Physiocrats - who is this? Representatives of the physiocrats

In the sixteenth century, economic thought in Europe underwent significant changes: an active theoretical search began for the sources of capitalist wealth. This turbulent era is rightly considered the period of the initial accumulation of capital, the period in which European states began commercial and political expansion, etc. At this time, the bourgeoisie is gaining ground not only in politics but also in economics.

Then there was a transition to the so-called classical doctrine in France, where a school of physiocrats arose, the founder of which was the famous Francois Quesnay.

What is physiocracy and who are physiocrats?

The concept of "physiocracy" comes from the merger of the Greek words "physis", which translates as "nature", and "kratos", which means power, strength, domination. Physiocracy is the name of one of the most popular areas of the so-called classical political economy, and physiocrats are, accordingly, representatives of this direction. Despite the fact that the school itself arose in France in the middle of the 18th century (in 1750, according to most sources), when the crisis of the feudal system was rapidly growing in the country, the term “physiocrats” began to be used only in the 19th century. It was introduced into circulation by Dupont de Nemours, who published the works of the founder of this French school of economists, F. Quesnay. Representatives of the trend themselves preferred to call themselves “economists”, and the theory that they developed and whose adherents were “political economics”. Physiocrats are supporters of the “natural order” in the economic life of society, who zealously defended the idea that nature, land is the only independent factor in production.

The origin of the theory of physiocrats

According to most English, Russian and German historians, the founder of political economy is Adam Smith. However, French scientists refute this opinion, arguing that the emergence of this science is the sole merit of the school of physiocrats. They argue this with the fact that A. Smith himself wanted to devote his main work, The Wealth of Nations, to the recognized leader of the physiocrats, François Quesnay.

Physiocracy replaced the so-called mercantilism, which was more a system than a theory. In addition, the mercantilists failed to create a full-fledged scientific doctrine. Therefore, it is the physiocrats who deserve to be recognized as the true founders of political economy. For the first time in history, they put forward the principle that the life of society is determined by the natural order. In their opinion, it is enough to discover laws that affect economic life, and it will be possible to create theories of reproduction and distribution of benefits among members of society. The method of A. Smith, as well as other prominent representatives of the "classical" political economy, is very similar to their deductive method .

The Doctrine of Physiocrats: Fundamentals

Physiocrats are opponents of mercantilism, who have actually managed to create a general economic science. They expressed the interests of large farmers, capitalists, and argued that farmers (farmers) were the only productive class existing in society.

The main ideas of the physiocrats are as follows:

1. The laws of economics are natural in nature, that is, everyone is able to understand them. In the case of the slightest deviation from these laws, the production process is inevitably violated.
2. The economic doctrine of the physiocrats is based on the proposition that the source of wealth is the sphere of production, in particular agriculture.
3. Industry was seen as a barren, non-material wealth sphere.
4. The physiocrats also attributed trading activity to the barren sphere.
5. Physiocrats saw the pure product as the difference between the aggregate of goods produced in agriculture and the costs necessary for their production.
6. Having analyzed the material parts of capital, physiocrats (representatives of the interests of farmers) noted that it is necessary to distinguish between “annual advances” (working capital), “primary advances” (fixed capital) and annual costs, which, in their opinion, represent the main fund for organizing agricultural enterprises .
7. Cash was not included in any of these types of advances. Despite the fact that “money capital” is a concept that is often used by modern economic theory, the physiocrats, however, did not use it, arguing that money is sterile, only their function of the medium of circulation matters . Moreover, it was believed that money should not be saved, because after they are withdrawn from circulation, they lose their only, beneficial function - to be a means of exchanging goods.
8. The issue of taxation, the teachings of the physiocrats reduced to three basic principles:

- taxation is based on the source of income;

- taxes must be consistent with income;

- The costs of levying taxes should not be excessive.

Francois Quesnay and his economic table

The economic component of French society in the second half of the 18th century was permeated with ideas that were expressed and disseminated by the physiocrats. Representatives of this direction of classical political economy resolved questions as to how economic relations of people should proceed in the conditions of a natural order, and also what principles of these relations should be. The founder of the school of physiocrats was Francois Quesnay, born in a suburb of Paris in 1694. By profession, he was not an economist, but served as a physician at the court of Louis XV. He began to become interested in economic problems, having reached sixty years.

