The origin of economic thought. Mercantilism and Physiocrats. Test: Mercantilists and Physiocrats Economic theories of mercantilists and physiocrats
Prior to the era of capitalism, economic research was fragmentary, concerned with the analysis of practical economic activity, occasionally illuminated by brilliant conjectures regarding the underlying laws of the flow of economic processes. The situation changes dramatically with the beginning of the development of capitalist economic relations. This is characterized in Europe in the 15th-16th centuries. n. e., in the era of great geographical discoveries, in the era of the primitive accumulation of capital. Historically and logically, initially, capital appears in the form of merchant and money capital. The discovery of new territories and the capture of colonies greatly accelerated the process of formation of national trade and money capital, which in turn drew attention to the study of patterns in the sphere of trade and money circulation. The first school in the history of economic thought arose - mercantilism(merchant - merchant, merchant). Proponents of this theory believed that a nation would be richer the more gold and silver it had. Accumulation occurs in the process of foreign trade or in the course of extraction of precious metals. Hence - only labor in the field of extraction of precious metals is productive. In matters of economic policy, supporters of this theory make recommendations for increasing the flow of gold and silver into the country. There are early and late mercantilism.
Representatives early mercantilism relied on administrative measures to retain precious metals in the country (export ban). Foreign merchants, the proceeds were to be spent on the territory of the country. This hindered the development of foreign trade relations. Supporters late mercantilism believed that it was necessary to ensure an increase in precious metals in the country by non-administrative, but economic means. These funds include all funds that lead to the achievement of a positive trade balance (exports more than imports).
These tools are described in detail. T. Mann(1571-1641), an influential English merchant and a well-known representative of late mercantilism. He wrote that there is no other way to get money than trade, and when the value of exported goods exceeds the value of annual imports of goods, money capital, countries will increase. The economic policy proposed by T. Mann was called the policy protectionism, or policies to protect the national market. It comes down to restricting imports and encouraging exports. T. Mann proposed the following measures: the introduction of protectionist tariffs on imported goods, quotas, export subsidies and tax breaks for exporters, and so on. (they still apply today). Since these measures are implemented with the help of the state, therefore, representatives of both early and late mercantilism took for granted the active intervention of the state in economic processes.
Distinctive features of mercantilism:
exceptional attention to the sphere of circulation;
considering money as an absolute form of wealth;
classifying as productive only labor for the extraction of gold and silver;
substantiation of the economic role of the state;
the belief that the excess of exports over imports is an indicator of the country's economic well-being.
Critics of mercantilism have pointed out that a trade surplus is only a fleeting effect, since the influx of precious metals into the country raises domestic prices and the doctrine of "sell high, buy low" turns against the country itself.
French economist R. Cantillon and English philosopher D. Hume described the "gold-cash flow mechanism", which automatically leads to the natural distribution of precious metals between countries and the establishment of such levels of domestic prices at which the country's exports become equal to imports. The essence of their theory is that additional quantity gold increases domestic prices relative to other countries, this, in turn, will weaken the competitiveness of goods in foreign markets, reduce the volume of exports and increase the volume of imports, and the difference in the excess of imports over exports will be paid by the outflow of gold. The process continues until a new equilibrium between exports and imports is established in all trading countries, corresponding to a higher supply of gold.
Mercantilists believed that state power was the main goal. It can be achieved by weakening the power of other states. Based on the fact that the economic interests of nations are mutually antagonistic, since there is a fixed amount of resources in the world that a country can only receive at the expense of another. The mercantilists defended the policy of "beggar your neighbor" and advocated the reduction of domestic consumption as a goal of national policy, which was characteristic of economic views until the end of the 18th century.
Mercantilists believed that money is the "muscular force of war" and stimulates trade: an increase in the supply of money is accompanied by an increase in the demand for goods and, consequently, the volume of trade. It is better to spend money on luxuries than to give them away, because, in the first case, the development of industry is stimulated, and in the second, the money remains inactive. The upper classes of society have a duty to provide jobs and solve this problem by spending money on expensive whims and maintaining a magnificent retinue.
