Physiocracy
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Physiocracy (French: physiocratie; from the
The physiocrats made a significant contribution in their emphasis on productive work as the source of national wealth. This contrasted with earlier schools, in particular
Quesnay was likely influenced by his medical training, particularly by the work of William Harvey who explained how blood flow and the circulatory system is vital to the human body; Quesnay held that the circulation of wealth was vital to the economy. Societies at the time were also overwhelmingly agrarian. This may be why they viewed agriculture as the primary source of a nation's wealth. This is an idea which Quesnay purported to demonstrate with data, comparing a workshop to a farm. He analyzed "how money flowed between the three classes of farmers, proprietors, and artisans, in the same mechanical way that blood flows between different organs" and claimed only the farm produced a surplus that added to the nation's wealth. Physiocrats viewed the production of
"The physiocrats damned cities for their artificiality and praised more
Precursors
Physiocracy is an
Other inspiration came from
History
The growing power of the centralized state control in the era of enlightened absolutism necessitated centralized, systematic information on the nation. A major innovation was the collection, use and interpretation of numerical and statistical data, ranging from trade statistics, harvest reports, and death notices to population censuses. Starting in the 1760s, officials in France and Germany began increasingly to rely on quantitative data for systematic planning, especially regarding long-term economic growth. It combined the utilitarian agenda of "enlightened absolutism" with the new ideas being developed in economics. In Germany the trend was especially strong in Cameralism while in France it was an important theme in physiocracy.[11]
Pierre Le Pesant, sieur de Boisguilbert served as a member of Louis XIV's local administration of Paris, and wrote pamphlets and booklets on subjects related to his work: taxation, grain trade, and money. Le Pesant asserted that wealth came from self-interest and markets were connected by money flows (i.e. an expense for the buyer is revenue for the producer). Thus he realized that lowering prices in times of shortage – common at the time – was dangerous economically as it acted as a disincentive to production. Generally, Le Pesant advocated less government interference in the grain market, as any such interference would generate "anticipations" which would prevent the policy from working.[12]
For instance, if the government bought corn abroad, some people would speculate that there was likely to be a shortage and would buy more corn, leading to higher prices and more of a shortage. This was an early example of advocacy of free trade. In anonymously published tracts,
The event that led Mirabeau to devote himself to political economy was undoubtedly his work on a manuscript of Richard Cantillon's Essai sur la nature du commerce en général, which he had in his possession as early as 1740.[13] He elaborated a commentary of this text that gradually became his Ami des hommes.[14]
Around the time of the
Also,
Tableau économique
The Tableau économique or Economic Table is an economic model first described by François Quesnay in 1759, which laid the foundation of the physiocrats’ economic theories.[15] It also contains the origins of modern ideas on the circulation of wealth and the nature of interrelationships in the economy.[5]
The model Quesnay created consisted of three economic agents: the "proprietary" class consisted only of landowners; the "productive" class consisted of agricultural laborers; the "sterile" class was made up of artisans and merchants. The flow of production and cash between the three classes originated with the proprietary class because they owned the land and bought from both of the other classes.
Characteristics
Natural order
This article's factual accuracy is disputed. (November 2019) |
The physiocrats thought there was a "natural order" that allowed human beings to live together. Men did not come together via a somewhat arbitrary "social contract." Rather, they had to discover the laws of the natural order that would allow individuals to live in society without losing significant freedoms.[16] This concept of natural order had originated in China. The Chinese had believed that there can be good government only when a perfect harmony exists between the "Way of Man" (governmental institutions) and the "Way of Nature" (Quesnay's natural order).[7]
Individualism and laissez-faire
The physiocrats, especially Turgot, believed that self-interest was the motivation for each segment of the economy to play its role. Each individual is best suited to determine what goods they want and what work would provide them with what they want out of life. While a person might labor for the benefit of others, they will work harder for their own benefit; however, each person's needs are being supplied by many other people. The system works best when there is a complementary relationship between one person's needs and another person's desires, and so trade restrictions place an unnatural barrier to achieving one's goals. Laissez-faire was popularized by physiocrat
Private property
None of the theories concerning the value of land could work without strong legal support for the ownership of private property. Combined with the strong sense of individualism, private property becomes a critical component of the Tableau's functioning. The physiocrats believed in the institution of private property. They saw property as a tree and its branches, as social institutions. They actually stated that landlords must enjoy 2/5 on the land surpluses. They also advocated that landlords should be given dues, otherwise they would take the land away from the cultivators.
