History of Economic Thought. Physiocrats (most important)

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History of Economic Thought. Physiocrats (most important)

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26. PHYSIOCRATS

Physiocracy (from gr. physis + kratos - "power of nature" - the direction of classical political economy in France, which assigned a central role in the economy to agricultural production. Physiocrats criticized mercantilism, believing that the attention of production should be paid not to the development of trade and the accumulation of money, but to the creation of an abundance of “products of the earth,” which, in their opinion, lies the true prosperity of the nation.

François Quesnay (1694-1774) - the founder of Physiocratism, the head of this school. He not only laid the foundations of the physiocratic school, but also formulated its theoretical and political program.

F. Quesnay - author "Economic table", which shows how the total annual product created in agriculture is distributed between classes: productive (persons employed in agriculture - farmers and rural workers); barren (persons employed in industry, as well as merchants) and owners (persons receiving rent - landowners and the king).

His research was continued by a prominent statesman of France second half of the 1727th century Jacques Turgot (1781-XNUMX) . Promoters of the ideas of physio-ocratism were also Dupont de Nemours, d'Alembert, V. Mirabeau, G. Letron and more

Physiocratism expressed the interests of a large capitalist farming.

The central ideas of the theory of physiocracy:

1) economic laws are natural, and deviation from them leads to disruption of the production process;"

2) source of wealth - sphere of production of material goods - agriculture. Only agricultural labor is productive, since it is nature and the earth that work;

3) industry was considered by the Physiocrats as a barren, unproductive sphere;

4) under pure product the difference between the sum of all goods and the costs of producing a product. This excess (pure product) is a unique gift of nature. Industrial labor only changes its form without increasing the size of the net product. Commercial activity was also considered fruitless.

Physiocrats analyzed the material components of capital, distinguishing between "annual advances", annual costs and "primary advances", representing a fund for organizing agricultural farming and spent immediately for many years to come.

"Initial advances" (expenses for agricultural equipment) correspond to fixed capital, and "annual advances" (annual expenditures for agricultural production) correspond to working capital.

Money were not assigned to any of the types of advances. For the Physiocrats, there was no concept of money capital, they argued that money in itself is sterile and recognized only one function of money as a means of exchange. The accumulation of money was considered harmful, since it withdraws money from circulation and deprives them of their only useful function - to serve as an exchange of goods.

Physiocrats gave definitions "initial advances" (fixed capital) is the cost of agricultural equipment and "annual advances" (working capital) is the annual cost of agricultural production.

Author: Tatarnikov E.A.

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