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(fĭz`ēəkrăts'), school of French thinkers in the 18th cent. who evolved the first complete system of economics. They were also referred to simply as "the economists" or "the sect." The founder and leader of physiocracy was François QuesnayQuesnay, François
, 1694–1774, French economist, founder of the physiocratic school. A physician to Louis XV, he did not begin his economic studies until 1756, when he wrote the articles "Fermiers" [farmers] and "Grains" for the Encyclopédie.
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. His most ardent disciple, Victor de Mirabeau, was the author of the physiocratic tax doctrine; Pierre Samuel Du Pont de NemoursDu Pont de Nemours, Pierre Samuel
, 1739–1817, French economist, one of the physiocrats. Early in his career he attracted the attention of François Quesnay and edited the Journal de l'agriculture in 1765–66 and the
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 and Mercier de la Rivière elaborated on Quesnay's and Mirabeau's ideas. Among the antecedents of physiocracy the single-tax schemes of the marquis de Vauban and the sieur de BoisguilbertBoisguilbert, Pierre le Pesant, sieur de
, 1646–1714, French economist. A local official of Rouen after 1689, he proposed a radical alteration of the French fiscal system in order to revive the finances of the nearly bankrupt state.
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 and the free-trade ideas of Vincent de GournayGournay, Vincent de
, 1712–59, French economist, precursor of the physiocrats and of Adam Smith. A wealthy merchant, he was in government service as intendant of commerce from 1751 to 1758.
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 may be cited. However, Quesnay's original contribution, and the basis of the doctrine, was the axiom that all wealth originated with the land and that agriculture alone could increase and multiply wealth. Industry and commerce, according to the physiocrats, were basically sterile and could not add to the wealth created by the land. They did not advocate that industry and commerce be neglected in favor of agriculture, but they tried to prove that no economy could be healthy unless agriculture were given the fullest opportunity. Agricultural methods had to be scientifically improved, and—above all—fair prices had to be maintained for agricultural production; according to Quesnay's maxim, only abundance combined with high prices could create prosperity. This could be obtained only if the "economic law," which the physiocrats envisaged as being as immutable as the law of gravity, was allowed to act untrammeled. Absolute freedom of trade was necessary to stabilize prices at a fair level, and laissez faire was to restore the economic process to its natural course, from which all further benefits would flow. To tax anything but the land was futile because only the land produced wealth and because manufacturers and traders pass their tax burden on to the farmer; only taxation at the very source of wealth was reasonable and economical—an argument not without charm for industrialists. However, the experiments of Baron TurgotTurgot, Anne Robert Jacques
, 1727–81, French economist, comptroller general of finances (1774–76). The son of a rich merchant, he showed precocious ability at school and at the Sorbonne.
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 and of Holy Roman Emperor Joseph IIJoseph II,
1741–90, Holy Roman emperor (1765–90), king of Bohemia and Hungary (1780–90), son of Maria Theresa and Holy Roman Emperor Francis I, whom he succeeded. He was the first emperor of the house of Hapsburg-Lorraine (see Hapsburg).
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, both somewhat influenced by the physiocrats, were failures—in part because of the unfavorable conditions in which they were carried out. Although physiocracy, because of its dogmatism, has become dead doctrine, it profoundly influenced Adam SmithSmith, Adam,
1723–90, Scottish economist, educated at Glasgow and Oxford. He became professor of moral philosophy at the Univ. of Glasgow in 1752, and while teaching there wrote his Theory of Moral Sentiments
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 (who even intended to dedicate his Wealth of Nations to Quesnay) and thus the entire classical school of economists. Henry GeorgeGeorge, Henry,
1839–97, American economist, founder of the single tax movement, b. Philadelphia. Of a poor family, his formal education was cut short at 14, and in 1857 he emigrated to California; there he worked at various occupations before turning to newspaper writing
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 virtually repeated the single-tax argument of Mirabeau. The physiocrats made no contribution to purely political thought except the idea of "legal despotism," by which the king and his government were to enforce the "economic laws of nature." Their fanaticism in economic doctrine was much ridiculed by their contemporaries, notably by Voltaire and by the Abbé Galiani.


See H. Higgs, The Physiocrats (1897, repr. 1963); M. Beer, An Inquiry into Physiocracy (1939, repr. 1966); R. L. Meek, The Economics of Physiocracy (1962).

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a school of thought in economic thinking in 18th-century France, especially associated with Quesnay (1694-1774) and Turgot (1727-81). The physiocrats criticized the doctrine of the MERCANTILISTS, who argued that wealth arose from EXCHANGE. In their own theory they gave priority to agricultural production and LAND as the source of economic accumulation. Their ideas were taken further by the CLASSICAL ECONOMISTS, who made production in general the source of wealth. Both classical economists and physiocrats argued for LAISSEZ FAIRE and free trade.
Collins Dictionary of Sociology, 3rd ed. © HarperCollins Publishers 2000
The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.



members of a school of classical bourgeois political economy that arose in France during the mid-18th century and that constituted a reaction to mercantilism. The founder of the school was F. Quesnay, and its prominent members included A. R. J. Turgot, the Marquis de Mirabeau, G. F. Le Trosne, P. Mercier de la Riviere, and P. S. Du Pont de Nemours. The theories of the Physiocrats were also developed in Italy, Great Britain, Germany, Sweden, and other countries.