Diminishing returns
Turgot was one of the first to recognize that "successive applications of the variable input will cause the product to grow, first at an increasing rate, later at a diminishing rate until it reaches a maximum."[15] This was a recognition that the productivity gains required to increase national wealth had an ultimate limit, and, therefore, wealth could not be infinite.
Investment capital
Both Quesnay and
Subsequent developments
The ideas of the Physiocrats had an influence on
The New Physiocratic League is a current
See also
- Agrarianism
- Classical economics
- Classical liberalism
- Flour War
- Free market
- French Liberal School
- Geolibertarianism
- Georgism
- Jeffersonian democracy
- Land value tax
People
- Richard Cantillon
- François Quesnay
- Anne Robert Jacques Turgot
- Jean Claude Marie Vincent de Gournay
- Victor de Riqueti, marquis de Mirabeau
- Honoré Gabriel Riqueti, comte de Mirabeau
- Pierre Samuel du Pont de Nemours
- Pierre-Paul Lemercier de La Rivière de Saint-Médard
- Nicolas Baudeau
- Henry George
- Mykola Rudenko
Notes
- ^ "physiocrat". Oxford Dictionaries. Oxford University Press. Archived from the original on July 4, 2014. Retrieved 27 October 2013.
- ^ a b c d Steiner (2003), pp. 61–62
- ^ a b c d Karl Marx and Frederick Engels (1988), pp. 348, 355, 358.
- ^ Why Americans Value Rural Life by David B. Danbom
- ^ a b The Penguin Dictionary of Economics, George Bannock, R. E. Baxter and Evan Davis. 5th Edition. Penguin Books 1992 p. 329.
- ^ Byrd (1995), 34
- ^ a b c Derk Bodde (2005), Chinese Ideas in the West p.6, Reprinted with permission in China: A Teaching Workbook, Asia for Educators, Columbia University
- ^ Maverick, Lewis A. (1938). "Chinese Influences Upon the Physiocrats". Economic History 3.
- ^ ISBN 978-1845203740.
- ISBN 978-0415133760.
- ^ Lars Behrisch, "Statistics and Politics in the 18th Century." Historical Social Research/Historische Sozialforschung (2016) 41#2: 238–257. online
- ^ Steiner (2003), p. 61
- S2CID 219747599.
- ^ "Correspondance Mirabeau – Sacconay (1731–1787)". Lumières.Lausanne. Archived from the original on 2020-05-31.
- ^ a b c Henry William Spiegel (1983) The Growth of Economic Thought, Revised and Expanded Edition, Duke University Press. pp. 189, 195–96
- ^ Rist, Charles; Gide, Charles (1915). A history of economic doctrines from the time of the physiocrats to the present day. D.C. Heath and Company.
- ^ Bertholet, Auguste (2021). "Constant, Sismondi et la Pologne". Annales Benjamin Constant. 46: 78–81.
- ^ "Economic Reform Platform | New Physiocrats". New Physiocrats. Retrieved 2018-03-05.
References
- US Government Printing OfficeSenate Document 103–23.
- Charbit, Yves; Institut National d'Études Démographiques
- "Theories of Surplus Value" from the Economic Manuscripts of 1861–1863" contained in Collected Works of Karl Marx and Frederick Engels: Volume 30, New York: International Publishers, 1988.
- Gide, Charles and Charles Rist,A History of Economic doctrine from the time of the Physiocrats to the present day. 1915
- Muller, A. L. (1978) Quesnay's Theory of Growth: A Comment, Oxford Economic Papers, New Series, Vol. 30, No. 1., pp. 150–156.
- ISBN 978-1412965804.
- Spiegel, Henry William (1983), The Growth of Economic Thought, Revised and Expanded Edition, Duke University Press[ISBN missing]
- Steiner, Phillippe (2003) "Physiocracy and French Pre-Classical Political Economy", Chapter 5. in eds. Biddle, Jeff E, Davis, Jon B, & Blackwell Publishing, 2003.
- The History of Economic Thought Website, The New School of Social Research. 6 Feb. 2006
- Tableau Économique – Modern view
- Vinje, Victor Condorcet: Economics as if Soil and Health Matters(Nisus Publications, 2017) [ISBN missing]
External links
- The Physiocrats – In Our Time – BBC Radio 4, 2013