Question

Compare the list of major tenets of the classical school with those of the physiocratic school. Which are similar? Which are dissimilar? Based on this comparison, would you characterize the physiocrats as forerunners to the classical school? Explain.

Answer 1

The school of physiocracy started it journey from France in the eighteenth century mostly as a reaction to the protectionist regime of Louis XIV and subsequently Louis XV's huge defeat in the hands on English who were mostly following open market principles . During these regimes land tax (taille) was the principle source of government revenue thereby imposing huge burden on the agriculturalists. Physiocracy provided a theoretical backing to the back to the nature movement. Physiocracy was a French intellectual movement (1750-1780) which was mostly influenced by the work of Francois Quesnay whose theoretical formulation was widely adopted by other physiocrats (PC) .

The main contribution of the PCs is to bring in the inter connectedness of different sectors and the dynamic element in the analysis of economy in their famous tableau economique .

Similarities : PC s largely supported minimal or no government intervention. Because they believed that a natural (and superior) order exists which should not be disturbed by governments. From this perspective they were closer to the classical political economy’s laissez fair policy .

Dissimilarities : However, their position critically diverged from that of classical political economy when it comes to analyzing the roles of agriculture and industry in the economic order. PC s assumed that only agriculture has a net contribution to the society.

They were the agriculturist class and were apprehensive of the policy changes that they expected during the industrial revolution . Industrial revolution saw the emergence of a new class – the bourgeois who would produce at a much larger scale and would need a global market. Hence, there was a need for a theoretical platform that would support laissez faire policy and price determination in the capitalist economy .