Physiocrats - who is this?

In the XVI century economic thought in Europe has undergone significant changes began an active search for a theoretical source of capitalist wealth.This turbulent era is rightly considered the period of primitive accumulation of capital, a period in which European countries have started commercial and political expansion, and so on. D. At this time, the bourgeoisie recaptures position not only in politics but also in economics.

At the same time, and there was a transition to the so-called classical doctrine in France, where there was a school of the Physiocrats, the founder of which was the famous François Quesnay.

What physiocracy and who are the Physiocrats?

term "physiocracy" comes from the fusion of the Greek words «physis», which translates as "nature" and «kratos», which means power, strength, dominance.Physiocracy - the name of one of the most popular destinations are the so-called classical political economy, and the Physiocrats - that, accordingly, the representatives of this trend.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 country is rapidly growing crisis of the feudal system, the term "Physiocrats" began to be used only in the XIX century.It was coined by Dupont de Nemours, who has published works of the founder of the French school of economists - F. Ken.Themselves representatives of the direction preferred to call himself the "Economists" and the theory that they developed and adherents of that is - "political economy."Physiocrats - supporters of the "natural order" in the economic life of the community, who vigorously defended the idea that the nature, the earth - this is the only independent factor of production.

origin of the theory of the Physiocrats

According to the majority of British, Russian and German historians, is the founder of political economy, Adam Smith.However, the French scientists refute this view, arguing that the emergence of this science - an exceptional merit of the school Physiocrats.Their argument is that Adam Smith himself wanted to devote his main work, "The Wealth of Nations" recognized leader of the Physiocrats - Francois Quesnay.

Physiocracy replaced the so-called mercantilism, which was more a system than theory.In addition, the mercantilists were unable to create a full-fledged scientific doctrine.Therefore, it is Physiocrats deserve to be recognized as valid by the founders of political economy.They have put forward for the first time in the history of the principle that the life of a society is determined by the natural order.According to them, it is enough to discover the laws that affect the economic life, and you can create a theory of reproduction and distribution of benefits among members of society.With their deductive method is very similar to the method of A. Smith and other prominent representatives of the "classical" political economy.

Doctrine of the Physiocrats: outline of

physiocrats - it is the opponents of mercantilism, which actually managed to create a general economic science.They expressed the interests of big farmers, capitalists, and argued that the farmers (farmers) are the only existing productive class in society.

basic ideas of the Physiocrats are as follows:

1. The laws of economics are different natural character, that is, they can understand each person.In the case of the slightest deviation from these laws, the production process will inevitably violated.
2. economic doctrine of the Physiocrats is based on the position that the source of wealth is the sphere of production, particularly agriculture.
3. Industries seen as sterile, not producing material goods sphere.
4. By Physiocrats barren field applies trading activities.
5. pure product Physiocrats regarded as the difference between the set of goods produced in agriculture and expenses necessary for their production.
6. analyzing real parts of the capital, the Physiocrats (the representatives of the interests of farmers) pointed out that we must distinguish between "annual advances" (working capital), "the primary advances" (fixed assets) and annual costs, which, in their opinion, are the basic foundation of the organizationfarms farmers.
7. Cash did not include any of these types of advances.Despite the fact that "money capital" is a concept that often operates with modern economic theory, the Physiocrats, however, did not use it, arguing that the money is sterile, it has a value of only medium of their function.Moreover, it was thought that can not save money, because after removing them from circulation, they lose their only benefiting functions - be a means of exchange of goods.
8. Question tax doctrine of the Physiocrats boils down to three basic principles:

- taxation is based on the source of income;

- taxes should be required to meet the revenue;

- the cost of collection of taxes should not be excessive.

Francois Quesnay and his economic table

The economic component of the French society of the second half of the XVIII century was riddled with ideas that are expressed and spread to the masses Physiocrats.Representatives of this trend classical economics decide questions as to how to proceed should the economic relationship between people in terms of the natural order, as well as what should be the principles of these relations.The founder of the school of the Physiocrats was François Quesnay, who was born in the suburbs of Paris in 1694.By profession he was not an economist, and served as a doctor at the court of Louis XV.Problems of Economics, he became interested in reaching sixty years.

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

- productive (workers, farmers and agriculture);

- sterile (merchants and industrialists);

- owners (landlords, as well as the king).

According to Quesnay, the movement of the annual total product consists of five basic steps or acts of:

1. Farmers buy farmers food for the amount of 1 billion francs.As a result, the action returns to the farmers 1 billion francs, and 1/3 of the annual product disappears from circulation.
2. per billion, resulting in a class of property owners as rents, landlords purchase manufactured goods produced by "sterile" class.
3. industrialists to buy a million farmers (productive class) food.Thus, farmers goes to the next billion and have 2/3 of the annual product disappear from circulation.
4. Farmers buy from manufacturers produced products.Cost of purchased products included the annual product.
5. Industrialists on the resulting billion purchase raw materials from farmers, they need for production.Thus, the movement of the product contributes to the annual reimbursement of funds used in the industry and certainly in agriculture, as the main prerequisite for the resumption of the production process.

With regard to taxes, F. Quesnay believed that they should charge only with the landowners.The amount of tax shall be, in his opinion, 1/3 of the pure product.

F. Quesnay developed the concept of the natural order, the basic idea of ​​which is that the moral laws, which should be the state and every citizen, should not contradict the interests of society as a whole.

main ideas Physiocrat A. Turgot

A. Turgot was born in 1727 in France and graduated from the Sorbonne faculty of theology.Parallel to this, he was fond of the economy.For two years, from 1774 to 1776 A. Turgot was the general inspector of finance.The work, which brought fame Physiocrats, called "Reflections on the creation and distribution of wealth", it was published in 1770.

