Historical Definitions of an Entrepreneur
The term
Entrepreneur was used already used in the 17th century in French Military
History.
The physiocrat Richard
Cantillon was one of the first writers who mentioned the term in an
economic context. Cantillon characterized an entrepreneur as an individual
who engages in business without an assurance of the profits he will derive from
his enterprise.
It was Jean
Baptiste Say who made the term popular in Economics at the turn of the 19th
century. Say defines an entrepreneur as someone who uses the productive
factors efficiently, coordinates the production process and bears the risks of
production. The entrepreneur, Say said, shifts the economic resources out
of an area of lower productivity into an area of higher productivity and
greater yield.
Joseph
Schumpeter was the first major
economist to go back to Say. In his classic ‘Die Theorie der wirtschaftlichen
Entwicklung’ published in 1911 he broke with traditional economics. According
to Schumpeter the entrepreneur always searches for change, responds to it,
and exploits it as an opportunity. He tells us that innovations,
i.e. the carrying out of new combinations, take various forms besides mere
improvements in technology.
Definition of an Entrepreneur according to Reinhold Würth
The
term Entrepreneur not only refers to the independent businessman/woman
himself/herself, but also to top executives in responsible management positions
in large corporations and social institutions since it is also churches and
political parties that require entrepreneurs of their own. Thus,
entrepreneurship is not limited to the economic sphere, to the maximization of
profit or share holder value, but it pertains to all activities of human
beings. The director of a school and the director of a workshop for handicapped
people do very much the same things and can be called entrepreneurs if they do
their jobs with pleasure and with enthusiasm and if the people they are
responsible for and look after react positively to them. Entrepreneurship
symbolizes the courage to accept responsibility. The entrepreneur is highly
efficient and productive, he inspires others by his predictability and honesty,
and his behavior is an example to everybody. According to Reinhold Würth the
foundation of a company and independence in business is one of the most
rewarding ways to live a truly fulfilled life. The most important thing is:
"to
roll up your sleeves and start working".
Also
see the Fundamentals of Entrepreneurship on
John
Law
How John Law's Failed Experiment Gave Us a New Word: 'Millionaire'
THROUGHOUT HISTORY, the people who have
become very wealthy have had two things in common: Each had a great gift or
idea, and each lived in a society where that gift was highly valued. A brawny
and aggressive man with state-of-the-art spears probably wouldn't get rich in
modern America, but he might have been the Bill Gates of the year 1000.
Similarly, today's brainy Internet entrepreneur might very well have been a
slave 1,000 years ago.
In 18th-century France, the scarcity of gold
impaired the country's ability to trade its surpluses with other nations. Many
of the French enjoyed great affluence, yet they and the profligate government
of Louis XIV always seemed to be scrounging for gold.
It was the great fortune of a man named John Law
that he could introduce his ideas about paper money to the country. "My
secret is to make gold out of paper," he once said. The result was
famously lucrative and then even more famously catastrophic for the French, but
Law's demonstration of the flexibility afforded by paper currency and by the
creation of money by bank or government fiat has been the basis of finance ever
since. His exploits gave the world a word it cherishes to this day: millionaire.
The following excerpts from a new book by Cynthia Crossen about the amassing of
great fortunes through the ages shows linkages between Law's epoch and our own.
Read
further on http://www.freerepublic.com/forum/a39770f0858a0.htm
Richard
Cantillon
Richard Cantillon was a banker who played an
important role in the monetary schemes of John Law. His Essai sur la Nature de
Commerce en Général (nature of Commerce/ trade in general) is a true monument
in the history of economic thought. Cantillon made path-breaking contributions
to economic methodology and economic theory, including the role of the
entrepreneur and the concept of opportunity cost. His spatial economics and
population theory are considered modern. He first presented the price-species
flow mechanism and this formed the basis of his highly advanced monetary and
business cycle theories. This review and extension of Cantillon’s contributions
to economics marks him as the true originator of economics.
Few people know Cantillon's secondary
business was as a wine merchant, which no doubt sharpened his understanding of
entrepreneurship, risk taking, and interest and price formation.
