Chapter 6 : THE PHYSIOCRATS

THE PHYSIOCRATS

Introduction

The physiocrats were a group of writers who developed a body of economic theory in France in the eighteenth century, with publications covering the period from 1756 to 1778.

• Though their writing period was short, they had a profound influence on economic thought and are regarded as the founders of the science of political economy.
• Adam Smith was greatly influenced by their economic ideas.
• The chief representatives of the physiocrats are Francois Quesnay (1694-1774) and Turgot (1727-1781).
• The term 'physiocracy' literally means 'Rule of Nature'.

📌 Exam Tidbits

• Francois Quesnay & Turgot | Chief representatives of the physiocrats.
• 1756 to 1778 | The specific period covering the publications of the physiocrats in France.
• Adam Smith | Greatly influenced by the economic ideas of the physiocrats.
• Physiocracy literally translates to "Rule of Nature".

The Factors which gave Rise to Physiocracy

France in the 1750s provided a favourable climate for physiocratic doctrines due to exactly six economic, political, and social factors:

1. Revolt against Mercantilism: Under Colbert (the famous Finance Minister of France), mercantilism was carried to an extreme, resulting in the neglect of agriculture and heavy governmental regulation of industry. The physiocrats aimed to provide a theoretical basis to attack mercantilism and reorganise the French economy via tax reform and efficient, large-scale farming.
2. Corrupt, Inefficient, and Unjust Tax System: The nobles and the clergy owned nearly two-thirds of land but were exempted from direct taxation. The poor bore a heavy tax burden, affected by the salt tax, the poll tax, and duties on goods passing from one province to another.
3. Bankrupt Government Finances: Unnecessary wars and luxurious court life bankrupted the government, forcing it to borrow loans under unfavourable conditions.
4. Exploitation of French Peasants: Peasants were exploited by nobles and wealthy classes who took a large share of the produce. The government imposed heavy taxes, and agricultural markets were restricted because mercantilist policies favoured manufactured goods.
5. Unfavourable Economic Performance compared to Britain: Britain…