Richard Cantillon and James Steuart

Abstract

Ever since its 'discovery' by William S. Jevons toward the end of the 19th century, Richard Cantillon's sole published work, Essai sur la nature du commerce en général, 1755, has been given critical acclaim by such first-rate theoreticians as H. Higgs, J.A. Schumpeter, F. Hayek, T.W. Hutchison, and J.R. Hicks. It is widely recognized as an essential golden link between William Petty and Francois Quesnay in the history of economics. On the other hand, James Steuart's major work, An Inquiry into the Principles of Political Oeconomy, 2 vols., also published in the latter half of the 18th century, 1767, has long been neglected both in Great Britain and in France, and has been duely acknowledged only after the end of World War II. That it was given some notice in France during the French Revolution and translated into French by E.F. Sénover and published, and that even its another French translation was also completed (but not published) by Goguel, failed to secure a rightful place for Steuart in the history of political economy during his days and after.
It is indeed of great academic interest and importance to place James Steuart in pre-Adam Smith political economy of the 18th century and to examine how Steuart's Principles is related with Cantillon's Essai, both positively and negatively. Because of the asymmetrical reception of these two works, however, this task has effectively only begun, and has thus far produced only A. Brewer's Richard Cantillon. Pioneer of Economic Theory, 1992. And it has recently been shown empirically by P. Groenewegen that the Cantillon to whom Steuart referred to was not Richard Cantillon but his brother-in-law, Philip Cantillon, and The Analysis o f Trade, 1759 by Philip explains in its inside of cover that the author followed Richard's work very closely, but it is of far inferior quality than the latter's Essai. Thus, it is hardly imaginable that Richard Cantillon's work had a direct impact on James Steuart's. However, within the context of chaos during the early phase of the establishment of political economy as a discipline in the 18th century, it is quite worth-while to examine whether or not Richard Cantillon had any indirect influence on James Steuart, and if so, in what forms.
This being said, however, these two classics do not render themselves to ready comparison. Cantillon's Essai is characterized by the clarity and rigor of its purely theoretical analysis while Steuart's The Principles is an attempt at equally theoretical development but always on the basis of detailed historical and institutional, thus complex, reality of how national economies operated. Abundant fruit can be expected when today's observers free themselves from their narrow theory or theoretical outlook in assessing them.
In this essay, I do not attempt a direct and detailed comparison of these classical masters. Instead I try to compare them on how they dealt with the following broader and urgent issues of political economy: a. the principle of wealth, b. population, c. money, d. industry, profit, and entrepreneur, e. circular flow, and f. the issues of economic liberalism versus mercantilism (or rather dirigisme in French context).
We must also note that these two classical authors both were born outside England, obtained meaningful experiences particularly in France, and looked at the same subject matters of money, credit and the circular flow from their respective angles of observation. They are sure to give us fresh insights and perspectives on the so-called 'nationality of political economy' (Jevons).