Physiocracy

18. century emerged and especially François Quesnay, Marquis de Mirabeau, Mercier de la Rivière, Dupont de Nemours, Vincent Gournay has defended such scientists. This concept of French origin means natural order. They accepted this natural order as a divine order and accordingly, the producers and consumers have the freedom to act in their own interests. It is based on the principles of private ownership and free enterprise.

He sees the source of wealth in the form of production. They advocated agricultural capitalism because agriculture was important in France. Therefore, the industrial revolution has not been seen. While the effects of the guild system are observed, taxes are in a system similar to the tax farming system. While they state that production will be through substance creation, industry and commerce do not comply with this, and they only make changes on substances. Therefore, it is inefficient.

Basically based on the laws of God; it is universal, unchangeable and best. And people have the free will to do whatever they want under the law of God. Their economic relations give importance to freedom and individuality. They provide a balanced system of production and money supply.

Basic Principles of Physiocracy

It is like there is a natural order in the universe as well as in economics. The minimum requirement of the state is emphasized. It accepts a single tax system.

Mistakes of Physiocracy

As a result of this process, the decrease in the importance of agriculture and the development of the country emerged as a system of industry and workers rather than capitalist agriculture.

Contributions of Physiocracy in Economics

It forms the basis for economics to be a science that includes the social field. It has been the pioneer of economic tables and national accounting systems. With the invention of the Law on Declining Yields, concepts related to the reflection and effect of tax were mentioned. It is an economic current that is considered the founder of economic liberalism.

François Quesnay

Although he was the founder of the school of physiocracy, the economic picture described the cyclical circulation of goods and money in an ideal free economy.

Economic Table; Although the basis of wealth is seen as agricultural resources, there are three classes. These are landowners, agricultural capitalists and vicious class shape. There is no growth or net capital accumulation in the model. This economy is closed to the outside and explains the inter-industry connection through the table. They make two suggestions. The first argues that the tax should be uniform and should be collected from landowners. Secondly, by opening agriculture to foreign trade, grain prices increase and farmers' situation is improving.