Have you ever noticed that the rich are constantly getting richer, no matter the circumstances? How are they doing this exactly? Well, it appears the main reason for the rich getting richer is a phenomenon known as the Cantillon effect, which basically states that money printing will benefit certain parts of the economy more than others. In fact, it will give some people more purchasing power at the expense of others in the economy.
In this article, we will delve into the Cantillon effect and explore how it contributes to wealth inequality. We will discuss the mechanics of this phenomenon, its implications for society, and most importantly, provide insights into what you can do to protect yourself from its effects.
Introduction to Richard Cantillon and the Cantillon Effect
The term Cantillon effect is named after the Irish-French economist and banker Richard Cantillon. His book “Essay on the Nature of Trade in General” (Essai sur la Nature du Commerce en Général), published in 1755, is considered the first complete treatise on economy. It describes many economic concepts, including monetary theories, cause and effect methodology, monetary theories, and the development of spatial economics. In this essay, Cantillon emphasized the pivotal role played by entrepreneurs in driving economic activity. These entrepreneurs are described as a diverse group encompassing traders, innovators, and merchants who are willing to undertake risks in pursuit of profit. The central theme underscores their significance as risk-takers who actively contribute to economic growth and development.