The
role of the entrepreneur is one of Cantillon's great contributions to economic
understanding. He speaks of the entrepreneur in the classic sense of the
undertaker of great business adventures, but Cantillon also has a theoretical
distinction between those who work for a fixed return or wages and those who face
uncertain returns, including farmers,22 independent craftsmen, merchants, and manufacturers. These
entrepreneurs purchase inputs at a given price to produce and sell later at an
uncertain price.23 In the
pursuit of profit, the entrepreneur must bear risks as he faces the pervasive
uncertainty of the market.24
For example, the farmer has fixed expenses but:
The price of these products will depend
partly on the weather, partly on demand; if corn is abundant relative to
consumption it will be dirt cheap, if there is scarcity it will be dear. Who
can foresee the number of births and deaths of the people in a State in the
course of the year? Who can foresee the increase or reduction of expense that
may come about in the families? And yet the price of the Farmer's produce
depends naturally upon these unforeseen circumstances, and consequently he con-
ducts the enterprise of his farm at an uncertainty.25
The unsuccessful entrepreneur will live
poorly or go bankrupt, while the successful entrepreneur will obtain a profit
or advantage and cause entry into the market, “and so it is that the
Undertakers of all kinds adjust themselves to risks in a State.”26 The entrepreneur brings
prices and production into line with demand; in well organized societies,
government officials can even fix prices of basic items without too much
complaint.27
The
above work is picked up from “The School of cooperative individualism” which is
available at www.cooperativeindividualism.org
Life and Work of Richard Cantillon
by Henry Higgs
LIFE OF RICHARD CANTILLON
Half a century has elapsed since Jevons revealed
his discovery of Richard Cantillon. A discovery it was, as truly as when an
explorer unearths a statue silted over by the sands of time, puts it upon a
fitting pedestal, and is the first to give its full, correct description. The Contemporary
article did not mark the end of his interest in the Cantillon mystery. What has
become of Cantillon's manuscripts? Who succeeded to his property? Is the
English essay, the Supplement, the French manuscript still in existence? It was
perhaps with these questions in mind that he went to Somerset House and
examined the wills of Richard and Philip Cantillon.*17 He must have found
there that Richard Cantillon was engaged in numerous lawsuits, and Jevons was
not the sort of man to leave a clue of this kind neglected. But before he could
follow it up his life was ended by untimely accident on 13 August 1882.
Little more was heard of Cantillon until the
formation of the Royal Economic Society. The first number of the Economic
Journal appeared in 1891 and contained a learned article by Dr William
Cunningham on "The Progress of Economic Doctrine in England in the
Eighteenth Century," ranging over the period 1688-1776 and naming a great
number of writers but making no mention of Cantillon or his work. It seemed as
if Cantillon were once more forgotten and that Jevons had written in vain. One
who had not forgotten either Cantillon or Jevons was Professor Foxwell. In his
lectures, which I attended from 1885 to 1887, he laid stress upon the
importance of the Essai and referred to Jevons's article, and it was
with his encouragement and aid that I endeavoured to discover some further
information about Cantillon. Researches at Somerset House, the British Museum,
the Public Record Office in London, and the Archives Nationales and
Bibliothèque Nationale at Paris brought to light a mass of documents which
served as the basis of an article on Richard Cantillon in the first volume of
the Economic Journal (pp. 262-291). This appears to have aroused more
interest. Professor C. F. Dunbar of Harvard University consulted me as to a
reprint of the Essai and invited me to write a prefatory note to it and
an article on "Cantillon's Place in Economics" for the Harvard Quarterly
Journal of Economics.*18 No new facts about
his life have since appeared. M. Espinas devoted serious attention to Cantillon
in his Histoire des Doctrines Economiques, Paris, 1891 (pp. 179-197). M.
Robert Legrand wrote a doctor's thesis on Richard Cantillon, Paris,
1900, which contains nothing original.*19 In their Histoire
des Doctrines Économiques, Paris, 5th ed., 1926, p. 53, Professors Gide and
Rist say: "Ce Richard Cantillon, dont personne n'avait parlé pendant plus
d'un siècle, est redevenu fort à la mode." The references of various
writers since 1891 are too numerous to mention. The first volume of the Economic
Journal is now out of print and scarce. The gist of the article of 1891 is
now reproduced with some revision and additions.
Nothing supports the surmise of Jevons that the
Cantillons were of Spanish origin.*20
Among the manuscripts in the Bibliothèque
Nationale at Paris is a draft or copy of a letter*21 to our author from
James Terry, Athlone Herald under James II, dated Versailles, 24 February 1724
addressed to Mr Richard Cantilon [sic], London: "I am sorry you
sent to Mr Hocking for Ireland
for your Genealogie, when you were sincible yt
I came over with the late Deceased King, and then brought with me his records of
that Kingdo. I writt to Capt. Commerford that the first of your family that
Landed at the Conquest with King Henry the Second was Hugh Cantillon, and those
of your family that cam in to England with William the Conqueror as also those
of the same who went with Godfroy of Boulion to ye Conquest of the holly Land, the armes I past your Cosen
Sir Richard are not of your family they are a branch who changed and would have
a Lizard how that mistack cam I cant remember for your the chife of the name
father and son for a longe continuance to this Day. I did advise Mr Commerford that you should joyne your
Seconds [i.e. Wife's] Genealogie to it I meane the O Mohoneys...." Other
genealogical material is abundant but conflicting. In the Revue Historique
de la Noblesse, Paris, 1841, 8vo, t. III. pp. 28 seq. is a Notice
historique, généalogique et biographique de la Famille de Cantillon (B.M.
Press Mark PP 3822). This is a well-documented account with the family arms and
was reproduced the same year (with additions from J. Burke's Heraldic
Illustrations) par le chevalier O'S, Gentilhomme Irlandais, Paris, 8 pp.
