FISIOCRATI, FISIOCRAZIA. — Economic doctrine formulated in France by Francesco Quesnay, the founder of political economy as a systematic science and, at the same time, the founder of individualism in economic science, to which he gave precisely the name physiocracy, that is, “rule of nature” (from Greek φύσις = nature, χρῆσθο = I rule).
Physiocracy is not, strictly speaking, merely an economic theory, but also a part of the philosophy of the Enlightenment. Starting from the materialistic ideas of the period,
it teaches that economic and moral phenomena must be considered as facts of nature, just as physical phenomena and the laws governing them are regarded as laws of nature. The essential task of the State is to guarantee the security and rights of the individual. Among these is the natural economic right, which consists in the enjoyment of the things that the individual produces through his work, and hence in the right to existence. Another right is that of improving one’s condition as much as possible, in one’s economic interest. From the pursuit of this interest there arises a natural order, based on the laws of nature, in opposition to the historical order created by human beings. The necessary consequence is the principle that the individual must act freely. To the question of what economic activity is in accordance with nature, physiocracy teaches that work on the land is, according to the natural order, primary. Production of wealth, and in general the whole economy, is based solely on this, and especially on agriculture. It is not money, commerce, trade, and industry that are the sources of prosperity, but agriculture, which makes these other activities possible; by their nature, they do not produce, but merely change matter or place. Thus the class of peasants (at that time especially tenant farmers in relation to the great noble landowners) emerges as the truly economically productive class. Opposed to it are the class of “proprietors,” who devote themselves to politics, and the sterile class of merchants and industrialists. To these three active classes is added, as a passive class, that of wage-earning workers: this class possesses no economic activity in itself, since it is not made up of entrepreneurs but receives a fixed income (a wage); it therefore enters into consideration only as a consuming class and consequently must be particularly commended to the care of the government. Naturally, since agricultural labor is the source of all wealth, agriculture must be favored, and it can prosper only if grain prices remain high, because only in this case can it yield a high net product and thus pay high wages to the class of proprietors, industrialists, and workers. Therefore, all restrictions on the export of grain must be abolished. And since the soil is the sole source of wealth, it alone must bear the burden of taxes to the State, all the more so because any fiscal burden imposed on another class ultimately falls back upon the class of great landowners: hence arises the characteristic physiocratic concept of the land tax as the sole and direct tax. Indirect taxes cannot be admitted, since they hamper commerce and burden the people.
As can be seen, physiocracy has a twofold foundation. From the social and philosophical point of view, it rests on natural law; the sacred and eternal rights of the individual must not be infringed. Its other foundation lies in the concept of a natural course of economic and social life: since economic laws cannot contradict the natural laws of social coexistence, inasmuch as they themselves are laws of the natural order, following natural law—that is, one’s own interest—will lead to the development of economic life in the most natural, and therefore the best, manner.
The principal representatives of physiocracy, besides Quesnay, were Turgot, Badeau, Dupont de Nemours, Mercier de la Rivière, and Mirabeau the elder; it had some connection with Smith, and some of its ideas were derived from Cantillon.
all'economia politica, 7th ed., Milan, pp. 46–53; A. Fanfani, Storia delle dottrine economiche. Il naturalismo, Milan 1946, pp. 62–137; id., Mercantilismo e fisiocrazia, in Quest. di st. mod. edited by E. Rota, there 1948, pp. 463–83. On physiocracy in Italy, cf. L. Bulferetti, L'assolutismo illuminato in Italia, Milan 1944 (with the preceding bibliography); M. Petrocchi, Il tramonto della Repubblica di Venezia e l'assolutismo illuminato, Venice 1950, passim.