Chapter 1-Wealth 2-Human Societies An Essay on Economic Theory

Chapter OneWealth

Abstract: Cantillon defines wealth as the consumption goods produced by land and labor. This contrasted with the Mercantilists who thought money was wealth. Land is the s ource or matter from which all wealth is drawn; man’s labor provides the form for its production, and wealth in itself is nothing but the food, conveniences, and pleasures of life. Land produces grass, roots, grain, flax, cotton, hemp, shrubs and several kinds of trees, with fruits, bark, and foliage like that of the mulberry tree for silkworms, and it supplies mines and minerals. From these, the labor of man creates wealth. Rivers and seas provide fish for the food of man, and many other things for his enjoyment. But these seas and rivers belong to the adjacent lands or are common to all, and man’s labor extracts fish and other advantages from them.

Chapter TwoHuman Societies

Abstract: All human societies are based on a system of  property rights. The distribution of rights will necessarily  be unequal, and the use to which property is put will be  dependent on the tastes of the owners.  Whichever wa y a s ocie ty of men is formed, the ownership of  the land they inhabit will necessarily belong to a small number among  them.  In nomadic societies like the T artar hordes1 and Indian tribes, who  go from one place to another with their animals and families, the king or  leader must fix the boundaries for households and neighborhoods around  the camp. O therwise, there would always be disputes over living quarters  or access to life’s conveniences such as forests, pastures, water, etc. However,  when the districts and boundaries are settled for all, it is as good as  ownership while they stay in that place.  In the more settled societies, if a prince at the head of an army has  conquer  he may grant it to them while reserving the right to tax them every year  according to his needs and their capacity. In all these cases, the officers or  friends, whether independent owners or dependents, whether administrators  or supervisors of the production of the land, will be few in number  compared to all the inhabitants.  Even if the prince distributes the land equally among all the inhabitants,  it will ultimately be divided among a small number. O ne man will  have several children and will not be able to leave each of them a portion  of land equal to his own. Another will die without children, and will leave  his portion to someone who has land already, rather than to one who has  none. A third will be lazy, extravagant, or sickly, and be obliged to sell his  portion to someone more frugal and industrious, who will continually add  to his estate by new purchases on which he will employ the labor of those,  who having no land of their own, are obliged to offer him their labor in  order to subsist.  At the first settlement of Rome, each citizen was given two units of  land.2 Y et, soon after, there was as great an inequality among inheritances  as what we observe today in all the countries of Europe. The land eventually  was divided among a few owners.  Assuming then that the lands of a new country belong to a small number  of people, each owner will manage his land himself, or lease it to one or  more farmers. In this economy, it is essential that the farmers and laborers  should have a living, whether the land is exploited by the owner or by the  farmers. The owner receives the surplus of the land; and he will give part of  it to the prince or the government, or the farmers will give this part directly  to the prince on behalf of the owner.  As for the use to which the land should be put, the first necessity is to  employ part of it for the maintenance and food of those who work the land  and make it productive. The rest depends mainly upon the desires and lifestyle  of the prince, the lords of the State, and the property owner. If they are  fond of wine, vineyards must be cultivated; if they are fond of silks, mulberry  trees must be planted and silkworms raised. Moreover, part of the  land must be employed to support those who supply these wants; if they  delight in horses, pastures are needed, and so on.  2 Cantillon wrote that each person received two “journaux,” which is approximately two acres  of land.  However, if we assume that the lands belong to no one in particular, it  is difficult to conceive how a society of men can be formed there. We see,  for example, that for the communal lands of a village, there is a fixed number  of animals that each of the inhabitants are allowed to maintain, and if  the land were left to the first occupier in a new conquest or discovery of a  country, the establishment of ownership would inevitably have to be based  on some rule in order for a society to be established, whether the rule is  determined by force or by law.  

An
Essay on
Economic
Theory
An English translation of Richard Cantillon’s
Essai sur la Nature du Commerce en Général
Translated by Chantal Saucier
Edited by Mark Thornton

© 2010 by the Ludwig von Mises Institute and published under the
Creative Commons Attribution License 3.0.
http://creativecommons.org/licenses/by/3.0/
Ludwig von Mises Institute
518 West Magnolia Avenue
Auburn, Alabama 36832
mises.org
ISBN: 978-1-61016-001-8