8vo. We are told that the family long held Ballyhigue Castle, and the peasants
shew the ancient burial place of the Cantillons on an islet visible at low
water on the Kerry coast. They adhered staunchly to the Stuarts with whom they
were allied. Roger, sixth baron of Ballyhigue married Elizabeth Stuart in 1536.
Coming to the seventeenth century we find mention of one Richard Cantillon who
went to France in the suite of James II, fought at Boyne in command of a
company of dragoons, was wounded, and later was made "Chevalier de la
facon du Prétendant."*22 In the dossier
quoted above is his receipt for 107 livres for silk supplied to Catherine
Trant, daughter of James Terry, dated Paris, 11 July 1695, "att ye nine Rattes, Rue St Honoré." Later we find him busy as
a banker in the Rue de l'Arbre Sec, Paris. A number of documents testify to his
various activities. On his death on 5 August 1717, he was found to be
insolvent, assets 68,200 livres, liabilities 310,000 livres. The trustees, as
we should call them, under his bankruptcy had paid off about 25 per cent. of
his debts when our Richard Cantillon enters on the scene. According to a signed
statement filed by the trustees, Richard Cantillon, junior, himself one of the
largest creditors, generously paid the remaining three-quarters, moved thereto
only by the desire to honour the memory of one whose name he bore.*23
Richard Cantillon the economist, according to the
Revue historique a first cousin of the Chevalier, was probably born
between 1680 and 1690. He married in 1722*24 Mary Anne Mahony,
daughter of Daniel Mahony, a rich merchant of Paris. Her mother was Lady Clare,
widow of Charles O'Brien who, but for the attainder, was Viscount Clare. He
escorted the consort of James II to Paris, and died of wounds received at
Ramillies. The French writers refer to Daniel as Ommani, which Mr H. R. Tedder
erroneously conjectured to stand for Ommaney*25 but is obviously a
Gallicised form of O'Mahony. Whether or not our author was at first a banker in
London, as is sometimes asserted, is doubtful. He may have acted there as agent
for Sir Richard's Paris house. But on 18 May 1724 he swore an affidavit in the
suit Hughes v. Moore (Chancery Proceedings, 1441, in the Record Office)
in which he "admits that he is a naturall born subject of the Crown of
Great Britain, and did for severall years carry on the Business of a Banker in
the Citty of Paris until about the beginning of the month of August in the year
1719, and about that time left off the Trade or Business of a Banquer—and
settled Mr Edmund Loftus & Company in this Defendant's house at Paris to
manage the Trade and Business of Bankers there, and this Defendant was no
otherwise concerned with them in the said House than as comandite thereof...
And after... this Defendant went into Italy and returned from thence to Paris
in... February 1720 N.S. and having reason to be dissatisfied with the management...
disengaged himself from his said stipulations" and thereupon "did
settle a Partnership as Bankers... between Richard Cantillon the younger, who
is this Defendant's nephew, about 4 years old at that time, and John
Hughes" who had "been before that time a Banker in London."
Cantillon found the whole capital, 50,000 livres tournois, and was to have
two-thirds of the profits, Hughes one-third and the nephew only what his uncle
allowed him. The partnership was to pay Cantillon 1200 livres a year for the front
of his house, Château La Samaritaine, Rue de la Monnoye, Paris,
Cantillon reserving part of the back for himself. The partnership was for
twenty years but might be determined at any time at Cantillon's pleasure. He
was to have supreme authority, but not to be liable for any losses beyond his
50,000 livres, being only comandite "which is known to all Merchants and
Traders in Foreign parts to be a person who erects and fixes a House in
business which he is supposed to encourage and support without his name being
concerned in the said House or being himself liable to any transactions
therein, the private stipulations between the comandite and the said House
being quite separate from the Credit or currency of business of the said
House."
This is confirmed by a printed document forming
the case of Richard Cantillon, marchand mercier à Paris, before the Parlement
criminel, entitled "Mémoire pour Richard Cantillon intimé et
appelant. A Paris, chez André Knapen, au bas du Pont Saint Michel, au Bon
Protecteur, 1730. 18 pp. folio."*26 He was attacked by
the brothers Jean and Remi Carol, bankers at Paris, for having practised
"l'usure la plus énorme," and taking flight to England leaving Hughes
embarrassed by his creditors. They say "ce Richard Cantillon, qui se dit
aujourd'hui gentilhomme irlandais, s'était dit natif de Cherbourg en Normandie,
dans une lettre de marchand mercier qu'il avait prise en 1716." They
accuse him of defrauding them, and on one of his visits to Paris had him
arrested and imprisoned in the Châtelet on 11 November 1729. He was released
the next day but on their representing that he was a foreigner and might leave
the country he was again imprisoned in the Conciergerie but obtained an early
discharge.*27 The Mémoire
for Cantillon says: "Le Sieur Cantillon, Irlandais d'origine, vint
s'établir en France en 1716. Il y forma un commerce public de banque, qui en
peu de temps devint assez florissant. Le fameux système qui commença à se
developper en 1719, ne le seduisit pas comme beaucoup d'autres, il crut au
contraire devoir se mettre à l'abri de l'orage qu'il prévoyait: c'est ce qui
l'engagea à renoncer au commerce dans lequel il voyait trop de dangers. Il
renferma tous ses papiers dans un coffre qu'il confia aux Benedictins Anglois
et partit pour l'Italie apres avoir procuré ses correspondances à un nommé
Loftus avec qui il forma une simple société en commandite le 31 juillet
1719."