The main merit of F. Quesnay was the creation of the famous "economic table". In his work, he showed how the aggregate product that is created in agriculture is divided between the classes existing in society. Quesnay distinguished the following classes:

- productive (farmers and agricultural workers);

- barren (merchants and industrialists);

- owners (landowners, as well as the king himself).

According to Quesnay, the movement of an annual aggregate product consists of 5 main steps, or acts:

1. Farmers buy from farmers food worth 1 billion livres. As a result of this action, 1 billion livres is returned to farmers and 1/3 of the annual product disappears from circulation.
2. For the billion received by the class of owners as annuities, landowners acquire industrial products produced by the "barren" class.
3. Industrialists, in their million, buy food from farmers (productive class). Thus, the next billion go to farmers and already 2/3 of the annual product disappear from circulation.
4. Farmers buy manufactured products from industrialists. The cost of purchased products is included in the price of the annual product.
5. Industrialists for the received billion buy from farmers the raw materials they need for the production of products. Thus, the movement of the annual product contributes to the reimbursement of funds used in industry and, of course, in agriculture, as the main prerequisite for the resumption of the production process.

As for taxes, F. Quesnay believed that they should be levied exclusively on landowners. The amount of tax should be, in his opinion, 1/3 of the net product.

F. Quesnay developed the concept of the natural order, the main idea of ​​which is that the moral laws followed by the state and each individual citizen should not contradict the interests of society as a whole.

The main ideas of the physiocrat A. Turgot

A. Turgot was born in France in 1727 and graduated from the Sorbonne Department of Theology. In parallel, he was fond of the economy. For two years, from 1774 to 1776, A. Turgot was the general controller of finance. The work that brought fame to the physiocrat is called “Reflections on the Creation and Distribution of Wealth,” which was published in 1770.

Like other physiocrats, A. Turgot insisted on providing complete freedom in economic activity and argued that agriculture was the only source of surplus product. He was the first to distinguish between the class of "farmers" and the class of "artisans" workers, employees, and also entrepreneurs.

A. Turgot formulated the "Law of diminishing soil fertility", according to which each subsequent investment in the land, whether labor or capital, has less effect than the previous investment, and at a certain point there comes a limit when the additional effect is simply impossible to achieve.

Other prominent representatives of the physiocracy

The role played by the physiocrats in the French economy cannot be underestimated. Their ideas are reflected in the writings of such famous personalities as, for example, Pierre Lepesan de Boisguillebert and R. Cantillon.

Pierre de Boisguillebert is known to history as the man who put forward the famous principle of “Laisser faire, laisser passer”, which later became the main principle of economics. He sharply criticized the theory of mercantilists, but at the same time supported the ideas that the school of physiocrats carried to the masses. Representatives of mercantilism, according to Boisguillebert, should reconsider their vision in the field of economics, which does not correspond to the real realities of life.

According to Boisguillebert, only taxes that are not in conflict with the natural order, but contribute to the development of economic activity, are expedient. He spoke out against the unjustified interference of the state and the king in economic life, and also demanded that the population be given the right to freely trade. In addition, he was one of the authors of the labor theory of value, arguing that the real value of the goods should be determined by labor, and the measure of value - by working time.

R. Cantillon was a native of Ireland, but for very long years he lived in France. In 1755, his main work, Experience on Nature and Trade, was published. In his essay, he identified a number of dangers that threaten the country if it follows the thesis "buy cheaper, sell more expensive." R. Cantillon noted that there are discrepancies between existing market demand and supply, which make it possible to purchase something cheaper and sell, respectively, more expensive. He called people using this opportunity to their advantage “entrepreneurs."

Propagation of the theory of physiocrats outside France

Physiocrats are not only the French who founded the school of physiocracy and defended its ideas domestically. Germans also considered themselves physiocrats: Schlettwein, Springer, Movilion, Italians Bandini, Delfiko, Sarkiani, Swiss Sheffer, Olaf Runeberg, Hidenius, Brunkman, Westerman, Poles V. Stroynovsky, A. Poplavsky and many others.

