Physiocrats

Definition

Physiocrats were a group of 18th-century French economists who believed that the wealth of nations was derived primarily from agriculture and that agricultural production was the source of all economic value. They emphasized the importance of natural laws in economics, advocating for a free market and minimal government intervention, which connected to broader Enlightenment ideas about reason and human progress.

5 Must Know Facts For Your Next Test

1. Physiocrats believed that land was the ultimate source of wealth, arguing that agricultural output was more valuable than manufacturing or trade.
2. François Quesnay, a leading figure among physiocrats, created the 'Tableau Économique,' which illustrated the flow of goods and money in an economy.
3. They rejected mercantilism, which emphasized trade surplus and state regulation, instead promoting free trade as the key to prosperity.
4. The physiocratic view laid the groundwork for classical economics by highlighting the significance of production and supply in determining economic value.
5. Their ideas influenced later economic theories and policies, especially the concept of laissez-faire capitalism embraced by Adam Smith and other Enlightenment thinkers.

Review Questions

• How did physiocrats' beliefs about agriculture influence their views on economic policy?
  • Physiocrats believed that agriculture was the foundation of wealth, leading them to advocate for economic policies that favored farming over manufacturing or trade. This perspective influenced their push for laissez-faire principles, as they argued that minimal government intervention would allow natural economic processes to flourish. Their focus on agricultural productivity highlighted the importance of land and farming in creating value, which stood in contrast to the prevailing mercantilist views of the time.
• Evaluate the impact of François Quesnay's 'Tableau Économique' on later economic thought.
  • François Quesnay's 'Tableau Économique' significantly impacted later economic thought by providing a visual representation of how different sectors interacted within an economy. It illustrated how agricultural production generated income and led to consumption, influencing future economists' understanding of economic cycles. The ideas presented in this work laid foundational concepts for classical economics, helping shape discussions around production, distribution, and wealth.
• Synthesize how physiocrats contributed to Enlightenment thinking regarding human progress and rationality in economics.
  • Physiocrats contributed to Enlightenment thinking by promoting the idea that rational understanding of natural laws could lead to economic prosperity. Their emphasis on agriculture as the source of wealth reflected a belief in reason and observation over tradition and dogma. This perspective aligned with broader Enlightenment ideals, suggesting that by applying reason to economic practices and allowing markets to operate freely, societies could achieve progress and improve living standards for all.

Related terms

Laissez-faire: An economic philosophy advocating for minimal government interference in the market, allowing individuals to operate freely.

Adam Smith:

A Scottish economist and philosopher, known for his influential work 'The Wealth of Nations,' which built upon some physiocratic principles and laid the groundwork for modern economics.

Natural Law:

A philosophy asserting that certain rights or values are inherent in human nature and can be understood through reason, heavily influencing Enlightenment thinkers.