Grimm's account of him in 1755, to which Jevons
refers (p. 336, ante),
is the basis of the article in the Biographie Générale. Its general
accuracy is confirmed by references in Cantillon's correspondence*28 to the Princesse
d'Auvergne and to John Law. In one of his letters he says (Paris, 21 June
1730): "I find that if I had remained here from the beginning of Hughes's
Partnership (which you know the Minister of the Scheme [i.e. Law] made
dangerous for me to do) I never should have had any of these Lawsuits."
The animosity of Law was due not only to Cantillon's outspoken distrust of his
scheme and to his bearing of the Stock, but also to his Exchange operations, as
Cantillon remitted largely to England and Amsterdam and profited greatly by the
fluctuations in the currency, which he foresaw. Lady Mary Herbert, daughter of
Earl Powis, was one of his clients and an intrepid speculator for the rise in
Mississippi stock. She "pyramided" her purchases by depositing shares
as cover for advances to buy more. Her brother Lord Montgomery, her husband
Joseph Gage, and her aunt Viscountess Carrington followed suit, though
Cantillon says he advised them all (so far as was safe and prudent for a person
then to do in France) to sell out as the Actions must fall. He describes Lady
Mary and Lady Carrington as his friends. Lady Carrington says Cantillon
"sold out all his French India stock and other papers at a great price and
remitted to England and Holland whereby he made a great Estate." The
Carols, like other bankers, caught the infection. They were partly influenced
in their operations by an Arrêt of 11 March 1720 which ordered a gradual
revaluation of the French crown so that it should be worth about 50 pence at
the end of the year.*29 The Herberts say
they thought the Arrêt would have its intended effect, but they produced
a letter from Cantillon to Hughes dated London, 29 April 1720, which shews that
he predicted the crown would not be worth more than about 28 pence, and advised
an advance only of 18 pence upon its security. The main charge against him in
the various lawsuits was that he had no right to sell the shares deposited with
him and that the profits he made thereby were due to the depositors. His reply
to this was that the shares were not numbered or earmarked and that he was
always able and willing to supply shares on demand. A charge of usury "for
a difference in exchange (...in a place where exchange in that very month
carried about 30 per cent.) for six to eight months," he considered
absurd. As to his remittances to countries outside France "there was no
declaration against it" and he is "surprised Mr L. [John Law] should
say they were declared enemies who remitted." The sums involved were very
large. He obtained judgment in the Court of Exchequer for over £40,000 from
Lord Montgomery, sued Lady Carrington upon her note of hand for £20,000, and
Gage for about £10,000. He also succeeded in the suit brought by the Carols to
whom he had advanced 35,000 florins on the 20th March 1720 against their bill
on Amsterdam for 41,000 florins payable at eight months. He seems to have had
good answers to all his opponents. How heavily the imprudent bankers suffered
by the "crying up and down" of the currency may be gathered from
Postlethwayt's statement*30 that out of about
200 bankers in Paris in 1715 only three or four survived the
"diminutions" of the crown. Their losses were probably very heavy in
1720 and much of them went into Cantillon's pocket. The passages in Part III,
chapter V, of the Essai are an interesting commentary upon his actual
experience.
A document*31 which has recently
come to light in the Record Office throws a clear light upon one of the Herbert
transactions. Lady Mary Caryll (née Herbert, but now a second time a widow)
suing one Strickland, in Chancery, the defendant's reply contains (though its
relevance to the case is not clear) a letter from her dated Seville, 6 October
1730, which she had addressed to the Court stating that on the 20th February
1720 she borrowed of Cantillon and Hughes £10,000 on a bill for 3 months
payable in London, which was discounted at the Bank of England a few days
later. Hughes asked for security and she handed him 800 primes of French India
actions, then worth £30,000. In May these would have fetched £22,000, in June
about £12,000, but later fell almost to nothing. In April following the first
loan she borrowed a further £12,000 against a bill on Lord Montgomery for
£18,665, which she says is 55 per cent. interest for 9 months. She adds
Cantillon might have been content with this 55 per cent. without robbing her of
the other half, but as her securities were sold at once he was really lending
her her own money and had besides the interest on the money so long in his
hands, altogether wronging her of nearly £76,000, which "must make
Cantillon appear very black." It is easy to imagine how Cantillon would
have answered this. His great financial coup was made prior to his setting up
the firm of Cantillon and Hughes. His cashier says he drew a profit of 2½
millions out of his business in a few days. In the single year, March 1719/20
to March 1720/21 the books of his cousin, Martin Harrold, a London banker, shew
payments of over a million to his account filed in the Court by Harrold.