The Physiocratic school took shape amid a growing crisis in the feudal system and an economic decline in Prerevolutionary France. Subjecting mercantilism to criticism, the Physiocrats considered that the government’s attention should be directed not at the development of trade and the accumulation of money but rather at the creation of an abundance of the products of the land, which, according to their opinion, contained the true prosperity of a nation. The Physiocrats shifted the study of the derivation of surplus value from circulation to production and thereby laid the foundation for an analysis of capitalist production. However, they limited production to agriculture. Like W. Petty, the Physiocrats adhered in political economy to the method of the natural sciences. Recognizing the objective reality of the external world, they regarded society as a natural physical phenomenon that develops in accordance with the laws of the natural order. The Physiocrats, however, did not advance to the position of materialism and atheism adopted by their contemporaries, the French Enlightenment thinkers of the 18th century. The laws of the natural order, established, in their opinion, by god, manifest themselves through the positive laws created by the supreme state authority.

While recognizing the objectivity of economic categories, the Physiocrats approached the capitalist system in an unhistorical way; they regarded it as natural and eternal. Assuming that surplus value is created only in agriculture, they recognized land rent as its only source. The surplus of consumer values produced in excess of that used by the consumers in the process of production was called by the Physiocrats net product. Proceeding from the erroneous naturalistic interpretation of the net product, which represented essentially the surplus value, the Physiocrats allowed a dual approach in analyzing net product: on the one hand, treating it in a feudal vein—as derived from nature and a relationship to the land—and on the other hand, interpreting it as a genuine economic category, freed from feudal constraints. Consequently, contradictions were introduced in the Physiocratic system: the feudal appearance of the system was combined with its bourgeois essence.

Basing their thought on the correct position that labor is productive only if it produces surplus value, the Physiocrats, however, considered only agricultural labor as productive. They divided society into three classes: the productive class, whose members create net product (including only agricultural toilers), the proprietary class, which receives land rents (including landowners, sovereigns, and those who received tithes), and the sterile class, which includes citizens employed in services and types of labor other than agriculture. The Physiocrats’ theory of classes ignored the proletariat as an independent, genuinely productive class.

An essential contribution of the Physiocrats was that they provided, within the limits of the bourgeois viewpoint, an analysis of capital. The Physiocrats thoroughly analyzed the substantive components of capital, distinguishing between avances annuelles (payments for seeding, cultivation, etc.), avances foncières (payments for farm buildings, etc.), and avances primitives (payments for implements, animals, etc.). Such a division of capital, correctly conditioned by the means by which advances became a part of the value of the annual product, corresponds to the division into fixed assets and working capital, although the Physiocrats had no general concepts of these two forms of capital. The division into advances was applied by the Physiocrats only to productive capital, which they limited to capital invested in agriculture. The Physiocrats erroneously considered capital invested in industry as sterile, that is, as not creating any net product. The Physiocrats did not include money in any of the forms of advances. They lacked the concept of monetary capital. The Physiocrats asserted that money by itself was sterile, and they recognized only one function of money—as a means of circulation. They regarded the accumulation of money as harmful, inasmuch as that would remove money from circulation and deprive it of its sole, useful function—that of serving the exchange of commodities. The principal merit of the Physiocrats, in particular, Quesnay, is that they were the first to attempt to analyze social reproduction.

Despite the class and historical limitations of their views, the Physiocrats drew important conclusions concerning the characteristics of the capitalist method of production. By their criticism of contemporary structures, the Physiocrats demonstrated the economic untenability of the outmoded feudal system of economy. They thereby objectively participated along with the progressive thinkers of that period in the ideological preparation for the bourgeois revolution in France, as a result of which most of their program was implemented.


Marx, K. Kapital, vol. 2. In K. Marx and F. Engels, Soch., 2nd ed., vol. 24.
Marx, K. “Teoriia pribavochnoi stoimosti” (vol. 4 of Kapital), part 1. Ibid., vol. 26, part 1.
Quesnay, F. Izbr. ekonomicheskie proizvedeniia. Moscow, 1960. (Translated from French.)
Turgot, A. R. Izbr. ekonomicheskie proizvedeniia. Moscow, 1961. (Translated from French.)
Anikin, A. V. lunost’ nauki, [2nd ed.]. Moscow, 1975.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
The epistemological shift facilitated by Physiocracy was the movement from the sphere of exchange (which underpinned Mercantilist thought) to the sphere of production as the focus of economic enquiry.
He is best known for his initial opposition to Physiocracy in 1763-1765 and, since 1766, his active participation in that school of thought.
Later, in the term called transition term, Physiocracy developed and this prepared a basis for "Classical Liberalism" being the school or trend founded by Adam Smith.
Ronald Meek, Economics of Physiocracy: Essays and Translations (Cambridge: Harvard University Press), 70.
Hundert's book on Mandeville and the Enlightenment, Steven Kaplan's many works on physiocracy and politics in France, and so on.
(Ed.), The Economics of Physiocracy, Harvard University Press, Cambridge, MA, pp.
Econ., xii (1980); Martin Staum, `The Institute Economists: From Physiocracy to Entrepreneurial Capitalism', Hist, Polit.
Peter Groenewegen ("Marshall on Ricardo") criticizes Marshall's often misleading attributions to Ricardo; Izumi Hishiyama ("Physiocratic Dichotomy in Price Determination and its Ricardian Resolution") contends that Ricardo put an end to physiocracy when he showed that agricultural prices, like the prices of manufactured goods, are rooted in costs of production; Heinz D.
The methodology is in the traditions of 'input-output' and 'comparative statics' interpretations of Physiocracy, as exemplified by Phillips (1955), Meek (1963), and Eltis (1975a, 1975b).
Francois Quesnay (1694 - 1774) is considered to be the founder and leader of physiocracy, though many of his ideas are to be found in the writings of earlier French economists, such as Jean Claude Vincent, sieur de Gournay; Sebastien Vauban; and Pierre de Boisguilbert.
Then how could it become a place of prosperity and well-being in the agrarian society of ancient China, which forcibly implemented the policy of physiocracy and the restrictions on commerce?