Question

What are the key assumptions and policy prescriptions of the Physiocrats?

Answer 1

Physiocracy was an economic theory or set of theories developed in the 18th century by French economists , particularly by Francois Quesnay . They believed in the concept of natural order , net product and wealth circulation . The key assumptions were : only agriculture yeilds surplus in the economy , farmers are the productive class while manufacturers are the sterile one . Manufacturing creates no net product . Landowners or propietiers extract the net product as rents .

They advocated minimum interference of the government and believed in natural order of system . Improvement of agriculture can only generate more surplus . They advocated large population since larger population would mean higher consumption which will lead to generation of higher surplus . They were the first to give a theory on distribution of wealth . The process of wealth distribution from the agricultural class to other classes is described in the tablue economique .