histofthought1

The founding father ofmodern economics: Richard Cantillon 353Cantillon engaged in a sophisticated analysis of the determinants of populationgrowth. Natural resources, cultural factors, and the state of technologyhe diagnosed as particularly important. He saw prophetically that the colonizationof North America would not be a simple displacement of one peopleby another, but that new agricultural technology would support a far largerpopulation per acre of land. Hence the extent to which existing resources,land and labour, can be utilized depends on the existing state of technology.Thus pre-colonial North America was not 'overpopulated' by Indians, assome had believed; instead, the Indian population level had adjusted to thegiven resources and technology available. In short, Cantillon foreshadowedthe modern theory of 'optimum' population, in which the size of populationtends to adjust to the most productive level given the resources and technologyavailable.While Cantillon described a pre-Malthusian alleged tendency of humanbeings to multiply like 'rats in a barn', without limit, he also recognized thatreligious and cultural values can modify such tendencies. An increase in thedemand for agricultural products that are land-intensive would tend to reducethe demand for agricultural labour and eventually cause a fall in the supply ofsuch labour and hence of the population as a whole. (Cantillon, it must beremembered, was writing in an age when the overwhelming bulk of thepopulation was engaged in agriculture.) An increase in the demand for labour-intensivefarm products, on the other hand, would bring about an increasein the demand for labour and hence of the population. Living, onceagain, in a country and an era of large feudal landed estates, Cantillonobserved that it was the tastes of the proprietary classes that determined theconsumer tastes and values of society, and hence the demand for products.It should be noted that in an unusually sophisticated way, Cantillon pointedout that it was outside the scope of economic analysis to decide whether it isbetter to have a large population of poorer people or a smaller population ofpeople who enjoy a higher standard of living: that must be for the values ofthe citizenry to decide.Professor Tarascio points out that Cantillon's population analysis was farmore subtle and modern than that of Smith, Ricardo, or Malthus. Rather thanworry about a future unchecked population explosion, Cantillon's theoreticalframework accounted for the current cultural change to smaller families inindustrialized countries, as well as the likelihood that population will adjustitself downward to any future depletion of resources. Cantillon pointed out,for example, that as ancient civilizations declined, their population size declinedalong with them. The number of inhabitants of the Roman state inItaly, for example, declined from 25 million to about 6 million over a periodof 17 centuries.