Author of the "Essay on the Nature of Trade in General" (written around 1730, published in 1755), Richard Cantillon is regarded as one of the pioneers of modern economic science. In his History of Economic Thought, economist Murray Rothbard even refers to Cantillon as the founder of modern economics.

Born in Ireland, Richard Cantillon settled in Paris as a young man and acquired French nationality. He worked as a banker and made a fortune during the John Law era.

It was also on this occasion that he began to study economic theory. Around 1730, Cantillon composed his Essay on the Nature of Commerce in General.

This book can be seen as one of the first attempts at creating a general theory of economics. Cantillon is careful to identify what he calls "general laws of the economy", those which are in the nature of things, and not in the particular facts of this or that country. This approach was revolutionary.

We can summarize the great merits of Cantillon's Essay in five areas: the theory of wealth, the notion of the entrepreneur, the critique of worthless currencies, the "Cantillon Effects", and finally the defense of freedom.

First, his theory of wealth. Unlike the mercantilist view dominant at the time, Cantillon based his analysis on the recognition that wealth is formed by the products that are proper to the enjoyment of man. This wealth, he argued, comes from nature and is produced through human labor. His ideas on the nature of wealth had a strong influence on Beccaria and Adam Smith, and, through Smith, on the entire English classical school of thought.

Second, the entrepreneur. Although he didn't define it clearly, Cantillon viewed the entrepreneur as a main and central player in economic activity. For Cantillon, what characterizes the entrepreneur is that he takes on risk and acts in uncertainty. These ideas would later be expanded by Turgot and, more significantly, by Say, to finally recognize the entrepreneur's special place in the economy, contrary this time to the assertions of the English school.

Third point, currency. In reaction to the John Law experience, Cantillon explains what happens or must happen when currency has no real value.

He sees two main consequences of substituting a currency without real value like paper money for a metallic one. The first consequence is what he calls "popular rejection", which means a growing distrust of worthless money. The second consequence is inflation: monetary weakening makes goods more expensive.

Fourth, in his analysis of inflation, Cantillon went further than his contemporaries. Having observed the collapse of Law's system, Cantillon realized that monetary inflation doesn't affect everyone equally. On the contrary, it enriches some while impoverishing others. He concluded that inflation has redistributive effect: those who receive newly issued money first benefit from increased purchasing power, while those who receive it later become poorer as a result of the new money being issued due to the rise of inflation rates.

Fifth, despite a few remnants of mercantilist thought, Cantillon's overall perspective was fully liberal.He defended private property as a fundamental pillar of civilization, arguing that no society can function without private ownership of land and the products of labor. He also saw material inequality between people as natural and legitimate. According to Cantillon, there's nothing wrong with an efficient and courageous worker, or an exceptionally gifted one earning more than someone who is incompetent or lazy. Finally, Cantillon believed that prices should always be determined freely, by the play of supply and demand, without intervention by public authorities.

Among these five major ideas in his Essay, the most important is undoubtedly the one that now bears his name: the Cantillon Effect. With this theory about the effects of inflation, Cantillon provides us with answers to a number of contemporary ills. It helps us understand the consequences of recent expansionary and inflationary monetary policies, which have impoverished the middle class and rural world, while enriching financial market operators and the State, its agencies and its officials, due to their joint proximity to the source of the new issue: central banks and commercial banks.