Thursday, June 08, 2006

Two Languages Separated by Different Meanings to Borrowed Words

There is a mini-debate, livel in parts, but also educational, over on blog on the merits of Cantillon and Murray Rothbard's treatment of him as the 'father' of economics (with sly digs as usual from Rothbard's writings against Adam Smith, as if this 'father', 'high priest' nonsense had any merit). Ignore the dross; go for the ideas.

What is much more interesting is the discussion of Cantillon's economics Essai (1734) in the comments to a review, worthwhile reading in full (the Essai, as well as the review and the comments).

I have made two comments. Here is my second:

'One can find traces of future ideas that were developed years after in almost any 18th-century text or pamphlet on aspects of political economy, including Wealth of Nations. I think some people are clutching at straws to show Cantillon was 'better' than Smith, or vice versa. It is a pointless debate, not subject to resolution.

Cantillon had a distinction between 'intrinsic price or value' (‘le prix ou la valeur intrinseque’) and 'market' price (le prix du marché) in the Essai (Part 1: Chapter 10) and Smith distinguished between ‘Natural Price’ and ‘Market Price’ in Wealth of Nations (Book 1: chapter VII). Both of them stated cost of production as a determinant of price (‘la mesure de la terre du travail qui entre dans sa production’)and both recognised, as they must if they went to their local markets, that prices varied as demand and supply varied. To criticise Smith for having a labour theory of value and thereby make him responsible for Marxism and the horrors that followed (as Rothbard verges upon) is nonsense, and becomes even more dubious when Cantillon is exonerated because close reading of his words (English or French?) uncovers supposed proto-utility thinking.

Secondly, the French word ‘entrepreneur’ has a slightly different meaning than it has gained from English speaking economics. You can witness this in France. Many times my rural French neighbours speak of so-and-so as ‘l’entrepreneur’ in answer to a question as to what he does. By this they often means he runs a small lorry business, etc., but they do not mean that he or she is entrepreneurial in the sense I suspect we are talking about here, but that (in English) he is a ‘contractor’. Smith used the English word ‘projector’ when referring to what we, in English, mean by the adoption of the French word, ‘entrepreneur’. There may be a little language confusion on debates that use entrepreneur meaning one thing in French and another in English (of which English speakers in the US and Britain sometimes do with different meanings to the same word ostensibly from the same language!).

Neo-classical economics removed people from their equations, including 'entrepreneurial' (English meaning) activity. Crediting Cantillon with the discovery of the entrepreneur in business when he simply meant what French people mean by the word, namely ‘contractors’, not what 21st-century economists mean, is disingenuous.'

I recommend blog, whatever your views on Austrian economics and its critique (sometimes bad tempered) of neo-classical economics. They publish some interesting and original material on the history of economics, well worth noting, even downloading.


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