In the works of late mercantilists, the idea appears that an increase in money in circulation can have a significant impact on the growth of production. "Money stimulates production" - J. Law (1671-1729), who believed that the key to economic prosperity is the abundance of money in the country. At what money should not be metal, but credit (this is the difference from classical mercantilists), created by the bank according to the needs of the national economy. It is precisely the growth of money, by drawing idle people into the business, that ensures the full utilization of labor power and other factors of production. An increase in the money supply will reduce interest and give an impetus to the growth of production, and incomes that were previously unemployed will give a new impetus to a wave of consumer demand.
J. Law's attempt to implement these ideas in France at the beginning of the 18th century ended in failure, but the main provisions of his economic theory were an integral part of the economic policy of Keynesianism.
With their views, the mercantilists expressed the laws and needs of economic development. This policy could not have been different: accelerated capitalist development was possible only within the national framework and largely depended on state power, which promoted the accumulation of capital and thus economic growth.
Federal Agency for Education of the Russian Federation
SEI VPO Ural State University of Economics
Distance Education Center
by discipline: Economic theory.
on the topic:The teachings of the mercantilists and physiocrats.
option№3
Completed:Chikina Nadezhda Viktorovna
(I.O. Surname)
gr. ETRp-08KT
Checked:____________________________
(position, rank)
________________________________
Krasnoturinsk
1. Introduction.
5. The main aspects of Smith's economic doctrine
6. The Importance of Mercantilism
7. general characteristics physiocratic teachings
8. Francois Quesnay (1694-1774)
9. Economic table 10. The “sect” of physiocrats: achievements and miscalculations by F. Quesnay
11.Conclusion
12. List of references
1. Introduction .
The choice of the topic of the essay is not accidental. Here one can draw both methodological and historical parallels. Although already since the 70s of the last century the assertion of the connection between phylogenesis and ontogenesis has been refuted by biology, one can single out a sound methodological grain in this thesis. The evolution of economic doctrine is inextricably linked with the development of social reproduction. The initial accumulation of capital is associated with the theory of mercantilists, or rather, its theoretical justification. This time was associated with the rapid growth of the non-manufacturing sector, namely commerce. What is still observed in Russia, namely, high, albeit slowing down, the pace of development of the trade sector. And we can safely say that the huge fortunes of modern nouveaux riches are earned precisely by commerce. As old Marx said, “Capital rules the world!”, Russia is ruled by trading capital. But this is a very, very flawed way of development. Firstly, trade turnover does not give rise to real new value, and if Marx is exploited, then we can say that only labor, or rather a surplus product, gives rise to new value. Secondly, income from trading operations, namely, the rate of return is already striving for normal profit. And thirdly, the hypertrophied development of commercial capital is extensive way development, which is by definition vicious. This is only a banking multiplier that can give birth to money out of thin air, but this is a completely different story, or rather a theory, a theory of banking. Money by itself is not capable of generating a day. Although the time theory of money is unconditionally right, but with certain reservations, namely, with a rigid reference to internal norm profitability of the manufacturing sector of the economy. And money, by its very nature, does not multiply wealth (let alone create it) - in this context, they have only a distributive function (let’s sin against general theory Finance Drobozina and attribute this function to money. Romanovsky, in his last work “Finance, monetary circulation and credit” of 2001, on the contrary, attributed this function to money in order to reveal the essence of finance as a “specific economic category”). Continuing our reasoning, we logically conclude that money is only a nominal expression of wealth, and not wealth itself.
In order to understand the process of formation of modern economic theories, we cannot ignore the school of physiocrats. The school of physiocrats is a specific trend within the framework of classical political economy. The word “physiocracy” is of Greek origin and in translation means “the power of nature” (Physis (nature) + kratos (power)). In this sense, representatives of Physiocratism proceeded from the decisive role in the economy of the land, agricultural production.
