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to confound commercial dependence with political,' and it was not hard for jealousy and suspicion to convince them that their neighbours' gain could not at the same time be their own. We can understand too that in the days when governments did not understand the limits of their omnipotence they would feel bound to regulate the spirit of trading which seemed to be becoming a passion with their citizens to the detriment of their patriotism. This would seem to them the more imperative because trade is not the creation of any government, but is one of the "sponte acta" that have a life of their own. There was therefore an interference at

every point. Isolated writers, especially in England, expressed doubts about the wisdom of this interference; but it was not till the middle of the i8th century, when a great School of Economists arose in France, that both rulers and people were forced to pay some regard to the demand for freedom of trade. The demand was simply that what was spontaneous in its origin should be allowed to be spontaneous in its development.

II. This demand was first made (in connection with a system of doctrine) by the remarkable group of French writers, known in their own day as the “Economists,” and perhaps best known in ours as THE PHYSIOCRATS. They were not metaphysicians, but their system was a political philosophy conjoined with a political economy. Though they themselves kept up the conjunction, they were the means of establishing the position of political economy as a distinct branch of study.

With the Peace of Aix la Chapelle (1748), at the close of the war of the Austrian Succession, France entered on the period of political ferment which led up to the Revolution. In 1748 Montesquieu published his Spirit of the Laws. In 1753 Rousseau printed his Discourse on Inequality among Men, and in 1762 his Emile and his Social Contract. Throughout the century the increasing financial difficulties of the French monarchy had made a brisk market for writings on taxation and finance.

Vauban's Dîme Royale and Boisguillebert's Détail de

1 Cf. List's idea of a “National Political Economy," and Fichte's of a "closed commercial State.”

la France had appeared in the reign of the Grand Monarque (1707); and the projects of John Law, which led to an active discussion on currency, banking and finance, were early in the reign of Louis XV.

But even in Montesquieu's financial chapters there was no systematic or logical economical doctrine. Cantillon (Essai, 1755) may have furnished to the Physiocrats one, if not more, of their leading ideas; but Cantillon shared the fate of other anticipators. It was reserved to the Physiocrats to carry on both the financial and the philosophical lines of discussion in the light of principles, from which they professed to deduce at once an economical and a political system.

The pioneer of the new doctrines was Quesnay, the physician of Madame de Pompadour. His articles in the Encyclopédie of D'Alembert and Diderot on “Fermier” and “Grains,” contain a sketch of the physiocratic principles. " Political Economy” remained, in the pages of the Encyclopédie, a theory of political philosophy. Rousseau, who is the writer of the article so headed (Economie politique, 1755), discusses the relation of the State to its members, in the manner of his maturer work on the “Social Contract " (1762), and with little or no reference to what we should now call economical matters proper.” But in the articles of Quesnay, as well as in the later writings of himself, Gournay, Mercier de la Rivière, Dupont, and the elder Mirabeau, the economical element bulks at as largely as the political. Turgot, a greater personality than any of them, is not to be reckoned among the physiocrats ; but he in turn influences them and is influenced by them. Their power over public opinion seems to last with his life, and to cease at his death (1781). When their doctrines were criticised by Adam

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1 Espinas, Histoire des doctrines écon., 1892, pp. 179-197, gives a good account of Cantillon. See also Mr. H. Higgs, Quart. Journ. of Ec., July, 1892.

According to a quotation given by Oncken, Der ältere Mirabeau (Berne, 1886), p. 41, Mirabeau at a later time tried hard to convert him, but wrung from him only a cry for mercy: “I am an old man. Send me no more books!”

3 We should need to add Le Trosne, St. Péravy, Vauvillers, Roubaud, Baudeau, to make the list of leading writers more nearly complete.

Smith in 1776, Quesnay had been dead two years, and the influence of the School was already beginning to wane. It was Turgot who defended them (with some reservations) against the charge of being systematic (as if that were a fault), by saying, “Every thinking man has a system. They presented a “body of doctrine defined and complete, which clearly lays down the natural rights of man, the natural order of Society, and the natural laws most advantageous to men united in a society” (Dupont; see Schelle, Dupont (1888), p. 44). We have now to see what that system was, and what permanent service it has rendered to economics and philosophy.

The consumption (says Quesnay ?) which is most profitable for the sovereign, and brings greatest happiness to the people, is “that general consumption which satisfies the wants of life." And this does not mean such provision as will barely keep soul and body together. No one, if he can help it, will drink only water, and wear only rags, and eat the worst bread. “ All men try by their labour to procure good food and good clothes.”3

It is not good policy to keep people poor in order that their poverty may spur them to industry; wealth is a much better incitement, for it has hope in it.*

This might be a general maxim of all economists; but in the hands of Quesnay and his followers it had a special application. Clear revenues are the produce of land and of men.

