History of Economic Thought. Activities of J. Turgot (the most important)

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History of Economic Thought. Activities of J. Turgot (the most important)

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28. ACTIVITIES OF J. TURGO

Jacques Turgot (1727-1781) occupies a special place among physiocrats. His economic theory reflects the process of the birth capitalist society within the framework of feudalism.

J. Turgot was born in France and, according to family tradition, graduated from the theological faculty of the Sorbonne, but became interested in economics.

Louis XV, having ascended the throne, appointed Turgot general controller of finance (August 1774). A staunch supporter of strong monarchical power, Turgot he was sure that with the support of the king he would be able to put his ideas into practice. He released Edict of Free Trade in Grain (September 13, 1774), which abolished restrictions in this area.

Turgot insisted on the abolition of the monopoly and privileges in the important French wine trade. He liquidated workshops, associations of artisans, which fettered the development of production; at the same time, unions of apprentices and workers were also prohibited.

They created a system of regular postal services and transportation. He also reformed taxation: road corvee was replaced by a cash collection, laid out for all classes.

Turgot planned to replace the old taxes with a general land tax. To distribute taxes locally, he was going to create a system of elected provincial assemblies.

Significant achievements of Turgot in the position of minister were the introduction of trade in grain and flour within the country; free import and duty-free export of grain from the kingdom; the abolition of craft workshops and guilds, etc.

Innovations Turgot accepted not all estates of France. They were rejected by the nobility and clergy (Turgot encroached on their privileges), as well as the poor, who suffered from speculation and a rise in the price of bread.

Main labor J. Turgot - "Reflections on the creation and distribution of wealth". In this book, following Quesnay and other physiocrats, he defended the principle of freedom of economic activity and shared their view of agriculture as the only source of surplus product. For the first time he singled out within the "agricultural class" and the "class of artisans" entrepreneurs and employees.

J. Turgot first formulated the so-called law of diminishing returns of soil, which reads: “Each additional investment of capital and labor in land produces a smaller effect compared to the previous investment, and after a certain limit, any additional effect becomes impossible.”

In general, teaching J. Turgot coincides with the teachings of the physiocrats. However, the following stand out: ideas:

1) income from capital is divided into costs for creating products and profit on capital (wages of the owner of capital, business income and land rent);

2) the exchange is mutually beneficial for both commodity owners, and therefore there is an equalization of the values of the exchanged goods;

3) the payment of loan interest is justified by the loss of income of the lender when granting a loan;

4) current prices in the market are formed taking into account supply and demand, being a criterion by which one can judge the excess or lack of capital.

12 May 1776 Turgot was dismissed and the reforms cancelled. His ideas were realized 15 years later during the French Revolution.

Author: Tatarnikov E.A.

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