The study of the ideas of this school is quite important, since, in the words of Karl Marx, the physiocrats “within the limits of the bourgeois outlook gave an analysis to capital” and became “the real fathers of modern political economy.”
Purpose of the work: to study the views of physiocrats.
Tasks: 1) find out the views of the founder of the school F. Quesnay; 2) to determine what contribution was made to the development of Quesnay's ideas by his followers, including Turgot (although he did not consider himself such); 3) to draw a conclusion about the essence of the ideas of the physiocrats and their contribution to the development of economic science.
At the same time, the main attention is paid, of course, to the views of Quesnay and Turgot, since the followers of Quesnay practically did not introduce anything new; they only repeated the teacher's thoughts. This will be discussed in more detail in the third chapter.
When writing this work, a number of books were used - both textbooks and monographs. It makes no sense to list all educational and encyclopedic manuals. I will only note the “History of Economic Doctrines” by Y. Yadgarov, in which the material is briefly and concisely presented, the main points and activities of Quesnay and Turgot are clearly indicated, the essence of their views. However, this tutorial, in which there is clearly not enough material for voluminous work; in addition, there is not a single line at all about the rest of the representatives of the school.
This gap is filled in by A. V. Aninin’s book “The Youth of Science: The Life and Ideas of Economic Thinkers Before Marx”. Although it is written in a fairly popular form, it nevertheless raises and discusses many little-known points and contentious issues.
Interesting material is also provided by the World History of Economic Thought (Vol. 1). Drozdov V.V. makes interesting conclusions in the book “F. Quesnay". This is not just a biography, but it also provides an analysis of Quesnay's teachings. Finally, among foreign authors, we mention Takashi Negishi and his History of Economic Theory. This is a special work, and the author in it has little to do with economic doctrines, in particular, the school of physiocrats; he pays more attention to the development of the theoretical and mathematical apparatus. So, in Quesnay, he was only interested in his "Economic Table"; Takashi Negishi gives a detailed analysis of it. In addition, from this book you can also learn about what influenced the development of Quesnay's views; this is very important, since it largely determined the direction and train of thought of the founder of the physiocratic school.
2. F. Quesnay - the founder of the physiocratic school. In order to attract money from abroad, the government engaged in damage to the coin, which led to a decrease in the exchange rate. The mercantilists mistakenly believed that as a result of the depreciation of money, foreigners would be able to purchase more goods for the same amount of national coins, and therefore they would be interested in recoining their money into native ones.
Early mercantilism was called the monetary system, since its representatives still vaguely saw even a direct connection between trade and money circulation.
Late mercantilism, “a more developed mercantilist system” (K. Marx), the most important representatives of which are T. Maine (England), A. Serra (Italy), Montchretien (France), etc., arises after the great geographical discoveries and reaches its peak in middle of the 17th century. In connection with the development of domestic industry, the role of foreign trade is increasing, special meaning intermediary trade acquires, the fiscal policy is replaced by the encouragement of national industry and trade.
central point late mercantilism is the "balance of trade system". It was believed that the state becomes richer, the greater the difference between the sum of the cost of exported and imported goods (active trade balance), although the amount of material wealth decreased. This difference was sought to be achieved in two ways. Firstly, due to the export of products of their country. At the same time, only finished products were allowed to be exported, since more money than from the export of raw materials. The import of luxury items was prohibited. Secondly, and this was the main thing, with the help of intermediary trade, in connection with which they demanded the export of money abroad. At the same time, they put forward the principle of buying cheaper in one country and selling more expensive in another. Marx characterized late mercantilism as manufacturing, or commercial system.
To implement an active trade balance, the late mercantilists advocated a policy of protectionism, which provided for the imposition of high duties on foreign goods, and thereby created favorable conditions for the development national production and trade.
