PHYSIOCRATIC SCHOOL, the name of a group of French economists and philosophers. The heads of the school were Francois Quesnay (q.v.) and Jean Claude Marie Vincent, sieur de Gournay (1712-1759). The principles of the school had been put forward in 1755 by R. Cantillon, a French mer chant of Irish extraction (Essai sur la nature du commerce en general), but it was Quesnay and Gournay who gave them a sys tematic form, and made them the creed of a united group of thinkers and practical men, bent on carrying them into action. The members of the group called themselves les economistes, but it is more convenient, because unambiguous, to designate them by the name physiocrates (Gr. Oats nature, and K par ei.v to rule), invented by P. S. Dupont de Nemours (1739-1817).
The general political doctrine is as follows : Society is com posed of a number of individuals, all having the same natural rights. If all do not possess (as some members of the negative school maintained) equal capacities, each can at least best under stand his own interest, and is led by nature to follow it. The social union is really a contract between these individuals, the object of which is the limitation of the natural freedom of each just so far as it is inconsistent with the rights of the others. Government though necessary, is a necessary evil; and the gov erning power appointed by consent should be limited to the amount edf interference absolutely required to secure the fulfil ment of the contract. In the economic sphere this implies the right of the individual to such natural enjoyments as he can acquire by his labour. That labour, therefore, should be undis turbed and unfettered, and its fruits should be guaranteed to the possessor; in other words, property should be sacred. Each citizen must be allowed to make the most of his labour; and therefore freedom of exchange should be ensured, and compe tition in the market should be unrestricted, no monopolies or privileges being permitted to exist.
the well-being of the community and the possibility of its ad vance in civilization. The manufacturer merely gives a new form to the materials extracted from the earth; the higher value of the object, after it has passed through his hands, only represents the quantity of provisions and other materials used and consumed in its elaboration. Commerce does nothing more than transfer the wealth already existing from one hand to another; what the trading classes gain thereby is acquired at the cost of the nation, and it is desirable that its amount should be as small as possible. The occupations of the manufacturer and merchant, as well as the liberal professions, and every kind of personal service, are "useful" indeed, but they are "sterile," drawing their income, not from any fund which they themselves create, but from the super fluous earnings of the agriculturist. The revenue of the state, which must be derived altogether from this net product, ought to be raised in the most direct and simplest way—namely, by a single impost of the nature of a land tax.
The special doctrine relating to the exclusive productiveness of agriculture arose out of a confusion between "value" on the one hand and "matter and energy" on the other. A. Smith and others have shown that the attempt to fix the character of "sterility" on manufactures and commerce was founded in error. And the proposal of a single imp& territorial falls to the ground with the doctrine on which it was based. But such influence as the school exerted depended little, if at all, on these peculiar tenets, which indeed some of its members did not hold. The effective result of its teaching was mainly destructive. It con tinued in a more systematic form the efforts in favour of the freedom of industry already begun in England and France.