Physiocrats is who? Representatives of the Physiocrats

In the 16th century, economic thought in Europe underwent significant changes: an active theoretical search for sources of capitalist wealth began. This turbulent era is rightly considered the period of the initial accumulation of capital, the period in which the European states began trade and political expansion, etc. At this time, the bourgeoisie is gaining ground not only in politics but also in the economy.

At the same time, there was a transition to the so-called classical teaching in France, where a school of physiocrats arose, founded by the famous Francois Quesnay.

What is physiocracy and who are the physiocrats?

The concept of "physiocracy" comes from the fusion of the Greek words "physis", which translates as "nature", and "kratos", which means power, power, domination. Physiocracy is the name of one of the most popular areas of so-called classical political economy, and physiocrats are, respectively, representatives of this direction. Despite the fact that the school itself originated in France in the middle of the XVIII century (in 1750, according to most sources), when the feudal system was rapidly growing in the country, the term "physiocrats" began to be used only in the XIX century. He was put into circulation by Dupont de Nemours, who published the works of the founder of this French school of economists, F. Ken. The representatives themselves preferred to call themselves "economists", but the theory they developed and whose adherents were "political economy". Physiocrats are supporters of the "natural order" in the economic life of society, who zealously defended the idea that nature and the earth are the only independent factor of production.

The origin of the theory of physiocrats

According to the majority of English, Russian and German historians, the founder of political economy is Adam Smith. However, French scholars refute this view, arguing that the emergence of this science is an exceptional merit of the school of physiocrats. They argue this by the fact that A. Smith wanted to dedicate his main work "The Wealth of Nations" to the recognized leader of the Physiocrats, Francois Quesnay.

Physiocracy replaced the so-called mercantilism, which was more a system than a theory. In addition, mercantilists failed to create a full-fledged scientific doctrine. Therefore physiocrats deserve to be recognized as the actual founders of political economy. They for the first time in history have put forward a principle according to which the life of a society is determined by a natural order. In their opinion, it is sufficient 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. With their deductive method is very similar method of A. Smith, as well as other prominent representatives of the "classical" political economy.

The Teaching of the Physiocrats: Basic Provisions

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

The main ideas of the Physiocrats boil down to the following:

1. The laws of economics are of a natural nature, that is, each person can 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 sphere that did not produce material wealth.
4. To the sterile sphere, the physiocrats included trade activity.
5. Net product physiocrats regarded as the difference between the combination of produced goods in agriculture and the costs necessary for their production.
6. Analyzing the real parts of capital, the physiocrats (representatives of the interests of farmers) noted that it is necessary to distinguish between "annual advances" (working capital), "initial advances" (fixed capital) and annual costs, which, in their opinion, constitute the basic fund of the organization of farms of farmers .
7. Cash was not included in any of the listed types of advances. Despite the fact that "money-capital" is a concept that modern economic theory very often uses, physiocrats, however, did not use it, arguing that money is barren, only their function as a medium of circulation matters . Moreover, it was believed that money can not be saved, since after they are withdrawn from circulation they lose their only beneficial function-to be a means of exchanging goods.
8. The doctrine of physiocrats reduced the question of taxation to three basic principles:

- taxation is based on the source of income;

- taxes must necessarily correspond to incomes;

- The cost of levying taxes should not be excessive.

Francois Quesnay and his economic table

The economic component of the French society of the second half of the eighteenth century was permeated with ideas expressed and disseminated to the masses by the Physiocrats. Representatives of this area of classical political economy solved questions as to how the economic relations of people under natural conditions should take place, and also what the 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 doctor at the court of Louis XV. He began to be interested in economic problems, having reached the age of sixty.

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

- productive (farmers and agricultural workers);

- Infertile (merchants and industrialists);

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

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

1. Farmers buy food from farmers for the sum of 1 billion livres. As a result of this action, 1 billion livres are returned to farmers and 1/3 of the annual product disappears from circulation.
2. For a billion, obtained by the class of owners as rent, landowners acquire industrial products produced by the "barren" class.
3. Industrialists buy their food from farmers (a productive class) for their own million. Thus, farmers get the next billion 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 cost of the annual product.
5. Industrialists get a million rubles from farmers for the raw materials they need to produce 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, in his opinion, be 1/3 of the net product.

F. Quesnay developed a concept of natural order, the basic 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 1727 in France and graduated from the Sorbonne Faculty 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", it was published in 1770.

Like other physiocrats, A. Turgot insisted on giving full freedom in economic activity and asserted that agriculture is the only source of surplus product. He was the first to single out workers, self-employed workers, and entrepreneurs from the class of "farmers" and the class of "artisans".