3. Mercantilism in Russia.
In the 17th century Russia has entered a new phase of its development. In connection with the growth of the social division of labor, a single national market began to form in it. In industry, large enterprises appear in the form of manufactories. A class of merchants is formed. The economy of the feudal lords and peasants was mainly subsistence, but production for the market was also noticeably increasing. The progressive leaders of Russia were already fully aware of the need to eliminate the economic backwardness of Russia from the advanced countries of the West. The most striking spokesman for the new direction of Russian economic thought was the outstanding statesman A.L. Ordyn-Nashchekin (1605-1680). The Novotrade Charter of 1667, published by him, was a major legislative act regulating trade duties. The new trade charter is permeated with the ideas of mercantilism, the desire to attract and retain precious metals to the country, patronage of domestic trade and merchants. With the coming to power of Peter I, various reforms began that covered the state apparatus, the army and economic life. Moreover, since the reign of Peter the Great, big business has taken a clear orientation towards the military-industrial complex, and this orientation has turned into a strong national tradition over the course of three centuries. These Russian features are reflected in the views of the first Russian economist I.T. Pososhkov (1652-1726), whose views represent peculiar combination ideas, both classical political economy and mercantilism. Mercantilists defended the national market, supported domestic trade and actively intervened by the state in economic life, believing that "the policy of the ruler is the main force." But the views of the representatives of this school are heterogeneous. Spanish mercantilists advocated a ban on the export of gold from Spain and restrictions on the import of foreign goods. The French - put the problem of ensuring a positive trade balance in the spotlight. Mercantilism in Russia had its own characteristics related to the fact that foreign trade played a much smaller role for the development of the economy of our country than in Western Europe. And Pososhkov was primarily interested not in issues of ensuring an active trade balance, but in issues of development national economy. The title of his main work, An Inquiry into Poverty and Wealth (1724), is very reminiscent of the title of A. Smith's work, An Inquiry into the Nature and Causes of the Wealth of Nations. And this similarity is not only superficial. Both works consider the main problems of political economy: the essence and forms of the nation's wealth, the mechanisms of its growth. Like A. Smith, I.T. Pososhkov saw the source of national wealth in labor, while for him both agricultural and industrial labor are equally important. He was alien to the neglect of agriculture, characteristic of the mercantilists of the West. Pososhkov saw the social significance of labor in giving "profit", which in fact represents for him the difference between price and production costs.
At the same time, Pososhkov's mercantilism is clearly manifested in the characterization of trade. He believed that "every kingdom is enriched by merchants", defended its monopoly. Completely in line with mercantilist ideas, Pososhkov proposed regulating foreign trade: raising export prices, restricting foreign operations to only a number of ports, prohibiting the import of luxury goods, and so on. However, he was alien to the one-sidedness of the "balance of trade" concept. Unlike Western European mercantilists, Pososhkov did not equate wealth with money. Moreover, in general, he condemned monetary wealth as a symbol of greed and contrary to the moral foundations of society, and this is another feature of Russian mercantilism. Like A. Smith, Pososhkov saw the wealth of peoples not in money, but in material wealth acquired exclusively by labor, and therefore considered it more useful to increase material wealth than money. In interpreting money, Pososhkov developed a nominalistic concept (which again is in the tradition of classical political economy), believing that their rate is determined only by the royal stamp. He considers money as a value created by law, a means for creating a certain legal order. True, this applies only to internal circulation, while in the sphere of foreign trade, of course, money must be valuable. Considering trade and production as one economic complex and seeing in them the source of the wealth of the nation, Pososhkov advocated the all-round development of domestic trade, industry, agriculture, strengthening the economic power of Russia and its independence. Like all representatives of mercantilism, he is a supporter of strong state power. At the same time, recognizing the self-sufficient role of the state in the economy, in his essay Pososhkov says that the state cannot be considered rich if money is collected there by any means to the treasury, and draws a clear distinction between the wealth of the treasury and the wealth of the people. In order to increase the latter, in his opinion, good government of the country, good laws, and a proper court are necessary. He wrote about "truth" as a necessary prerequisite for the possibility of eliminating poverty and increasing wealth in the country. In search of truth and justice, I.T. Pososhkov shows significant radicalism, condemning the poll tax (as it does not take into account the difference in the economic situation of the payers), the growth of quitrents and corvee, offering to fix the duties of the peasants when allocating them with land. Added to this are proposals for the delimitation of peasant and landlord lands, the reduction of taxes, the establishment of an equal court for all estates, and so on. Perhaps it was for these proposals that Pososhkov was arrested and imprisoned in the Peter and Paul Fortress, where he died.
