Books

First edition of a founding text in economics, of which William Stanley Jevons declared: "Cantillon's essay is, more emphatically than any other single work, 'the Cradle of Political Economy'" (Jevons, p. 68). Richard Cantillon (c. 1680-1734) was an Irish-born banker and economist, forced to emigrate to continental Europe by the Williamite confiscations. He honed his financial skills working for the British army's paymaster-general during the latter stages of the War of the Spanish Succession. He next proved his understanding of the market by making fortunes speculating against John Law's Mississippi Company and by purchasing put options (the right to sell at a predetermined price) during the height of the South Sea Bubble. His successful speculations reinforced his view that the monetary system must be based on intrinsically valuable metals. The Essai, Cantillon's only published economic work, carries the imprint of Fletcher Gyles, a leading London bookseller who had died some 14 years earlier: actually, the book was published clandestinely but with a "permission tacite" by Guillyn in Paris. The "Traduit de l'Anglois" notice on the title is false. "Cantillon's Essai is notable for its model building, its analysis of market forces and the role of the entrepreneur, its outline of the circular flow of income, and its monetary theory. Cantillon was the first real model builder in economics. His method was to conceptualize the essentials of the economic world and represent them in a simplified model which became more and more complex through the provision of further interlocking elements. To achieve this, in Cartesian style, he stripped the economy down to its bare essentials to determine the fundamental forces at work. He started with a landlord-dominated, barter, command economy which was closed off from the rest of the world. In this primitive structure three socio-economic classes, the landlord, overseers, and workers, interacted. By degrees he transformed this structure from a command economy to a market economy, from a barter system to a monetary system, and from a closed economy to an open economy" (ODNB). The Essai had a significant influence in developing Quesnay's circular flow of income and on Adam Smith's theory of resource allocation in the Wealth of Nations (1776). In distinguishing between market price and intrinsic value and showing how resources moved into those sectors where the market price was above intrinsic value and away from those sectors where market price was below intrinsic value, Cantillon influenced Smith's famous distinction between market price and natural price. He also pre-empted later studies of human population, with a brief but almost complete anticipation of the principles of Malthus. This copy has the contemporary booklabel to the front pastedown of "Du cabinet De M. Sermet, Directeur des Fermes du Roi". The Fermes du Roi was part of the Ferme générale, the extremely unpopular system of tax farming which supported, and ultimately undermined, the ancien régime. The physiocrats, who had been inspired by Cantillon, opposed the Ferme générale and proposed reform to make taxation directly administered by the state, but the vast organization acted as a block to change in the run up to the Revolution, whereupon the institution was ended. Books That Made Europe, p. 140; Cossa 243.1; Einaudi 846; En français dans le texte 159; Goldsmiths' 8989; Higgs 938; INED 933; Kress 5423; Mattioli 552; McCulloch 52; Sraffa 682. William Stanley Jevons, 'Richard Cantillon and the Nationality of Political Economy' in The Contemporary Review, vol. 39, 1881. Duodecimo (163 x 100 mm). Contemporary mottled calf, red morocco label, gilt in compartments, marbled endpapers and edges. Woodcut title page device, head- and tailpieces. A very small number of copies contain at the end a copy of Barrois's catalogue of publications for sale, which lists Cantillon's work with his initial, here not present. Joints and extremities nea.