Like other Physiocrats, A. Turgot insisted on providing complete freedom in economic activities and argued that the sole source of surplus product is agriculture.He was the first who identified the class of "farmers" and Class "artisans" of workers, workers' self-employed and entrepreneurs.

A. Turgot was formulated "The law of diminishing returns", according to which each subsequent attachment to the land, whether labor or capital, gives a smaller effect than the previous attachment, and at some point there comes a limit when the additional effect simply been impossible to achieve.

Other prominent members physiocracy

role played by the Physiocrats in France's economy should not be underestimated.Their ideas are reflected in the works of such well-known personalities such as Pierre de Lepezan Boisguillebert and Richard Cantillon.

Pierre de Boisguillebert known as the man who put forward the principle of the famous «Laisser faire, laisser passer», which later became the main principle of the economy.He sharply criticized the mercantilist theory, but at the same time supported the idea that carried the weight of a school of the Physiocrats.Representatives of mercantilism, according Boisguillebert should reconsider its vision in the field of economy, which does not correspond to the present realities of life.

According Boisguillebert, it is appropriate to only those taxes that are not in conflict with the natural order, and promote the development of economic activity.He spoke out against the unwarranted interference of the state and in the economic life of the king, and demanded to provide the public the right to trade freely.In addition, he was one of the authors of labor theory of value, arguing that the real value of the goods shall be determined by labor, and a measure of value - working time.

R. Cantillon was a native of Ireland, but for a very long lived in France.In 1755, he published his major work "The experience of nature and commerce."In his work, he identified a number of hazards that threaten the country as if it will follow the thesis "to buy cheaper and sell more expensive."R. Cantillon noticed that between the current market supply and demand, there are differences, owing to which it is possible to buy something cheaper and sell, respectively, more expensive.People are using this opportunity to their advantage, he called "entrepreneurs."

extension of the theory of the Physiocrats outside France

physiocrats - it's not just the French who founded the school of the Physiocrats and defended her ideas in the country.Physiocrats also considered themselves Germans Shlettveyn, Springer, Movilon Italians Bandini, Delphic, Sarkiani, Swiss Schaefer, Olaf Runeberg, Hidenius, Brunkman, Westerman, Stroynovsky Polyakov, A. Poplawski, and many others.

ideas Physiocrats especially found many supporters in Germany.The most famous was here Karl-Friedrich, who attempt to reform the tax system.To do this, select several small villages, he canceled all previous taxes and instead introduced a single tax of 1/5 of the "net income" derived from the works of the earth.

In Italy, the theory of the Physiocrats had a tremendous impact on the reforms implemented the Leopold Tuscany.

Sweden physiocracy also win position.Very mercantilism began to wane, and the Physiocrats did not miss his chance.The most striking of their representative was Hidenius who talked about the sources and causes of poverty state.In addition, it fascinated by the question of emigration.He tried to identify the causes of this phenomenon and to develop measures to eliminate it.

about Poland should be noted that in this country, agriculture was a priority occupation of the population is still far from the XVI century.That is why it is very quickly found its supporters of the idea that pushed the French Physiocrats.The Polish economy qualitative changes and the standard of living of the middle strata of the population significantly increased.

Echoes physiocracy in Russia

Although Russia and was not clean physiocracy representatives, but certain provisions of this trend to some extent influenced the reign of Catherine II.For example, in the early years of the reign of Empress abolishes the monopoly of factories for the production of a product, and March 17, 1775 publishes a manifesto that proclaimed the principle of free competition.In 1765 it was created the Free Economic Society, whose members were Russian supporters of Applied physiocracy.One of them was an agronomist Andrei Bolotov.

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

Golitsyn, in turn, put forward the idea to allow farmers the freedom of the individual and give them ownership of the movable property.Land was offered to leave the property of the landlords, which would lease it to the peasants.

Since the 70th.XVIII century Catherine II abruptly changes his mind about the Physiocrats.Now she begins to complain that they are fed up with her own obsessions advice and, whenever possible, calling them "ranters" or "fooling around."

Disadvantages teachings of the Physiocrats

and mercantilists and physiocrats often been criticized for their ideas.Among the major shortcomings of the school Physiocrats following should be noted:

1. The main drawback of the theory put forward by the Physiocrats, associated primarily with the mistaken belief that agriculture is the only sector creating wealth.
2. labor costs are determined exclusively in agriculture.
3. Physiocrats argued that the only form of surplus product is ground rent.
4. They spread misconception about what a par with the cost source of difficulty is also a land.
5. They failed to carry out a full and comprehensive analysis of the reproduction process, since industrial production was not seen by them as a source of value.

Strengths teachings of the Physiocrats

Among the positive aspects of the theory of the Physiocrats should highlight the following:

1. One of the main merits of the Physiocrats is that they were able to transfer research in the sphere of production.Their example was followed by all classical political economy.
2. bourgeois form of production Physiocrats considered as physiological, ie natural and independent of human will or political order of society.This was the beginning of the doctrine of objective laws of economics.
3. defended the view that wealth is the use-value, and not the money.
4. were the first scientists who proposed to distinguish productive from unproductive labor.
5. They gave the definition of "capital."
6. justify the division of society into three major classes.
7. F. Quesnay in his "Economic Table" made an attempt to conduct a comprehensive analysis of the reproduction process.
8. raised the topic of the equivalence of the exchange, the Physiocrats dealt a heavy blow to the doctrine of the mercantilists and proved that the exchange itself is not a source of wealth.

Since Physiocrats belonged to the idea of ​​creating wealth exclusively in agriculture, they demanded that the government cancel all taxes in the industrial sector.As a result, there were conditions for the normal development of capitalism.