John Hughes died suddenly in Paris on 9 June
1723, and his widow Esther Hughes sued Cantillon for an account of the sums due
to her husband as a partner in the firm. She had communicated to the Herberts
some letters from Cantillon to Hughes in one of which Cantillon says: "You
remember upon our first broaching these schemes you were content to stand in
the Gap.... If the affair of Lady Mary was to be carried against us... there is
no medium but your flying or going to Prison.... It will be your own interest
to take an imprisonement of a twelve month rather than see all our schemes
pulled to pieces; for, by standing the Tack, you have a maintenance secured to
your Family; and if all were turned the other way you would be in an ordinary
condition." After his release "the reinstating your house in
Business... would be still practicable and easy." The Herberts say that
"the schemes mentioned... were to lend money to severall persons upon
French India Actions, and to take high premiums or advanced prices on French
crowns, and to sell out such Actions, and to remit the produce thereof into
Foreign countries in order to turn the same into Sterling money for their own
profit, and after the bills and notes... taken from persons with whom they
dealt in that manner should become payable... to oblige such persons to pay the
whole money thereon, and not to disclose that they had sold the said Actions
and raised anything thereby." They allege that "the said pretended
Partnership between the infant Cantillon and Hughes" was "a
Skreen" and established "on Pre-meditated Fraud"—Hughes, a man
of straw, to go to prison if the scheme turned out badly, and so avoid the
financial consequences, Cantillon senior to make a fortune if things
"turned the other way."
Esther Hughes, on the contrary, pleads that there
was a true partnership though Cantillon dominated it, that he entered into
large transactions which he claimed to be on his private account when they were
successful, notably a highly profitable purchase of copper for about 4 millions
of livres from John Colebrook in 1720. When there was a bad stroke of business,
such as an advance of £20,000 to Wm. Law, brother of John Law, which there seemed
to be no hope of recovering, he caused the amount to be entered in the account
of the partnership. Cantillon traverses these allegations and says that the
partnership still owed him over £10,000. Mrs Hughes asked for a writ ne
exeat regno to which Cantillon filed an answer (18 May 1724) that "for
some years last past, since he had resided in London, he had gone beyond sea,
whither his business or his inclination invited him and returned again to
London. Necessary business called him abroad in the spring of 1724, and he had
intended to take his wife with him to Naples and some other places in Italy...
and return again to London to reside." Cantillon deposited in court
sufficient security to meet the claim, and in 1726 (when the office of
Assistant Paymaster General of the Supreme Court was created) one of the
Masters in Chancery lodged with the Pay Office £3,450 in South Sea Bonds and
£209. 5s. 0d. cash (apparently accrued interest) in the suit of
Hughes v. Cantillon. Mrs Hughes found it difficult to press her suit,
her witnesses being abroad, and on the 27th October 1726 an amount of £300 cash
in respect of interest was paid out, on Cantillon's application, to his
Solicitors. On the death of Mrs Hughes her son and administrator John Hughes
kept the action alive until 1752 when the Countess of Stafford successfully
appealed for its dismissal.*32 £4,095 South Sea
Annuities and £1,838 cash were ordered to be paid out to her from the accumulated
fund. Cantillon appears therefore to have triumphed in the Courts over all his
opponents. The evidence in this suit gives the date of the Countess's birth as
October 1728.
In 1726 the family started upon its travels.
Cantillon wrote frequently to his friend Garvan, who quotes several letters but
refrains from putting others on the record as they "are so full of
scandal." The letters are dated from Nampon, near Abbeville, Paris (his
first visit to that city for nearly six years), Rotterdam, Brussels, and
Cologne in 1726, Verona, Chambéry, Geneva, and Paris in 1728, Paris in 1729,
1730 and 1731, Brussels, Paris and Utrecht 1733.
The registers of St Paul's, Covent Garden, have
been searched in vain for an entry relating to Cantillon, but the rate books of
the City of Westminster shew that after the middle of 1721 he occupied one of
four large houses forming the Piazza and continued to be so rated till 1729.
The rate books from 1730 to 1732 are missing, but he no longer appears in 1733.
His neighbours in the Piazza were the Earl of Orford, Sir Harry Ashurst and Mr
E. Gouge (? his friend Edmund Gough). The Piazza houses were destroyed and
replaced by the New Playhouse, or Covent Garden Theatre, which is rated in lieu
of them in 1735. His name does not appear in the rate book for Albemarle
Street. The house in which he died is rated to E. Cook, Esq., on 15 April 1734
and is marked "Empty" by the collector, probably after the fire. But
it seems clear that Cantillon had only recently entered into occupation of it
at the time of his death and that most of his servants were newly engaged.