Without the labour of men land has no value. The original wealth (les biens primitifs) of a great State consists in men, land, and cattle."

Land furnishes the raw materials of all industry ; those raw materials are the original wealth, always renewed, which sustains all classes in the kingdom. Without means of doing justice to the resources of the land, the farmer not only keeps himself poor, but injures the prosperity of the whole nation. It is therefore of the first importance that the farmer should not be poor. When Quesnay says Farmer he does not mean the agricultural labourer, though as nearest to the actual work on the land the labourer might be conceived to be the more important person. To Quesnay the farmer is the “entrepreneur,employer, and director, and organiser of labour on the land. He must be in a position to spend what is necessary on the soil itself, and on the wages of the labourers. He was so in France in the days of Sully ; he has not been so since, for Colbert, unlike Sully, has neglected agriculture, and forced France into manufactures that have prejudiced the farmers, and with the farmers Agriculture, and with Agriculture the solid prosperity of the whole nation. For it is not true (says Quesnay) that commerce and agriculture are two coordinate sources of wealth. Commerce is only a branch of the tree of agriculture, and a less important branch than manual labour. It is only in agriculture (or, more generally, in the procuring of raw materials) that the return to expenditure more than balances expenditure, and leaves a surplus, clear gain,3—a gain which is no other man's loss. Hence, agriculture should be a subject of interest not only to farmer and labourer and landlord, but to the entire nation. It is every one's interest that the produce of the soil should be as great as possible, and hence every obstruction to agriculture should be removed. There should be free exportation of corn and other raw produce. The result would be better prices to the cultivator, better capacity on his part to do justice to his lands, and consequent increase of cultivation, followed by an increased population, which again would extend consumption, and keep up the market for the produce. Most of the trade of the kingdom, as it now is, does not really increase the wealth of the nation ; (as Locke says) it means no more than money changing hands in a game or a lottery ; it does not add to the stakes.*

1 Éloge de Gournay, reprinted in the volume “Turgotof Petite Biblioth. Ec., p. 39. 2 Encycl. of Did. and D'Alemb., vol. vii., 1757, art. “Grains,” pp. 812

3 Ibid. seg.

4 Cf. Maximes génér. du gouvern. écon. Daire's Physiocrates (1846), I. p. 99 n. Encycl., art. “Fermiers” (vol. vii., 1756, p. 528 seq.).

5 “Grains," 821, 2.

3

1 "Grains," 819, cf. 821, 2.

2 Ibid., 820 n. Quesnay's word is “revenus.Produit net" became his favourite phrase some years later. Benj. Franklin was Physiocratic when he spoke of manufactures as “subsistence metamorphosed.” Works (Sparks), II. 374 (quoted by Dugald Stewart, Pol. Econ., I. 262).

4. “Fermier," 539, I.

His strong

The economical principles given in Quesnay's two articles,' became the basis of Physiocracy. expressions of patriotism, and (perhaps even more) his special pleading for one particular industry, give his readers the impression that the general principles are in some degree an afterthought. However, it is a matter of history that both in Quesnay's own writings and in the voluminous writings of his school, the principles were expanded and applied economically and philosophically far beyond these simple positions. The theory of taxation and the theory of Free Trade were worked out more elaborately; and the notion of a “natural order," natural rights, and a corresponding theory of Government, were developed. The term Political Economy became once for all identified with the study of the subjects now embraced under it. It is true that the Physiocratic system embraced much more than economical matters; but its economical positions are its most characteristic feature, and the Physiocratic writers have perhaps done more for economics than (much as they strove after it) for political philosophy,

It has been said that Philosophy touches Economics most closely at the starting point and at the close. The doctrines of wealth and value rest on psychology, and the economical relations of men to each other in society cannot be fully understood without a political philosophy. Now, the first of these points of connection was not fully considered by the Physiocrats ; but indirectly they have rendered help to its consideration by their clear statement of first principles, and especially by their analysis of value and rent. It is Quesnay who says (Dialogue sur les travaux des artisans, Daire, 192):—“To obtain the greatest possible increase of enjoyments by the greatest possible diminution of expenses is the perfection of economy.” The distinction of Value in Use from Value in Exchange comes in its modern form from the same writer.

“We should distinguish in a State the

1 Much of the space is taken up by a discussion of the merits of horses versus oxen, and similar details.

2 It is fair to remember that Verri in Italy (in 1763), and Steuart in Scotland (1767), were perhaps the first to use Political Economy" in the titles of distinctly economical treatises.

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