript of Richard’s book- not Postlethwayt’s one. Not, possibly, a complete draft, probably not a very late draft as well, for that fire must have consumed something, and chances are the latest drafts burned with the author carrying them around and working on them. Thus, it could be something Richard wrote for his own use, almost in shorthand, ideas sketched out for a book to follow, which he had left among some papers of his not in Albermarle Street. A draft with many gaps that were in time to be filled by copious references to Hume’s relevant works by Philip, when he was ‘updating’ the manuscript, acknowledging in the title page that these ‘true principles’ are ‘fully but briefly’ laid down. This may also explain the clipped tone of the quotes that Van Den Berg gives in the appendix of his paper, and possibly the, at times, crassness of the exposition. This however does not necessarily mean that The Analysis’ occasionally rudimentary exposition can be attributed to an ‘earlier’ period of Cantillon’s thought, at least I am not convinced of that. But why did Philip go into all this trouble if perfectly good editions of the work were already around? The 1755 Essai and Postlethwayt’s Universal Dictionary. Who knows? Maybe Philip did not know of the publication of the Essai (Van Der Berg agrees p. 2), it seems to have been scarce in England, and as of the Universal Dictionary it is really a mystery. Postlethwayt’s extensive copying of Cantillon’s work had flown below the radar until the rediscovery by Jevon’s of the Essai and the whole literature that followed that initial finding. Maybe he and others did not realise where Postlethwayt’s was taking his material from and Philip thought his manuscript did have some material not in the public domain. He may not have been entirely wrong, evidence provided does suggest the book did sell well.
    But these musings of mine must come to an end. The hypothesis just tendered, conjured up from thin air is without proof, and therefore I find no justification in pursuing it further. The last word must be on Dr. Van Den Berg’s paper and his interesting and insightful analysis. For his scholarship and effort in illuminating anew an old mystery he must be commended.

    References :
    Hayek, F.A. 1991, The Trend of Economic Thinking. Essays in Political Economists and Economic History. London: Routledge.

    Higgs, H. (ed.) 1931. Essai sur la nature du commerce en général by Richard Cantillon. London: Macmillan.

    F I N I S.

  • Alberto Giacomin says:

    The author clarifies the fundamental theory on which the paper is based on page 10 (lines 1-5): “The comparison presented in the previous section suggests that the middle part of the [Philip Cantillon’s ] Analysis [of trade] (chapters XII to XVI) was, to an important extent, based on a manuscript that was substantially less developed than the manuscripts that were the sources for, respectively, the [Richard Cantillon’s] Essai of 1755 and the several entries in Postlethwayt’s Dictionary”.
    As a matter of fact, the author unconditionally supports Philip Cantillon’s affirmation that his essay “was [t]aken chiefly from a Manuscript of a very ingenious Gentleman deceas’d and adapted to the present Situation of our Trade and Commerce” (p. 2, lines 7-9). The “Gentleman” is unquestioningly identified by the author as being Philip’s cousin, Richard Cantillon.
    However in view of the fact that the text of the Analysis of trade does not exactly coincide with the text of the Essai, the author further introduces the hypothesis that the manuscript may have included a previous version of this work, which would be fundamental in shedding light on the development of Richard Cantillon’s monetary theory.
    Indeed at the early development stage these ideas closely resembled those put forward by Hume in his Political Discourses. To sustain his theory the author assumes that Hume himself may have had access to an earlier (the same?) version of the Essai.
    At this point one might wonder why the assumption of one or more early versions of the Essai inspiring Philip Cantillon, Postlethwayt and Hume’s theories is more cogent than these scholars sharing current ideas which are not necessarily underpinned by a specific source. Why should the author identify an unpublished manuscript by Richard Cantillon as a specific source if the ideas therein are not significantly disentangled from the mainstream position of scholars in the early 1700s?
    Moreover, if an early version of the Essai were the primary source, the outcome would not be surprising, rather it would just suggest that his ideas concerning the role of money were aligned with those dictated by tradition. Indeed the author is so convinced of the validity of his research that once he realizes that Postlethwayt’s ideas concerning the effects of the increased supply of money are in two cases more complex than those elaborated in the Essai, he introduces the (ad hoc) hypothesis that Postlethwayt would have referred to “a [Richard Cantillon’s] manuscript that in this place was more developed than the French text” (p. 16, note 37, lines 6-7).
    In view of this the latter assumption should be accepted as it would allow to explain the “fascinating differences between that text and the Essai, including a very clear statement of indirect transmission effects through the interest rate and a more rigorous distinction between the effects of an increased money supply in a closed and an open economy” (p. 16, note 37, lines 3-5).
    Of course further, less complex hypotheses might be put forward to explain this contingency: for instance that Postlethwayt was not a serial plagiarist completely bereft of intellectual autonomy and hence unable to conceive original ideas. Moreover the author is inferring that a subsequent version of the Essai exists or that Postlethwayt appropriated certain observations made in the final version of the Essai, and which Richard Cantillon omitted before publication. We can safely say that imagination is the essence of science as it helps to shed light on what initially appears inexplicable, but these conjectures need to be proven by providing evidence which paves the way: currently and previously this evidence is missing. The author only advances the possibility that the whole investigation is based upon conjectures bereft of “external evidences” during the concluding remarks of his research.
    In the last paragraph of his paper, while comparing the Analysis of Trade by Philip Cantillon and the Political Discourses by Hume, he finally acknowledges (“perhaps the safest conclusion”: p. 27, line 38) that “the similarities between Hume’s monetary theories and the views found in the Analysis and the Essai could be coincidental and probably due to the fact that both men developed their views from a similar intellectual heritage” (p. 27, lines 35-38).