On Monday, 13 May 1734, Cantillon was busy in
London with his friend Francis Garvan at his chambers in the Middle Temple and
others in the City. His coachman deposed that "he was out with his master
at the Temple and other places all Day, and particularly at a house in Queen
Square, Westminster, where he supp'd, and set him down at his own Door at 10 at
Night." His valet gave evidence that "he let his Master in last Night
about Eleven a clock who undrest himself in the Parlour as usual; took his
Candle and Book, and went up to Bed soon after; and told this Examinant he
would read." It was his usual practice to read for three hours or so in
bed. About half past three on Tuesday morning his house in Albemarle Street on
the east side between Viscount St John's and Mr Percival's was seen to be on
fire. Lady Penelope Compton, who lived "the other side of the way,"
writing on 14 May, says*33 "it burnt very
feirce two houses intirely down before they could get any water." There
were three menservants and two maids in the family but Cantillon was the only
victim, and it was soon evident that he had been murdered before the house was
set on fire. His body was burned to ashes. The Journals for 6 June 1734 say:
"Yesterday the refiners finished their search into the ashes of the late
Mr Cantillon's house, when no plate, money, or jewels had been found; an
undeniable circumstance of a robbery previous to the burning of the house. His
widow arrived here last night from Paris." She is said to be "near
her time." The servants were arrested and tried for murder at the Old
Bailey but acquitted after five hours' trial.*34 The assassin appears
to have been a Frenchman, one Joseph Denier, alias Lebane, who had been his
cook for eleven years but was dismissed about ten days before the murder. He is
said to have got into the house by a ladder at the back. He fled to Harwich, to
embark for Holland, and the packet not being ready to sail gave eight guineas
to a fisherman to carry him over, and so escaped capture.
Cantillon's Will dated 12 July 1732 was proved on
21 May 1735 by Francis Garvan his surviving executor.*35 It was not
witnessed, but on 21 January 1734/5 "appeared personally Marie Anne
Cantillon of the Parish of St Paul, Covent Garden, Widow, Henry Ffurnese of the
Parish of St George's Hanover Square Esquire, and Philip Cantillon of the
Parish of St Peter le Poer, London, Merchant, and severally made oath that they
well knew Richard Cantillon late of the Parish of St George's Hanover Square,
and had often seen him write and knew his handwriting and that the will and
signature were written by him." After providing for his wife he leaves
legacies and annuities to his niece Catherine, his brothers Thomas and Bernard,
his nephews Richard and Thomas, and his executors Francis Garvan and Joseph
Lord Viscount Micklethwait, the latter of whom predeceased him. The remainder
was left to his daughter Henrietta "...and that she shall be married in
England by the approbation and advice of my executors... and in default of her
or her issue the remainder to be divided between my nephews Richard and Thomas
Cantillon moitively."
That the will was not proved earlier was due to
the reluctance of Garvan to undertake its execution owing to the intricacy of
the affairs and pending lawsuits. He endeavoured to get letters of
administration with the will annexed granted to the widow. These efforts were
frustrated by the opposition of legatees and creditors and a private Act was
passed, 8 Geo. II, c. 10, empowering Garvan to settle outstanding demands upon
the estate without legal proceedings.*36 This however was not
the end. In 1736 our ambassador in Holland, the Rt Hon. Horatio Walpole,
"acquainted the Rt Hon. the Earl of Scarborough that the Governor or
Resident of Surinam had thence sent advice to Holland of several papers having
there been found relative to the affairs of Richard Cantillon and supposed to
have been carried thither by one of the Assassins and Robbers of the said
Richard Cantillon amongst which was described to be a codicillary or
testamentary disposition together with an inventory of all his effects."
Garvan feared this later will would render the Act of Parliament "a meer
nullity," so he refused to act further (see Bill of Henrietta Cantillon by
Philip Cantillon, her next friend, v. Francis Garvan). In this will
dated London, 11 April 1734, Wm. Sloper and Garvan were named executors. Both
renounced, and the will of 1732 was set aside and administration with the will
of 1734 annexed was granted on 6 July 1737*37 to the widow and her
second husband, the Honble Francis Bulkeley, a nephew of Lady Clare.
The will, parts of which are illegible in the
original, was quoted so far as possible in the Bill of Lord Stafford (Chancery
Proceedings 1714-50) filed in 1743. He had married Cantillon's daughter and on
her behalf prayed for an account from the Bulkeleys. The will mentions the same
legatees, substituting Win. Sloper for Lord Micklethwait, and leaves the widow
a house in France, "her native country." Some details are given of
Cantillon's fortune. He had large sums in the hands of bankers in London, Amsterdam,
Brussels, Vienna, and Cadiz, an estate at Pinchbeck in Lincolnshire, a house in
Paris, one at Asnières, an annuity of £1000 a year on the Barbados customs
revenue ("cost me £17,000"), "Panama Lacos £600," an Estate
in Louisiana, other annuities, and judgment debtors, among them Lady Carrington
£20,000 and Wm. Law (brother of John Law) £20,000. The inventory made by him in
1734 is said to be incomplete. It shews particular items amounting to £47,810
and 136,400 livres, probably a very small part of his fortune.
