physiocrats

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.