In England, Locke, in his Essay on Civil Government' (b. xi., 40 43), argued at leugth to prove that "labour is the constituent principle of value." There is something to the same purpose' in Hobbes's Leviathan' (ch. 24). But these were incidental remarks, and not professed investigations on the subject of political economy.
In a tract published in 1677, entitled England% Great Happiness,' the notion of the balance of trade is examined and its fallacy exposed. [BALANCE OF TRADE.] Sir Dudley North wrote Discourses 011 Trade,' 1691, which contain more clear and comprehensive notions on trade than had yet been published. Among other propositions, ho lays it down as a maxim that " there can be no trade unprofitable to the public ; for if any prove so, men soon leave it off, and wherever the traders thrive, the public, of which they are a part, thrive also." It is worthy of notice, by way of contrast, that Montesquieu iu the following century wrote a chapter entitled To what Nations Com merce is 'prejudicial.' (` Esprit des Lois,' b. xx., ch. 21.) In 1696 Davenant wrote on the Commerce and Revenue of England? In the next century Sir Matthew Decker wrote an Essay on the Causes of the Decline of Foreign Trade,' 1744.
A change of opinion was in the meantime taking place on the Cou tinent with respect to the so-called "mercantile system." Francois Quesnay, born in 1694, a medical man by profession, and surgeon to Louis XV., being struck by the distressed condition of the French peasantry, endeavoured to draw the attention of the government towards relieving that numerous and ill-used class of people. Ho proposed the abolition of custom-houses between province and province, the free circulation of corn throughout the kingdom, the suppreasiou of the corvmes, and other similar reforins, which were effected after his death by Turgot. Quesnay went further : he assumed as a principle that the earth, or in other words, agriculture, was the only source of wealth, in opposition to Colbert's mercantile system, which fixed that source exclusively in trade. Quesnay allowed that mauufactures and merchants were highly useful, but he contended that as they realised no net surplus in the shape of rent, they did not add any greater value to the raw material of the commodities which they manufactured or carried from place to place, than was just equivalent to the value of the capital or stock consumed by them during the time that they were engaged in those operations. He divided society into three classes : 1, a productive class, consisting of farmers and agricultural labourers, who subsist on a portion of the produce of the land, reserved to them as wages of labour and as a reasonable profit on their capital ; 2, a pro prietary class, namely, those who live on the rent of the land, or the net surplus produce raised by the cultivators, after the necessary expenses have been deducted; 3, an unproductive class, consisting of manufacturers, merchants, servants, and handicraftsmen, "whose labour, though useful, adds nothing to the national wealth, and who subsist entirely on the wages paid to them by the other two classes." (Quesnay, Physiocratie, ou Constitution Naturelle des Gouverne mens; 1768.) As a corollary to these positions, Quesnay and his disciples concluded that all taxes ought to fall upon the land.
Quesnay is considered as the head of the school called the school of the " Economistes," which reckoned amongst its members the Marquis de 31irabeau, father of the celebrated 3Iirabeau, Mercier de in Riviere, Dupont de Niimours, Condorcet, Raynal, Turgot, Necker, and other distinguished men.
Quesuay's principal work on political economy is the l'hysiocratie' already mentioned; but he published other tracts, especially an article ' Sur les Grains,' which was inserted in the Encyclop4die; and iu which he advocates the same principles. Though Quesnay considered agriculture as the only source of wealth, he did not advocate any ex clusive protection for it, but rather a principle of freedom in all branches of trade. The " Economistes" originated the " Cadastre," which was a survey and valuation of all real property, made by order of the government, for the purpose of assessing the " contribution fonciere," or property tax, which they considered as the only legitimate tax. And this principle has prevailed in France and other continental countries, where even now the tax on land and houses forms the main source of the public revenue, being from 20 to 30 per cent. on the rent In Italy, Antonio Bandini of Siena had asserted the fundamental principle of the " Economistee," long before Queenay, in a work which however was not published till 1775. Bendini wrote him ' Discorso Economic° ' in 1737, with a view of drawing the attention of the Tuscan government to the desolate condition of that vast tract of country called the 3Iarenuna of Siena. Bimdini advocated freedom of trade in agricultural produce, and recommended the removal of all restrictions upon importation and exportation ; he urged the ex pediency of giving to the cultivators of the soil an interest in the land, by the grant of long lames; and lastly lie recommended the removal of the numerous vexatious, taxes, and the substitution of a single tax upon laud, not excepting ecclesiastical and other privileged property. A MS. copy of Randini'a book was presented to the grand-duke Francis of Lorraine, who however, being soon after elected emperor of Germany, and having removed to Vienna. could not attend to the affairs of the Itaremma. But his son Leopold, on coming to the government of Tuscany, consulted Bandini's work, and put into execution the plan therein proposed. The Maremma of Siena assumed a new life, and its population nearly trebled in the course of half a century. • Antonio Broggia of Naples, a merchant by profession, wrote a treatise on taxation, Sul Tributi,' in which he admits that there are three sources of wealth, agriculture, handicraft or manufactures, and com merce. He does not consider the tax on land as the only legitimate tax, but proposes three sorts of taxation, land-tax, customs, and gabelle or excise. He says that in a great commercial country the customs and excise, or indirect tax, ought to be preferred, but in an agricultural country like Naples the tax on land must be the principal source of revenue. He condemns taxes on capital and persons, licences and patents, horses and agricultural implements, as detrimental to industry, as well as the government monopolies of salt, tobacco, &c. The author, who belonged to the mercantile school, falls into the error of that school, in wishing to sell as much as possible to foreigners, and buy as little as possible from them.