We explain what physiocracy is and what its history is. In addition, we explain what physiocratic theory is and the various criticisms of this school of thought.
Physiocracy is a school of economic thought developed by the philosopher, surgeon and economist François Quesnay.
What is physiocracy?
Physiocracy is a school of economic thought developed in France during the 18th century by the thinker, surgeon and economist François Quesnay (1694-1774). It is an economic theory based on the laissez fairewhich in French means “let it be,” and refers to the natural order.
As a school of economic thought, physiocracy defends the search for economic wealth based on the exploitation of the primary sector, that is, agricultureThis is because the physiocrats assume that this is the only sector that allows for the production of an economic surplus, since the cost of production is lower than the profit obtained.
Physiocratic theory is composed of three main areas:
- The philosophical area or the natural order.
- The political area or the government’s maximums.
- The economic area that links the other areas.
The Physiocratic school was born during the 18th century in an attempt to introduce, in the French Ancien Régime, a series of social forms that would promote economic growth based on agriculture.
Etymology of the term “physiocracy”
The word physiocracy comes from French physiocrat. It is a neologism that summarises the perspective of the physiocratic school developed by Quesnay. Etymologically, the term means “government of nature”.
The word physiocracy this formed from Greek roots physiswhich is the action of growing, and Kratoswhich means power. Thus, the emergence of “physiocracy” must be understood as the search for a term that alluded to the power of nature to govern.
History of the Physiocratic School
Physiocracy, as an economic doctrine, It developed during the first decades of the second half of the 18th century in reaction to the mercantilist doctrineThis was a time of much economic and political debate, as well as a period of intense intellectual activity in France.
The physiocratic school is considered the first economic school in history in the strict sense.. He had a teacher, a shared doctrine and means of propaganda. The economic theory of physiocracy was developed by François Quesnay, between 1757 and 1768. Quesnay considered agriculture as the only economic activity that could provide a net product as a surplus of work once the needs of production and consumption were satisfied.
Quesnay founded the school with the Marquis de Mirabeau, Victor Riquetti, in July 1757. They were joined by Le Mercier de La Riviére, G. François Le Trosne, Abbé Nicolas Baudeau and Pierre Samuel Dupont de Nemours. The group remained active for several years. Its most active period, when it published a large number of writings through its own media, was between 1760 and 1775.
Physiocratic theory
Physiocracy can be organized around three large areas: the philosophical-political area, the economic-analytical area and the area of government maxims.
The philosophical-political area It is organized around the concepts of natural order, evidence and legal despotism. Evidence has to do with the idea of a self-evident truth, which for the physiocrats consists of the existence of a natural order that governs society and that must be adopted for its proper functioning. Through the evidenceevery person can recognize and submit to this natural order.
The problem is that the political consequence of evidence and the natural order is legal despotism, which is a form of absolute government, without any countervailing power, which must enforce the particular interests of the natural order.
The economic-analytical area It is organized based on two major contributions: the theory of exclusive productivity of agriculture and the Economic table (economic table) by Quesnay. The production of the net product and the origin of wealth depend on them, as well as the distinction between occupations that are productive and those that are sterile, the division into three social classes (proprietary, productive and sterile) and the flow of payments and income developed in the Economic table.
For its part, the main maxims of the government economic are united to lead society towards the natural order, according to Quesnay. The main idea is to strengthen the French monarchy exclusively through the promotion of agriculture as the only source of wealth. The government program consists of four measures:
- Promote landowner spending on agricultural goods by reducing luxury purchases.
- Establish free trade in grain and generate the good price (good price).
- To base agricultural development on the extension of great culture over small culture.
- Carry out a tax reform that introduces a single tax on land income.
Criticisms of physiocracy
Physiocracy was not very well received in FranceOutside the physiocratic school and certain circles of followers, the majority of intellectuals and actors involved in the French economic circuit had some objection to physiocracy.
Many sectors were affected by the doctrine, especially guilds, local authorities, commercial organisations, tax collectors and landowners. In addition, The intellectual community criticized the economic foundations of the doctrinethrough publications by French economists and philosophers.
The first reviews were made by Jean-Joseph Graslin and Véron de Forbonnaisboth from the group of Vicent de Gournay. Voltaire also published a publication against physiocratic ideas. However, the one who had the greatest impact with his criticism was Ferdinando Galiana, who in 1770 published a text in which he directly attacked physiocratic theory.
References
- QUESNAY, François (1767-1768, 1768-1769): Physiocratie, or the natural constitution of government, the most advantageous of humankind; Report published by DuPont de Nemours2vol., Leyde and Paris, Merlin.
- Juanes, J. (1976). The Physiocrats: The Birth of Political Economy. IEconomic Research35(138), 405-413.
- Llombart, V. (2009). The value of Physiocracy in its own time: a critical analysis. Research in economic history5(15), 109-136.
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