Cantillon's "Land Theory of Value"

Economic Systems
Schools of Economic Thought
General Equilibrium

Article

General equilibrium theory, indeed much of economics itself, owes its existence to an Irishman who lived obscurely in 18th Century France by the name of Richard Cantillon. In his remarkable Essai sur la Nature du Commerce en Generale (published only in 1755, but written c.1732-1734), Cantillon sets out, perhaps for the first time, the vision of an "economy" as a set of interacting markets connected by a price system with balanced circular flows of income between agents. Cantillon's setting was the first great breakthrough in economic theory - for it provided the fundamental structural idea behind the concept of an "economy" which was to possess all subsequent economics - Physiocratic, Classical and Neoclassical.