A. Turgot formulated the "Law of diminishing soil fertility", according to which every subsequent investment in the land, be it labor or capital, gives less effect than the previous investment, and at some point a limit comes, when the additional effect is simply impossible to achieve.

Other prominent representatives of physiocracy

The role played by the Physiocrats in the French economy should not be underestimated. Their ideas were reflected in the writings of such famous personalities as, for example, Pierre Lépezan de Boisguillebert and R. Cantillon.

Pierre de Boisguillebert is known for history as a man who put forward the famous principle of "Laisser faire, laisser passer", which later became the main principle of the economy. 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 those taxes that do not conflict with the natural order are advisable, but contribute to the development of economic activity. He spoke out against unreasonable interference of the state and the king in economic life, and also demanded to give the population 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 born in Ireland, but for many years he lived in France. In 1755, his main work, The Experience of Nature and Commerce, was published. In his work he identified a number of dangers that threaten the country in case it follows the thesis "buy cheaper, sell more." R. Cantillon noted that there are discrepancies between the existing market demand and supply, which makes it possible to purchase something cheaper, and to sell, accordingly, more expensive. People who use this opportunity in their own interests, he called "entrepreneurs."

The spread of the theory of physiocrats outside France

Physiocrats are not only the French who founded the school of physiocracy and defended its ideas inside the country. The Germans Schlettwein, Springer, Mowville, the Italians Bandini, Delphico, Sarkiani, the Swiss Schaeffer, Olaf Runeberg, Hidenius, Brunkman, Westerman, Poles V. Stroinovsky, A. Poplavsky and many others also considered themselves physiocrats.

Ideas of the Physiocrats were found especially in Germany. The most famous here was Karl-Friedrich, who attempted to reform the taxation system. For this, having selected several small villages, he abolished all previous taxes and instead introduced a single tax of 1/5 of the "net income" received from the land works.

In Italy, the theory of the Physiocrats had a tremendous impact on the reforms that Leopold Tuscany put into practice.

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

Regarding Poland, it should be noted that in this country, agriculture was a priority occupation of the population since the distant XVI century. That is why the ideas created by the French physiocrats here very quickly found their supporters. In the economy of Poland there have been qualitative changes and the standard of living of the middle strata of the population has appreciably increased.

Echoes of Physiocracy in Russia

Although in Russia there were no pure representatives of the physiocracy, however, 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 abolished the monopoly of factories for the production of a particular product, and on 17 March 1775 issued a manifesto that proclaimed 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 a Russian envoy in Paris and often took part in meetings of French physiocrats. Inspired by their ideas, he recommended Catherine II to send a student Quesnay Pierre de la Riviera an invitation to visit Russia. Arriving in the country, Rivière made a disappointing conclusion that the serfdom contradicts the "natural order", expressing his opinion incorrectly and, ultimately, in 8 months was sent back to France.

Golitsyn, in turn, put forward the idea of providing the peasants with the freedom of the individual and giving them the right of ownership of movable property. The land was offered to be left in the ownership of the landowners, who could lease it to the peasants.

Since the 70's. XVIII century Catherine II sharply changes his mind about the Physiocrats. Now she begins to complain that they are tired of her obsessive advice and, whenever possible, calls them "screamers" or "fools."

Disadvantages of the doctrine of the Physiocrats

Both mercantilists and physiocrats were often criticized for their ideas. Among the main shortcomings of the school of physiocrats, it is necessary to note the following:

1. The main shortcoming of the theory put forward by the Physiocrats is associated primarily with the erroneous opinion that agriculture is the only sphere of wealth creation.
2. The value of labor was determined exclusively in agriculture.
3. The physiocrats asserted that the only form of surplus product is land rent.
4. They spread the erroneous opinion that the land as well as the hard source of value is also.
5. They failed 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 teachings of the Physiocrats

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

1. One of the main merits of the physiocrats is that they managed to transfer research into the sphere of production. Their example was followed by all classical political economy.
2. Bourgeois forms of production were considered physiocrats as physiological, that is, natural and independent of the human will or the political order of society. This was the beginning of the doctrine of the objectivity of the laws of economics.
3. Defended the view that wealth is in use value, and not in money.
4. They were the first scientists who proposed to distinguish productive labor from unproductive.
5. They defined the concept of "capital".
6. They justified 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 subject of the equivalence of exchange, the Physiocrats inflicted a severe blow to the teachings of mercantilists and proved that exchange alone is not a source of wealth.

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