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1、 Chapter2 THEPHYSIOCRATICSCHOOL Introduction ThephysiocratsappearedinFrancetowardtheendofthemercantilistepoch Thebeginningofthisschoolcanbedatedto1756whenQuesnaypublishedhisfirstarticleoneconomicsintheGrandeEncyclope die Theschoolendedin1776whenTurgotlosthishighpositionintheFrenchgovernmentandSmithp
2、ublishedhisWealthofNations 2 1OVERVIEWOFTHEPHYSIOCRATSTheHistoricalBackgroundofthePhysiocraticSchoolPhysiocracywasareactiontomercantilismandtothefeudalcharacteristicsoftheoldregimeinFrance yetitcouldnotcompletelyescapethemedievalconceptsthatpervadedFrenchsociety Thedetailedgovernmentregulationofprod
3、uction evenspecifyingtherequiredthreadsperinchofcloth mayoncehavepromotedhighquality butitcertainlyimprisonedproductioninastraightjackerthatdidnotallowforexperimentation improvementofproductionmethods orchangingconsumertastes Frenchindustrywasretardedinitsdevelopmentbythelocalauthoritieswhoimposedin
4、ternaltolls taxes andtariffs therebyimpedingthemovementofgoods ForcenturiestheFrenchgovernmentandtheauthoritiesinthetownshadsubjectedthegraintradetoabewilderingmazeofregulations MajorTenetsofthePhysiocraticSchoolThemainprinciplesofthisschoolareasfollows 1 Naturalorder 2 Laissez faire laissez passer
5、3 Emphasisonagriculture 4 Taxationofthelandowner 5 Interrelatednessoftheeconomy WhomDidthePhysiocraticSchoolBenefitorSeektoBenefit Thepeasantsultimatelywouldgainfromtheideasofthephysiocratsbecauseonerousobligationstothelandownerswouldend Thephysiocratsespeciallyfavoredcapitalisticfarmsemployingwagel
6、aborandadvancedtechniques Thephysiocratstriedtoplacatethenobilitybygenuinelydefendingtheirrighttoownlandandreceiverent HowWasthePhysiocraticSchoolValid Useful orCorrectinItsTime Inpromotinglaissez faire thephysiocratswereopposingobstaclestocapitalis ticeconomicdevelopment TheyunwittinglypromotedtheF
7、renchRevolutionof1789 whichsweptawaythenumerousobstaclestoprogress WhichTenetsofthePhysiocraticSchoolBecameLastingContributions Severaloftheideasofthephysiocratsclearlywereincorrect Theschoolwaswrongtoconsiderindustryandtradeassterile ThephysiocratsextolledthecapitalisticfarmerasthekeyfigureinFrench
8、economicdevelopmentbutwerewrongontwocounts Nevertheless thephysiocratsmadeseverallastingcontributionstoeconomics 2 2FRANC OISQUESNAY 1694 1774 Franc oisQuesnaywasthefounderandleaderofthephysiocraticschool ToQuesnay societywasanalogoustothephysicalorganism Thecirculationofwealthandgoodsintheeconomywa
9、slikethecirculationofbloodinthebody HisfamousTableauEconomique constructedforthekingofFrancein1758andrevisedin1766 2 2FRANC OISQUESNAY 1694 1774 TableauEconomique 2 3ANNEROBERTJACQUESTURGOT 1727 1781 Introducedantifeudalandantimercantilistmeasuresinkeepingwithphysiocraticideas Freedomofinternalgrain
10、tradewasordered andguildsandprivilegedtradingcorporationswereabolished Turgot likeotherphysiocrats believedinanenlightenedabsolutism andhelookedtothekingtocarrythroughallreforms 2 3ANNEROBERTJACQUESTURGOT 1727 1781 InReflectionsontheFormationandtheDistributionofRiches writtenin1766 Turgotdevelopedat
11、heoryofwagesinwhichheheldthatcompetitionamongworkerslowersthewagetotheminimumsubsistencelevel Thiswasanearlystatementofwhatwaslatercalledthe ironlawofwages Turgot sgreatestcontributionintherealmofeconomictheorywasincorrectlypresentingthelawofdiminishingreturns ThisappearedinhisObservationsurunMe moiredeM deSaint Pe ravy probablywrittenin1767 2 3ANNEROBERTJACQUESTURGOT 1727 1781 ThankYouForListening
