PHYSIOCRACY: ORIGIN, CHARACTERISTICS AND REPRESENTATIVES - ECONOMY - 2025

The physiocracy or physiocratic school was an economic theory that affirmed that the rules of the economy were given by the laws of nature, and that the land was the only source of wealth by which a country could develop. For this reason, the Physiocratic school defended a development of France through the exploitation of agriculture.

This school is known as the forerunner of economic sciences, since they were the first to generate a theory from observing economic phenomena, which until now had only been discussed in a purely philosophical way.

Origin

The Physiocratic school originated in France during the 18th century, in response to the interventionist theory of mercantilism. It was founded by the French physicist François Quesnay, who together with his followers - the so-called Physiocrats - affirmed that the intervention of mercantile policies in the economy had done nothing but harm nations.

For this reason, they rebelled against these, defending that economic laws should be aligned with human laws.

This current of thought derived from the era of the Enlightenment, and its characteristics defended the order of nature, laissez faire, private property, diminishing returns and capital investment, among other aspects.

characteristics

Natural order

Physiocrats believed that a "natural order" existed that allowed humans to live together without losing their freedoms. The term originated in China, a country that Quesnay knew and was greatly interested in; he even wrote several books on Chinese society and politics.

The Chinese believed that there could only be good government if there was perfect harmony between "the way of man" and the "way of nature." Therefore, the great Chinese influence that this economic theory had is clearly appreciated.

Individualism and

The Physiocratic school, and especially Turgot, believed that the motivation for all parts of an economy to function was self-interest.

Each individual decided what goals to pursue in life and what work would provide them with them. Although there are people who would work for the benefit of others, they will work harder if it is for their own benefit.

The term laissez-faire was popularized by Vincent de Gournay, who claimed to have adopted it from Quesnay's writings on China.

Private property

None of the previous assumptions would work if there were not a strong legality favorable to private property. The Physiocrats saw this as a fundamental part along with the individualism they defended.

Decreasing performance

Turgot was the first to recognize that if a product grows, it will first grow at an increasing rate, and then at a decreasing rate until it reaches its maximum.

This meant that productive gains in order to grow nations had a limit, and thus wealth was not infinite.

Capital investment

Quesnay and Turgot recognized that farmers needed capital to be able to start the production process, and both proposed to use part of each year's profits to increase productivity.

Representatives

François Quesnay (1694-1774)

Quesnay was a French physicist and economist, founder of the Physiocratic school through his Tableau économique, published in 1758.

This book was one of the first attempts, if not the first, to try to describe the workings of the economy analytically.

That is why it is one of the first important contributions to economic thought, which would later be continued by classical theorists such as Adam Smith and David Ricardo.

Anne Robert Jacques Turgot (1727-1781)

French politician and economist, Turgot is known as one of the first defenders of economic liberalism. Furthermore, he was the first to formulate the law of diminishing marginal returns in agriculture.

His best known work was Réflexions sur la formation et la distribution des richesses. It was published in 1766 and in this work Turgot developed Quesnay's theory that land is the only source of wealth.

Turgot also divided society into three classes: the farmer or producer class, the wage-earning class (stipendiée) or artisan class, and the landowner class (available). In addition, he developed a remarkable theory of interests.

Pierre Samuel du Pont de Nemours (1739–1817)

Another well-known physiocrat was Pierre du Pont, a French economist, government official, and writer.

A faithful follower of Quesnay, he maintained a very close relationship with him. Pierre du Pont wrote several books, such as The Physiocracy. He also published his memoirs in 1767 under the name Physiocracy or the most advantageous natural government constitution for mankind.

He also maintained a close relationship with Turgot - thanks to whom he obtained important positions as an economist - and was one of the drafters of the Treaty of Versailles.

Jacques Claude Marie Vincent de Gournay (1712-1759)

Vincent de Gournay was a French economist and commercial mayor who is credited with the phrase "laissez faire, laissez passer", a declaration of intent of the Physiocratic school.

He was Professor of Turgot in economic matters, and one of the leaders of the physiocracy along with Quesnay.

Pierre-Paul Mercier de la Rivière (1720 - 1793)

De la Rivière was a French administrator very attached to Quesnay's physiocratic ideology. His best known work is The Natural and Essential Order of Political Societies (1767), considered by many to be one of the most complete works on physiocracy.

Overseen by Quesnay, the treatise addresses the economic and political aspects of the Physiocratic school. In addition, it postulates that social order is achieved through the creation of three powers: the law and the judiciary, the power of an institution such as the government, and public institutions.

Nicolas Baudeau (1730-1792)

Baudeau was a French priest and economist who initially opposed the ideas of the Physiocratic school, and later became a standard-bearer for them.

He was the founder of the weekly Éphemerides, which he directed until 1768; from that year on it passed into the hands of Du Pont. In this weekly published Quesnay, Du Pont, Baudeau himself and Turgot, among others. Baudeau is credited with creating the name "physiocracy."

References

1. Henry William Spiegel (1983), The Growth of Economic Thought, Revised and Expanded Edition, Duke University Press
2. AL Muller (1978) Quesnay's Theory of Growth: A Comment, Oxford Economic Papers, New Series, Vol. 30
3. Steiner, Phillippe (2003) "Physiocracy and French Pre-Classical Political Economy", Chapter 5
4. A History of Economic doctrine from the time of the Physiocrats to the present day - Charles Gide and Charles Rist. 1915
5. Liana., Vardi, (2012). The physiocrats and the world of the Enlightenment. Cambridge: Cambridge University Press.
6. Herbermann, Charles, ed. (1913). "Nicolas Baudeau". Catholic Encyclopedia. New York: Robert Appleton Company.