Mercantilist concept
Remark 1
In such an economic doctrine as mercantilism, the views of mercantilists were directed primarily to money (gold and silver) as a symbol of the wealth of the country and nation. Therefore, countries sought to increase their own wealth, namely money supply in the country.
For this, protectionist measures were used (high duties, encouragement of domestic monopolies), regulation of foreign trade, and restrictions on the export of the country's currency. It was believed that in order to increase wealth, it is necessary to reduce and restrain the import of products into the country. Therefore, exports were encouraged and subsidized.
The state provided support to national producers of goods with high added value. However, in order to contain the growth of workers' wages, the mercantilists considered it possible to increase the country's population in order to curb the growth of wages. This was due to the lack of theoretical knowledge in economics.
There are two stages in economics: early and late.
The first stage was characterized by monetarism and the desire to increase the money supply in the interior of the country.
At a later stage, the policy of an active trade balance began to prevail, that is, the predominance of exports over imports was considered optimal. The state sought to maximize the possible increase in exports and the minimum level of imports.
The main principles of the mercantilists were based on the following:
- expansion of economic ties between countries;
- the main wealth is money, that is, gold and silver;
- high import duties;
- protectionism;
- restrictions on the export of currency from the country;
- import restrictions;
- export promotion;
- promoting the development of manufactories, national production, the growth of output and export of industrial goods;
- resale of goods from one country to another;
- imports are allowed only with an active trade balance;
- at a later stage, the concept of the balance of money shifts to the concept of the balance of trade.
Physiocrats concept
In this economic doctrine, the main wealth is not cash, but the products of the earth. That is, agriculture was considered the main thing. Trade, as well as industry, had to go by the wayside. Agriculture was supposed to be the source of the wealth of the population. This was established by natural and religious laws.
Wealth appears only when there is ground rent in the form of natural. That is, the difference between the products that appear in the course of agriculture, and the products that were used to produce such products, must be constantly reproduced. Only the class of landowners was considered a manufacturing class.
That is, agriculture was considered more profitable, favorable, worthy for a person.
The basic principles of the Physiocrats were based on the following:
- wealth is agricultural products;
- the source of wealth is the labor of the population, which is employed in agriculture;
- denial of the principles of mercantilism;
- management of economic processes is considered redundant, and the processes in the economy should go naturally, in a natural way.
Let us consider a comparison of data from opposite schools in the theory of economic doctrines.
After reading this chapter, you will know.
- what is mercantilism as the first pan-European economic doctrine;
- main features of early and late mercantilism;
- the difference in the views of representatives of monetarism and mature mercantilism;
- the importance of mercantilism for the development of economic science;
- theoretical ideas of the representatives of the school of physicrats.
Basic concepts: early mercantilism, monetarism, late
mercantilism, natural wealth, artificial wealth, active monetary balance, trading profits, political Economy, profit from alienation, "damage to money", metal theory of money, "Gresham's law", quantity theory of money, national wealth, colbertism, dumping, protectionism, manufacturing capitalism, the concept of "natural law", trade surplus, social class, general economic equilibrium, economic liberalism, "Reversal Trade Charter", "Politics" ("Political Thoughts"), seigniorage.
