Richard Cantillon and public policy

Abstract

PurposeRichard Cantillon (168?–173?) is known as the first economic theorist and the founder of entrepreneurship theory. Few would describe him as engaged in policy issues, but he did write about policy issues of interest to scholars interested in entrepreneurship and economic development. He has long been classified as a mercantilist of a bygone day, even as many believe he was resolute in not commenting on policy matters at all. His views could be a key to pursuing the policy goals of entrepreneurship scholars.Design/methodology/approachThe authors look at several topics in Cantillon's Essay on the Nature of Commerce in General (1755), read in its historical/political context, to better understand Cantillon's views. The authors then relate Cantillon's views to recent interventions in the economy.FindingsThe authors found that Cantillon held clearly antimercantilist, or free market, views. The authors also recognize that his views, given his status as the founder of entrepreneurship theory, can contribute to modern economics. As in Cantillon's day, institutional uncertainty has negative economic consequences and often leads to unproductive entrepreneurship, which is only made worse by the increased complexity of the modern economy.Originality/valueThe authors clarify Cantillon's views against modern-day interpretations and offer a clearer understanding of Cantillon's writings in the context of his Essay on the Nature of Commerce in General (1755). The authors also show the importance of the proper role of institutions for productive entrepreneurship—and the danger of unproductive or destructive entrepreneurship when such institutions do not have policies favorable to entrepreneurship.