A Discussion of Richard Cantillon

The central idea of motivational force in Cantillon's market theory is that inhabitants of the economy are bound together by mutual dependence, such that the institutions of the market place evolve over time in responses to needs and necessity. Along the same lines, Cantillon worked to prove that self-interest was the motivational force providing the evolution in the market place. In his theories of adjustment of the market, Cantillon described how disparate plans tend to drive prices away from costs. This means that riskier plans devised by entrepreneurs contain much higher costs in order to take on such a venture, thereby raising the intrinsic value of the good or service to be offered. Overall, Cantillon's studies of markets and the relationship between individuals and prices in the market place are good observations of the basic interactions involved that cause an economy to function.
             Another of Cantillon's most prominent studies dealt with the competition and the role of entrepreneurs in the market. However, it is initially worthy to note that Cantillon's definitions of both competition and an entrepreneur vary in context from the modern definitions commonly presented of such individuals. Cantillon classified competition as a process between the entrepreneurs vying for the same consumers, where as the modern definition is one in which conditions define the specific market structure and allow for multiple firms to contend for business of individual entities. In addition, the definition devised by Cantillon for an entrepreneur is basically any individual who carries on his transactions under uncertainty, where as in modern economics the entrepreneur is commonly identified as the individual in a firm who best organizes thoughts, resources, and activities of the business in general. In Cantillon's studies of competition and entrepreneurs he identified the entrepreneur as the source that bears the risk and competition as the process that creates such risk.