The economic doctrine of the mercantilists
Characteristics of the era
From the 14th century in the countries of Western Europe, feudalism is entering a stage of decomposition, there is a rapid development of market relations, which is expressed in the displacement of natural economy by commodity-money economy. Trade becomes the most important branch of the economy, the role of money as a means of circulation is growing. Wealth is more and more identified not with the totality of natural goods, not with feudal privileges, as before, but with money. As K. Marx noted, both individuals and the state are covered by the "universal thirst for money." The strength of the state is now measured by its monetary resources, and the stability of economic life directly depends on the stability of monetary circulation.
characteristic economic phenomenon for the countries of Western Europe in the XIV-XVI centuries. there was a growing shortage of money in circulation and a simultaneous increase in distrust of the "spoiled" coin, which repeatedly caused the economic and political instability of society. The development of foreign and domestic trade ran into a real obstacle - the lack of specie due to the lack of precious metals. In England, as early as the law of 1381, the export of money outside its borders was prohibited, and debts to foreign merchants were to be covered by English goods. The export of English coins was hindered by the adopted in the XV-XVI centuries. The "Spending Laws" obligated foreign merchants to spend the proceeds from the sale of their goods on the purchase of English goods. In fact, this meant a ban on the export of coins abroad. English and foreign merchants, upon entering the country, were obliged to exchange the available foreign money for English.
In such a situation, the countries that had deposits of precious metals were in the most favorable conditions. In the XIV century. Spain and Portugal, which had the largest sources and reserves of gold and silver, came forward to the role of European economic leaders. The rulers of these countries sought by all means to preserve and increase the reserves of precious metals. Up until the 17th century. Spain, under threat of death, forbade their export from the country.
Late 15th - early 16th century characterized by a stormy economic development European states: England, Holland, France, i.e. those countries that were located on the coast of the Atlantic Ocean. Great geographical discoveries are changing the nature of trade relations, their directions, maritime trade between continents is rapidly developing. A flow of precious metals from South America rushes to European countries. The pursuit of European countries for gold, the desire to expand trade with the East and America became the result of the development of a commodity economy, which was formed in the depths of natural economy. A powerful impetus for its emergence was the separation of the city from the countryside, crafts from agriculture.
The development of a commodity economy, the expansion of exchange contribute to significant changes in the agricultural sector
England and later France. In agriculture, the transition from subsistence to monetary economy is taking place, serf labor is being replaced by hired labor, lease relations are developing, and large-scale farming is emerging.
Commercial capital played an important role in the disintegration of feudal relations. In a number of European countries, the process of primitive capital accumulation began, accompanied by an increase in the political influence of merchant and usurer's capital, the source of growth of which was in the sphere of circulation.
Mercantilists- were convinced that only money (gold and silver) and treasures represent the wealth of the nation, the state. The increase of wealth, they believed, required protectionist measures to regulate foreign trade and that exports should be encouraged, imports curbed, and national industry should be supported in every possible way. Along with this, due to the lack of proper theoretical knowledge in the field of population, the mercantilists considered it possible to maintain low level wages due to population growth (labor supply).
The wealth concept of early and late mercantilism
In the economic literature, two stages are usually distinguished in the development of mercantilism - early and late. The main criterion for such a division is the "justification" of ways (means) to achieve an active trade balance, i.e. positive balance in foreign trade.
Early mercantilism
Early mercantilism arose even before the great geographical discoveries and was relevant until the middle of the 15th century! in. At this stage, trade relations between the countries were poorly developed and had an episodic character. To achieve a positive balance in foreign trade, the early mercantilists considered it expedient:
set the highest possible prices for exported goods;
· limit the import of goods in every possible way;
· to prevent the export of gold and silver from the country (monetary wealth was identified with them).
Therefore, the theory of monetarism of the early mercantilists can be regarded as a theory of "balance of money".
Early mercantilism was characterized by an understanding of the fallacy of the concept of the nominalistic theory of money, dating back to ancient times, including the works of the ancient Greek philosopher Aristotle (4th century BC). Arguing in this way, nominalists denied not only the commodity nature of money, but also their connection with precious metals.