The Bulkeleys left the estate unadministered and
administration was granted to Lord Stafford in 1743; on his death to Henrietta,
his widow in 1751; on her death to Robert Maxwell, Lord Farnham, her second
husband, on 9 December 1761; and to their daughter Lady Henrietta Daly (née
Maxwell), Cantillon's granddaughter, on 8 December 1783.
Jean-Baptiste Say
"Alas, how many have been
persecuted for the wrong of having been right."
Is picked up from http://www.acton.org/research/libtrad/say.html
Jean-Baptiste
Say was inspired to write his Treatise on Political Economy
when, working at a life insurance office, he read a copy of Adam Smith’s Wealth
of Nations. His Treatise, often described as a popularization of
Smith’s ideas, departed from the typical economics methodology of his day. This
departure was based on Say’s conviction that the study of economics should
start not with abstract mathematical and statistical analyses but with the real
experience of the human person. Such a humanistic stress resulted in Say’s
emphasis on the role of the entrepreneur in an economy. In fact, this emphasis
was Say’s primary contribution to the field of economics.
Say was certain that the entrepreneur was
“necessary for the setting in motion of every class of industry whatever; that
is to say, the application of acquired knowledge to the creation of a product
for human consumption.” Some provide land; others, capital; still others,
labor. But only the entrepreneur—or the “master-agent,” as Say sometimes
described him—can combine these factors to bring to market products that meet
human needs and wants. Further, an entrepreneur “requires a combination of
moral qualities,” such as “judgement, perseverance, and a knowledge of the
world, as well as of business.” He must be a forecaster, project appraiser, and
risk-taker. Finally, “in the course of such complex operations, there are
abundance of obstacles to be surmounted, of anxieties to be repressed, of
misfortunes to be repaired, and of expedients to be devised.” In short, the
entrepreneur is the rare yet indispensable individual who actually makes the
economy work.
While popular abroad, Say’s Treatise brought
put him into conflict with Napoleon, who was furious at Say’s refusal to tone
down his criticism of France’s disastrous fiscal policies. This run in with the
French dictator soon forced Say to put his theory into practice. He was removed
from the French government, and his book was suppressed. Undaunted, Say used the
latest English technology to establish a cotton spinning plant, which became
quite profitable for the ten years he owned it. Meanwhile, Say and his Treatise
came to the attention of Thomas Jefferson and James Madison. Madison thought it
the best book ever written about economics; Jefferson courted Say to be a
professor of political economy at the new University of Virginia. It was not
until 1814, with Napoleon exiled, that Say’s Treatise came back into
print in France. Say himself was finally appointed to a professorship in
economics, first at the Athénée, then at the Conservatoire des Arts et Metiers,
and finally at the College de France, where he occupied France’s first chair in
political economy.
Adam Smith
Readings on Adam Smith’s life can be found on http://www.bized.ac.uk/virtual/economy/library/economists/smith.htm
David Ricardo
Readings on David Ricardo’s life can be found on http://cepa.newschool.edu/het/profiles/ricardo.htm
John Stuart Mill
Readings on John Stuart Mill’s life can be found on http://www.utm.edu/research/iep/m/milljs.htm
Carl Menger
Readings on John Stuart Mill’s life can be found on http://mason.gmu.edu/~tlidderd/menger/
Alfred Marshall
British
economist, one of the founders of English neoclassical economics. The first
principal of Univ. College, Bristol (1877-81) and a professor at Cambridge
Univ. (1885-1908), he reexamined and extended the ideas of classical economists
such as A. Smith and D. Ricardo. His best-known work, Principles of Economics
(1890), introduced several influential economic concepts, incl. elasticity of
demand, consumer's surplus, and the representative firm. His writings on the
theory of value proposed time as a factor in analysis and reconciled the
classical cost-of-production principle with the theory of marginal utility. See
also classical economics.
Max Webber’s “The Protestant Ethic and the Spirit
of Capitalism”,
A generation ago, Max Webber, the eminent
sociologist, wrote in his book The Protestant Ethic and the Spirit of
Capitalism:
With the progress of science and
technology, man has stopped believing in magic powers, in spirits and demons;
he has lost his sense of prophecy and, above all, his sense of the sacred.
Reality has become dreary, flat and utilitarian, leaving a great void in the
souls of men which they seek to fill by furious activity and through various
devices and substitutes.
As early as in the beginning of
the 20th century, Max Webber, who was one of the first to study
entrepreneurship, tried to understand what motivates an entrepreneur. In his
book "The Protestant Ethics and the Spirit of Capitalism" he made an
interesting conclusion. Aspiration to profit, professional duty, great
responsibility before one's pursuit – these are the real motives of business
activity. "If you ask these people (outstanding German entrepreneurs)
about the goal of their inextinguishable profit-seeking, the fruits of which
they will never use, they will simply say that business itself with its never
ending demands has become for them "the necessary condition of their
existence", he wrote.
