Richard Cantillon: The Most Important Economist You (Probably) Never Heard Of Richard Cantillon’s contributions to economics are found in his major work, "Essai sur la Nature du Commerce en General" (Essay on the Nature of Commerce in General). by Jp Cortez

ichard Cantillon is the most important economist you’ve never heard of.

Born in Ireland sometime in the mid- to late-1600s, Richard Cantillon’s contributions to economics are found in his major work, "Essai sur la Nature du Commerce en General" (Essay on the Nature of Commerce in General).

In 1734, Cantillon was mysteriously murdered by a disgruntled former employee, and his home was set ablaze. Essai, which survived the fire, was published in 1755.

Cantillon’s work went on to influence Adam Smith and other well-known economists.

Cantillon’s work went on to influence Adam Smith and other well-known economists. Essai included his observations on production and consumption, money and interest, international trade and business cycles, and inflation.

We have a basic understanding of inflation and its effects. Put simply, inflation is an increase in the money supply.

An increase in the supply of money that isn’t met with an increase in the demand for money necessarily leads to price inflation, ceteris paribus. Said another way, prices rise as new money is introduced, all other things being equal.

However, this cursory understanding of inflation only paints half the picture. A less discussed aspect of this process is not only that the monetary supply has increased, but how. The entry point of new money into the economy has profound implications.

In a central-bank economy, the entry point of money is via large commercial banks. Unelected bureaucrats, bankers, and other members of the deep state are the first to enjoy this “new money.”

The effects of inflation are not uniform throughout the economy.

Cantillon writes, “I conclude … that by doubling the quantity of money in a state, the prices of products and merchandise are not always doubled. The river, which runs and winds about in its bed, will not flow with double the speed when the amount of water is doubled.” Monetary inflation does not affect prices proportionally orsimultaneously, to the benefit of some and to the detriment of others.

In a central-bank economy, the entry point of money is via large commercial banks. Unelected bureaucrats, bankers, and other members of the deep state are the first to enjoy this “new money.”

In the early stages of the proliferation of new money into the economy, prices have not yet adjusted to the increase in the money supply. Those at the top of the monetary monopoly receive and spend this new money at low prices.

Many politicians today champion “fixing” income inequality and wealth disparity. To fix these problems we should revisit the work of Richard Cantillon and examine the systemic shortcomings of a financial system that serves to benefit the wealthy at the expense of the poor.

And then the other shoe falls.

By the time new money reaches the average consumer, prices have risen to reflect the increase in monetary supply. Those who don’t receive new money until later in the process can do little more than watch the purchasing power of their Federal Reserve Notes (i.e. dollars) inflate away.

Many politicians today champion “fixing” income inequality and wealth disparity. To fix these problems we should revisit the work of Richard Cantillon and examine the systemic shortcomings of a financial system that serves to benefit the wealthy at the expense of the poor.

Politicians hoping to help the common man should support ending the elites’ monetary monopoly and the disastrous effects of their printing of fake money.