However, during early mercantilism, as in the Middle Ages, the government defaced the national coin, reducing its value and weight in the hope of stimulating foreign merchants to exchange their money for native ones and buy more goods. The transformation of money into a conventional sign, a fixed ratio of gold and silver money in circulation (the system of bimetallism) was justified both by the facts of the circulation of defective money, and by the erroneous statement that gold and silver are money due to their natural properties, performing the functions of a measure of value, treasure and world money.
Late mercantilism
Late mercantilism covers the period from the second half of the 16th century. to the second half of the 17th century, although some of its elements continued to manifest themselves in the 18th century. At this stage, trade relations between countries become developed and regular, which was largely due to the encouragement of the development of national industry and trade by the state. To achieve an active trade balance, recommendations were put forward:
· conquer foreign markets thanks to relatively cheap goods (ie low prices), as well as resale of goods from some countries in other countries;
· to allow the import of goods (except luxury items) while maintaining an active trade balance in the country;
export gold and silver for the implementation of profitable trade deals, mediation, i.e. to increase their mass in the country and maintain an active trade balance.
Late mercantilists shifted the focus of monetarist theory by opposing the early mercantilists' idea of a "balance of money" with the idea of a "balance of trade".
Recognizing the commodity essence of money, the later mercantilists still saw their value in the natural properties of gold and silver. However, it was they who led to the transition from the metallic to the quantitative theory of money and the system of monometallism. And if the early mercantilists considered the function of accumulation to be the defining function of money, then the later ones considered the function of a medium of circulation.
The emergence of the quantity theory of money became, as it were, a natural reaction to the “price revolution” of the 16th century, caused by a huge influx of gold and silver from the New World to Europe and showing the causal relationship between changes in the amount of money and the prices of goods. According to the late mercantilists, the value of money is inversely related to its quantity, and the level of prices for goods is directly proportional to the quantity of money. They tendentiously believed that an increase in the supply of money, an increase in the demand for it, stimulates trade.
Physiocrats- considered wealth not money, but "products of the earth." Agricultural production, and not trade and industry, from their point of view, is the source of the wealth of society, which is determined by the "natural" law established by God himself.
For the physiocrats, the wealth of a nation increases if there is a constant and constantly reproduced difference between the products that are produced in agriculture and the products that were used to produce this product during the year, i.e. so-called land rent in kind. Quesnay called this difference "pure product" and considered the only "productive class" in society to be the class of landowners. Quesnay argued that "among all the means for acquiring property, there is not one that would be better for a person, more profitable, more pleasant and more decent, even more worthy for a free person than agriculture."
The main work of F. Quesnay "The Economic Table" (1758) contains a scheme for dividing society into three main classes:
the productive class of farmers;
· Class landowners;
· "barren class" - people employed not in agriculture.
All three social classes are in a certain economic interaction. Through the mechanism of buying and selling, the process of distribution and redistribution of the “net product” takes place and the necessary prerequisites are created for the constant renewal production process, i.e. reproduction. Quesnay sees this process as consisting of the following stages:
Farmers rent land for money from landowners and grow crops on it;
Land owners buy products from farmers and industrial products from artisans, as a result of which part of the money they receive for renting land goes to farmers and artisans;
Farmers buy manufactured goods from industrialists;
· Industrialists buy agricultural goods from farmers.
· As a result, farmers again receive money to rent land.
Thus, the economic process was presented to the physiocrats as a natural harmony, which can even be described strictly mathematically. Subsequently, this idea was further developed in various attempts to construct mathematical models production and distribution of products and in modern economics exists in the form of numerous industry and product balances, intersectoral models, formalized versions of theories macroeconomic equilibrium and economic growth.
An integral part of the economic theory of physiocracy is the idea of government non-intervention in the natural course economic life. Based on the scheme proposed by F. Quesnay, there is simply no room for any conscious, active policy of governments * ”in the field of economics. More precisely, according to Quesnay, the state must establish such laws that would correspond to the "natural laws" of nature, and on this economic functions states can be considered exhausted.
![Bookmark and Share](https://s7.addthis.com/static/btn/v2/lg-share-en.gif)