Physiocracy, Growth of physiocracy, net-product, Factors responsible for the growth of physiocrats, fundamental principles and policies of Physiocrats, History of Economic thought

Physiocracy (Physiocrats)

PHYSIOCRATS

The factors responsible for the growth of physiocracy or physiocrats

There are many factors which were responsible for the growth of physiocracy in French. Among them, the socio-economic conditions prevailing in France were largely responsible for the rise physiocracy in that country.

1. The mercantilist Policies: during the 16^th and 17^th century, the economy of France was under the dominance of mercantilists policies. Industry and trade were given preference at the cause of agriculture. During the beginning of 18^th century, mercantilism was already during and its policies were severely criticized, people were in search for an alternative system. People eagerly wanted a system of socio-economic order which can take the place of mercantilism.

2. Continuous neglect of agriculture: The agricultural economy of France became stagnant for quite a long time. Colbertism was taking partly responsible for this. Industrial development was taking place in France at the cause of agriculture. The investment was diverted from agriculture to manufactures and the changing tastes for manufactures tended to lower the dames to demand agricultural production and also its place lower price of agricultural perverted capital accumulation in agriculture.

3. The emergence of a group of ambitious agricultural: The eco of agriculture revolution in England was reaching the people of France, thus making them conscious of the profitableness of large-scale farming and agricultural improvements. The writers like Germany, Mirabeau and Montesque were agricultural advancement.

4. Extravagant court of life: The life of political administrates was very luxurious and corrupt. There were too much wastage and extravagance. The king believed in the authoritarian maximum.

5. Wars: Long and costly wars against Holland during the same period only added fuel to the fire and further increased partly of the country.

6. Heavy taxes: In order to replenish state treasury, heavy taxes were imposed these taxes were regressive in charter and discriminatory in practice. Most of the burden of tax was borne by the poor peasants and cultivators whereas novels and clergyman were exempted from taxation.

7. Subjective forces: A silent revolution was on the way and the prevailing conditions of poverty, oppression and un-justice were being discussed and disappeared by the leading thinkers of the time. The political writers were thinking of the simple and more rational lows based on general principles of justice. The natural sciences were advancing and then was a tendency to apply their method to philosophy and socio-economic problems.

Basic Principles and policies of Physiocracy

The following are the fundamental principles and policies of physiocracy;

(i) Agriculture is the only productive occupation.

(ii) Industry and trade are sterile occupations.

(iii) Agriculture produces the net product(surplus)

(iv) There is a natural order which makes life happy and meaningful.

(v) The individual should get maximum liberty and state action should be limited to the maximum.

(vi) Trade is a necessary evil and there should be free trade.

(vii) Value depends on utility wealth has value. Value and price are the same things.

(viii) The private initiative must be encouraged.

Net-product of physiocrats or primacy of agriculture in physiocrats

The concept of net product as propounded by the physiocrats was an important doctrine, relating to their philosophy of nature. The physiocrats recognized that agriculture is the only sector which yield net product or surplus produce. In other words, it is only in agriculture, that the wealth produced is greater than wealth consumed. Net product is defined as the surplus which is obtained by subtracting the input from the amount of total output produced. The physiocrats believed that the agriculture alone was productive and suppose to produce net product or surplus. Quesney regarded “ agriculture as the source of all wealth and therefore it should be encouraged.”

The physiocrats had divided the society into two classes- productive and unproductive or sterile. The landowners and farmers belong to the productive class in the society as they were the producers of surplus or net product. The traders, manufacturers, who didn’t produce anything were merely sterile or unproductive.

Physiocrats had firm faith in the natural order. They always recognized net product or agricultural surplus as the important means of production and economic development, in the country, resulting from the super-kindness and generosity of nature. Later on, the concept of net product provided a base to the various theories propounded by Adam Smith and Thomas Robert Malthus.