Question

How does Quesnay’s Tableau Eonomique foreshadow the contemporary circular flow diagram?

Answer 1

An economic model which was developed by the French economist Quesnay, is known as Tableau economique in 1758 which formed the basis of the Physiocratic school of economics. Quesnay was of the opinion that wealth sources were not trade and industry.He argued that the real economic movers were agricultural surpluses which flowed in the economy in the form of rent ,wages.as well as purchases.There was  flow of cash between the 3 classes ie the proprietary class who were  landowners,the productive class ie laborers in agricultural sector,and the sterile class ie artisans and merchants.The flow began with the proprietary class because they were land owners and made their purchases from the other classes.The Tableau is not a simple 'circular flow diagram'.The diagram is broken in phases.In theTableau the farmer is in the left hand side, the landlord in the middle and the artisan in the right side.The exchanges that take place between the different sectors should be monetizedie goods should be exchanged for money . There is no barter ie exchange of goods for goods.There is fixed amount of money to carry the transactions.The difference between the tableau and circular flow diagram is that in the tableau with the monetary circuit,the simultaneous movement of goods and  services cannot exist as in circular flow diagram .As money is involved , the exchanges need to take place in sequence ie the exchanges must precede and follow one another.In circular flow diagrams a barter economy is assumed and so the time aspect and sequential element is not taken into consideration.