The ideas of the physiocrats were especially found in Germany by many supporters. The most famous here was Karl-Friedrich, who made an attempt to reform the tax system. To do this, having selected several small villages, he abolished all previous taxes and instead introduced a single tax in the amount of 1/5 of the "net income" received from land products.

In Italy, the theory of physiocrats had a huge impact on the reforms that Leopold of Tuscany brought to life.

In Sweden, physiocracy also gained ground. Sharply began to weaken mercantilism, and the physiocrats did not miss their chance. Their brightest representative was Hidenius, who talked about the source and causes of the poverty of the state. In addition, he was fascinated by the issue of emigration. He tried to identify the causes of this phenomenon and to develop measures to eliminate it.

Regarding Poland, it should be noted that in this country, farming has been a priority occupation of the population since the distant XVI century. That is why here very quickly found their supporters of the ideas put forward by the French physiocrats. The economy of Poland underwent qualitative changes and the standard of living of the middle layers of the population significantly increased.

Echoes of physiocracy in Russia

Although there were no pure representatives of physiocracy in Russia, certain provisions of this direction to some extent influenced the reign of Catherine II. For example, in the first years of her reign, the empress abolishes the monopoly of factories on the production of a product, and on March 17, 1775, publishes a manifesto that proclaims the principle of free competition. In 1765, the Free Economic Society was created , the members of which became Russian supporters of applied physiocracy. One of them was agronomist Andrei Bolotov.

Dmitry Golitsyn was the Russian ambassador in Paris and often took part in the meetings of the French physiocrats. Inspired by their ideas, he recommended that Catherine II send a student of Quesnay Pierre de la Riviera an invitation to visit Russia. Arriving in the country, Riviere made a disappointing conclusion that the serfdom is contrary to the "natural order", expressing his opinion incorrectly and, ultimately, after 8 months was sent back to France.

Golitsyn, in turn, put forward the idea of ​​ensuring the peasants freedom of the individual and giving them the right of ownership of movable property. Land was proposed to be left in the ownership of the landlords, who could lease it to the peasants.

Since the 70s. XVIII century Catherine II sharply changes her opinion about the physiocrats. Now she begins to complain that they are tired of her with their obsessive advice and, whenever possible, calls them "screamers" or "fool".

Disadvantages of the Physiocrats

Both mercantilists and physiocrats were often criticized for their ideas. Among the main disadvantages of the school of physiocrats, the following should be noted:

1. The main drawback of the theory put forward by the physiocrats is primarily due to the erroneous opinion that agriculture is the only area of ​​wealth creation.
2. The cost of labor they determined exclusively in agriculture.
3. Physiocrats argued that land rent was the only form of surplus product.
4. They spread the erroneous opinion that, along with labor, land is also a source of value.
5. They were not able to conduct a complete and comprehensive analysis of the reproduction process, since industrial production was not considered by them as a source of value.

Strengths of the Physiocratic Doctrine

Among the positive aspects of the theory of physiocrats, the following should be highlighted:

1. One of the main achievements of the physiocrats is that they managed to transfer research into the sphere of production. All classical political economy followed their example.
2. Bourgeois forms of production were considered by physiocrats as physiological, that is, natural and independent of human will or the political structure of society. This was the beginning of the doctrine of the objectivity of the laws of economics.
3. They upheld the point of view that wealth is in use value, not in money.
4. They were the first scientists to distinguish productive labor from unproductive.
5. They defined the concept of “capital”.
6. They substantiated the division of society into 3 main classes.
7. F. Quesnay in his "economic table" made an attempt to conduct a comprehensive analysis of the reproduction process.
8. Raising the topic of the equivalence of exchange, the physiocrats dealt a severe blow to the teachings of the mercantilists and proved that exchange itself is not a source of wealth.

Since the physiocrats had the idea of ​​creating wealth exclusively in agriculture, they demanded that the government annul all taxes in the industrial sphere. As a result, conditions appeared for the normal development of capitalism.