    • Richard van den Berg says:

      It is one thing to disagree with the interpretation of the evidence I present in my paper and another thing to completely ignore that evidence.

      As far as I understand his comments,Alberto Giacomin simply repeats the old view, first put forward by Jevons,that Philip Cantillon’s book is no more than a poor adaptation of the French Essai. According to this view ANYTHING in the former work that differs from the content of the more famous French work was made up by Richard Cantillon’s cousin. This view has been widely accepted, but has actually never been put to the test. Giacomin repeats it by suggesting that Philip must have simply assimilated those monetary views in his work that differ from the Essai from ‘the mainstream position of scholars in the early 1700s’. But it is highly unlikely that this is what happened.

      The reason to doubt it are the occurrences throughout the text (but most prominently in ‘part II’) of extensive passages where the Analysis and Postlethwayt’s Dictionary run parallel, but where at the same time the text of the Essai differs. Figure 2 (p.13) in my paper gives an impression of the extent of this phenomenon in the middle part of the versions. We are not talking about vague similarities in views, but extensive agreements in the order of presentation and structure of the arguments (though not always identical wording).

      With regards to the passages identified, it is near impossible that the similarities happened by accident (that is, that Postlethwayt and Philip Cantillon individually added their own observations inspired by a body of more generally accepted monetary thought, to Richard Cantillon’s writings). In other words, there is some ‘literary dependence’ (as biblical scholars call it) between the two English versions as well as the French version. I am not sure why Giacomin dismisses this evidence and asserts that my argument is merely the product of a runaway imagination.

      Of course one can disagree about the explanations for the literary dependence. This to me seems a more interesting discussion. In effect I speculate (yes, of course I cannot be certain) that there is a indirect literary dependence. That is to say, I do not think that the similarities between the Analysis on the one hand and the Essai and Dictionary on the other hand are best explained by the possibility that Philip Cantillon borrowed directly from and combined the latter two printed texts. The more sketchy and ‘traditional’ content of the monetary passages in the Analysis suggest to me that Philip had access to an earlier manuscript. Only the discovery of this manuscript would put my speculation beyond doubt. But in the absence of this, it doesn’t mean that the issue of literary dependence (until now never seriously considered by Cantillon scholars) is not real.

      The possibility that Hume knew (a version of) Cantillon’s work is quite a separate issue. The reason I mention this possibility in my paper is that a number of commentators have argued in favour of it. I disagree: in Hume’s case I DO think that similarities with Cantillon may be explained by that fact that those kind of ideas were ‘in the air’.

      I have more sympathy for Giacomin’s incredulence where it concerns my speculation (expressed in a footnote, and not a major point in my main argument) that the fact that the Dictionary in some places contains reasonings that appear to be MORE advanced than comparable ones in the Essai may mean that Postletwayt had access to a later manuscript. Instead these differences (and there are others in addition to the ones mentioned in the paper) could indeed be due to original contributions by Postlethwayt. What I know of Postlethwayt’s other writings suggests to me that he did not have the required theoretical bent of mind. But I admit it would be possible for someone else to make the case that Postlethwayt is a more significant economist than he has been thought to be.

      Finally, I have to say that I really appreciate the communication this forum allows. This is so much better than putting something to paper that challenges received opinions and being met by silence.