The Physiocrats were members of a French school of economic thought that flourished in the 18th Century, and can be thought of as some of the first modern economists. The three experts who talked about them on In Our Time were Richard Whatmore (University of Sussex), Joel Felix (University of Reading) and Helen Paul (University of Southampton). The programme not only looked at what their economic theory was, but also set it in the context of the politics of the age and looked at the influence it had in its turn on politics.
Someone trying to predict the future at the end of the 17th Century would’ve thought that France was the rising star and would go on to dominate politics across the world during the 18th Century. But this didn’t actually materialise – instead Britain began to rise in prominence. A lot of thought was put into the question of “what went wrong and how do we become great again?” during the mid-18th Century in France, and the Physiocrats were a part of this cultural soul searching.
The big idea of the Physiocrats was that all wealth was tied to agriculture. They divided the world into three classes – the producers (i.e. those who actually worked the farms), the sterile class (or commercial class) and the landowners. This was quite a change from the prior medieval division of people into aristocracy, clergy and “the rest”. It wasn’t, however, intended to change the social order – they still believed that the landowning class were entitled to the produce and labour of the producing class, as in the old feudal system. They saw the problem of France’s decline as being down to regulations messing up the divinely appointed natural economic system – basically if wheat and other agricultural produce was allowed to be freely traded within the country then they thought wealth would naturally increase.
There was a definite anti-British flavour to this theory as well. Relatives of British aristocrats might move into trade (rather than become clergy as was the “proper” idea) – and this was seen as something that detracted from a country’s wealth by the Physiocrats. I think the experts were suggesting that this belief was in part caused by not wanting to follow Britain’s lead in anything. Which was a shame for the Physiocrats long term aims – after all the British were about to kick start the Industrial Revolution and manufacturing was just about to take over the wealth creation role from agriculture.
One thing that set the Physiocrats’ ideas apart from previous ideas about economics was that they were a part of the Enlightenment mindset. They were approaching the problem of how to create and maintain wealth in a scientific fashion (although not entirely – as I mentioned above they saw their theory as divinely appointed). And they took inspiration from other sciences at the time – like seeing the circulation of the blood as akin to the circulation of wealth in the economy.
They were influential on later economic thought, in particular ideas about free trade – and Adam Smith was notably influenced by them. Another influence they had was probably even less to their tastes than influencing a British economist – the idea that the people who worked on the land were the actual producers of wealth fed into the French revolution.
When we started to listen to this programme I thought it was going to be awfully dull (economics isn’t a favourite subject of mine) but it turned out pretty interesting after all. The Physiocrats were a curious mix of trying to think about economics rationally, whilst being blinded by their political ideology.