Chapter Nine

The Number of Laborers, Artisans, and Others, Who Work in a State, is Naturally Proportioned to the Demand for Them

Abstract: The supply of workers adjusts itself to the demand for labor, across all professions, via wage rates, migration, and changes in population. Prosperity cannot be created by subsidizing job training.

Chapter Ten

The Price and Intrinsic Value of a Thing, in General, is the Measurement of the Land and Labor, which enter into its Production

Abstract: Intrinsic value can be measured by the quantity of land and laborers, taking into account the quality of land and labor. Some goods are produced almost entirely with land, others solely from labor. In the garden example, intrinsic value is both the direct expenses of the garden and the foregone value of land. Intrinsic value of a choice never changes, but market prices vary according to demand.

Chapter Eleven

The Par Value or Ratio between the Value of Land and Labor

Abstract: William Petty set off the search for a par value between land and labor. Cantillon provides a theoretical answer (referenced in Adam Smith’s Wealth of Nations) that property owners must provide their labor with the production of at least twice the land necessary to sustain the worker in order that enough children are raised to maintain the workforce over time. The amount of land will actually vary from job to job, person to person, and among different countries and societies.

Chapter Twelve

All Classes and Individuals in a State Subsist or Grow Rich at the Expense of the Property Owners

Abstract: Cantillon develops a circular-flow model of the economy that shows the distribution of farm production between property owners, farmers, and workers. Farm production is exchanged for the goods and services produced in the cities by entrepreneurs and artisans.

Chapter Thirteen

The Circulation and Exchange of Goods and Merchandise, as well as their Production, are Carried On in Europe by Entrepreneurs, and at a Risk

Abstract: Here Cantillon introduces, for the first time, the theory of entrepreneurship. Entrepreneurs are the prime directors of resources. Their occupations come with risks due to uncertainty, especially from competition and changing tastes. As a result, their income can be very large, but they also face the prospect of bankruptcy.

Chapter Fourteen

The Desires, Fashions, and Ways of Life of the Prince, and especially of the Property Owners, Determinethe Use to which Land is put in a State, and Cause the Variations in the Market Prices of all Things

Abstract: Cantillon constructs a model of the isolated estate or closed economy where the choices of property owners determine outputs and prices, regardless if they manage the isolated estate or lease it to farmers.

Chapter Fifteen

The Increase and Decrease of the Number of People in a State chiefly Depends on the Taste, the Fashions, and the Ways of Life of the Property Owners

Abstract: Population is based on the tastes and choices of property owners. Early versions of the Malthusian approach to population growth—that it follows some mathematical formula—are criticized.

Chapter Sixteen

The more Labor there is in a State, the more the State is Judged Naturally Rich

Abstract: The wealth of a nation depends on putting the labor force to work. Those who are unnecessary for farming can be employed in making higher quality products and manufactured goods, particularly durable goods made from metal. Saving is the key determinant of wealth and gold is a particularly useful form of savings because it can purchase all things, even in time of war.

Chapter Seventeen

Metals and Money, and especially of Gold and Silver

Abstract: Gold and silver were highly valued before they were used as money. They hold many advantages over other goods such as durability, divisibility, transportability, and homogeneity. These are the reasons which led gold, silver, and copper to be chosen as money, not “fancy” or common consent. When princes debase money or issue imaginary money, they hurt the economy.

PART TWO

Money and Interest