The Protestant Ethic
Weber's concern
with the meaning that people give to their actions allowed him to understand
the drift of historical change. He believed that rational action within a
system of rational-legal authority is at the heart of modern society. His
sociology was first and foremost an attempt to explore and explain this shift
from traditional to rational action.
Weber believed
that the rationalization of action could only be realized when traditional ways
of life are abandoned. Modern people often have a difficult time realizing
the hold of tradition on pre-industrial people. Tradition was overpowering in
pre-modern societies. Weber's task was to uncover the forces in the West
that caused people to abandon their traditional religious value orientation and
encouraged them to develop a desire for acquiring goods and wealth.
After a careful
study, Weber came to the belief that the protestant ethic broke the hold of
tradition while it encouraged men to apply themselves rationally to their
work. Calvinism, he found, had developed a set of beliefs around
the concept of predestination. It was believed by followers of Calvin
that one could not do good works or perform acts of faith to assure your place
in heaven. You were either among the "elect" (in which case you were
in) or you were not. However, wealth was taken as a sign (by you and your
neighbors) that you were one of the God's elect, thereby providing
encouragement for people to acquire wealth. The protestant ethic therefore
provided religious sanctions that fostered a spirit of rigorous discipline,
encouraging men to apply themselves rationally to acquire wealth.
Weber studied
non-Western cultures as well. He found that several of these
pre-industrial societies had the technological infrastructure and other
necessary preconditions to begin capitalism and economic expansion. The
only force missing were the positive sanctions to abandon traditional ways.
While Weber does not believe that the protestant ethic was the only cause
of the rise of capitalism, he believed it to be a powerful force in fostering
its emergence.
Karl Marx
German
political theorist and revolutionary. He studied humanities at the Univ. of
Bonn (1835) and law and philosophy at the Univ. of Berlin (1836-41), where he
was exposed to the works of G. W. F. Hegel. Working as a writer in Cologne and
Paris (1842-45), he became active in leftist politics. In Paris he met F.
Engels, who would become his lifelong collaborator. Expelled from France in
1845, he moved to Brussels, where his political orientation matured and he and
Engels made names for themselves through their writings. Marx was invited to
join a secret left-wing group in London, for which he and Engels wrote the
Communist Manifesto (1848). That same year he organized the first Rhineland
Democratic Congress in Germany and opposed the king of Prussia when he
dissolved the Prussian Assembly. Exiled, he moved to London in 1849, where he
would live the rest of his life. For years his family lived in poverty, and two
of his children died. He worked part-time as a European correspondent for the
New York Tribune (1851-62) while writing his major critique of capitalism, Das
Kapital (3 vols., 1867-94). He was a leading figure in the First International
from 1864 until the defection of M. Bakunin in 1872. See also communism,
dialectical materialism, Marxism.
Also see
Joseph
Schumpeter
Joseph Schumpeter (1883-1950) viewed capitalism
as a dynamic engine of progress. In his view, mature economic systems find a
regular and stable routine of supply, demand, and exchange; Schumpeter called
this the “circular flow”. Entrepreneurs interrupt this circular flow with new
ideas and visions about the economic future, recombining existing resources to
create new and more valuable products and services. Schumpeter saw the freedom
of innovation and exchange as the foundation of material progress in capitalist
economies.
Schumpeter
called capitalism a process of “creative destruction” because it
overthrows old routines and methods of production. But he recognized that this
process is unstable, and therefore unsettling, for those who have become
accustomed to established ways. Schumpeter predicted growing political opposition
to capitalism and a corresponding growth in socialism, in the 20th century.
http://transcriptions.english.ucsb.edu/archive/courses/liu/english25/materials/schumpeter.html
for Creative Destruction
David McClelland’s Achievement Motivation
theory
It
may seem obvious that people who accomplish things have a drive for
accomplishment, but it's not that straightforward. In the 1930s, Harvard
psychologist David McClelland described three needs (okay, besides sex,
shelter, and chocolate) that drove human behavior: power, accomplishment, and
affiliation. Power seekers want to make decisions others have to obey.
Affiliators crave companionship. Achievers are intent on accomplishing
something. The achievers don't seek "some intangible conceptual
objective," says Roberts. "They're not devising brilliant ideas that
only other brilliant people like themselves recognize. They want to create
something significant and tangible--a building, a bridge, a company."
It's
not clear whether the achievement urge is hard-wired before birth, but it seems
to emerge early. McClelland played games with kindergarten children, having
them toss rings onto an upright post. It is difficult, and most kids wound up
standing over the post, dropping the rings straight down. Another group,
content to rely on luck, flung the rings from across the room. A handful of
children stood a foot away from the post, tossed until they made it, then
stepped back to try again, and so forth. These kids turned out to be the
achievers, eager to test themselves to see what they could accomplish. Says
Roberts: "Achievers don't want to do something if it isn't a challenge,
and they aren't interested in winning through luck, like the children who threw
the ring from far away."
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