Hayek on Cantillon Effect

Posted on Thursday, March 12, 2009 at 12:32 am

fa-hayek.jpgF. A. Hayek: The effect we are discussing is rather similar to that which appears when we pour a viscous liquid, such as honey, into a vessel. There will, of course, be a tendency for it to spread to an even surface. But if the stream hits the surface at one point, a little mound will form there from which the additional matter will slowly spread outward. Even after we have stopped pouring in more, it will take some time until the even surface will be fully restored. See here.