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goods (biens) which have a value in use (valeur usuelle), and no market value (valeur vénale) from the wealth (richesses) which has both a value in use and a market value. For example, the savages of Louisiana enjoyed many goods, such as water, wood, game, fruits of the earth, which were not wealth because they had no market value. But, after the establishment of trade between these savages and the French, English, and Spaniards, part of their goods acquired a market value and became wealth. So the government of a kingdom should try to procure for the nation at once the greatest possible abundance of productions, and the greatest possible market value, because by means of great wealth the nation can procure in trade all the other things which she may need, in precise proportion to the state of her wealth.” Money is a form of wealth which acts as an intermediary between the sellers and the buyers, but its function is to be the means of exchanging other forms of wealth.
It adds nothing to the “real wealth" of the country, in the sense of leaving the total greater than it found it ; and it is a mistake to suppose that an accumulation of money is the way to make a nation really rich. This was a view directly opposed to the Mercantile Theory, to which theory the Physiocrats may be considered as dealing the death blow.
But it was not only money which was sterile, in the view of those Economists. Quesnay represents society as divided (economically) into three great classes—the cultivators, who are alone productive, the proprietors (including the State) who draw from the first class what they spend on the 3rd or Industrial class, and the last, who are called emphatically the Sterile or unproductive class.? Their materials all come from the first class, and their outlay of labour and capital does not bring to the nation in material goods more than an equivalent. If we depended on them and had no agricultural surplus, but just enough to feed our own people, the wealth of the country could not grow. Growing national wealth must mean growing produce of agriculture. Agriculture alone yields a net produce or clear gain after reiinbursement of expenses; and the agriculturist is not the labourer, but his employer. Physiocracy, therefore, as an economical theory is a glorification not of the labourer, but of the capitalist, though only in one field of action. The theory of capital is, as a matter of fact, more fully elaborated by Quesnay and his followers than the theory of Rent, though the later theory of Rent had no doubt its first beginnings in their doctrine of net produce. They speak of “advances laid out on the soil” (see Dupont, Abrégé des principes de l'écon. pol., 1772, Daire, I. p. 375) and "original advances” (which are roughly identical with sunk capital, and permanent instruments for agricultural work), and "annual advances” (which correspond to circulating capital). The notions of fixed and circulating capital seem little more than an extension to all industries of the broad distinctions made by the Physiocrats for agricultural capital in particular. We should not, however, find in Quesnay or the rest any very satisfactory explanation of the first origin of the “ original advances” and “annual advances ” themselves. We are told that even in order to rear children “advances” are necessary, and the hunter's bow and arrows have needed “advances " and are his capital. But the phenomenon of interest and profits, except in agriculture, are left practically unexplained, and the relation of the idea of capital to that of property is only touched in so far as it is necessarily covered by the philosophical doctrines of natural right, natural laws, and natural order. Quesnay's thoughts on these matters follow the lines of Grotius and Locke. He is giving his contribution to the development of the notion of a Law of Nature ; and his “new science” is the study of “ Physiocratic" or that
1 Quesnay, Maximes générales du gouvernement économique d'un royaume agricole," 1758. Note on Max. XVIII. (Daire, I. p. 98). Elsewhere he speaks of “biens gratuits” and “ biens commerçables.” See Schelle, page 81.
2 Maximes générales, XIII. note (Daire, p. 93).
3 Condillac, the philosopher, departed from them on this point in his Commerce et gouvernement (Amsterd.), 1776 (eg. ch. vii. p. 67), though otherwise Physiocratic.
1 See above and cf. the Tableau économique of Quesnay given in Dupont's Physiocratie ou constitution naturelle du gouvernement le plus avantageux au genre humain, Paris and Leyden, 1768. See Daire, Introd. to vol. i. pp. xliv., etc.
? See, c.g., Dupont's Correspond. with Say, in Daire, I. p. 401.
constitution of government which is best for man, because most in accordance with Nature.
The natural right of man (says Dupont in his Preface to Quesnay's ? Physiocratie) is the right which he has to do that which is advantageous to him, the right which he has to the things proper to his enjoyment; and this right is founded on the imperious necessity by which we are charged with our own preservation under penalty of suffering and death. To give effect to that right we must of course know what is advantageous to us; and so it is an essential corollary of that right that we should seek to be enlightened by reflection, judgment, and the calculations of self-interest. Else we might use our faculties to do what is hurtful to us, and that could not be in pursuance of natural right. The exercise of our natural right is prescribed for us by the absolute causes which our intelligence ascertains for us. As the natural right existed for the first man, and exists for men in isolation now, it is in one sense antecedent to the social order. But it is not the less limited by the physical laws of the natural order, the laws of the general order of the universe ; and hence is in need of an enlightened understanding. If men violate physical laws, they will suffer death ; and, if they violate the laws of social order, which are equally natural, they will ruin and destroy each other. There are no rights without duties, or duties without rights. Natural order, then, in this large sense, is antecedent to natural right, whether exercised in isolation or in society. Natural laws, as distinguished from the natural order, are simply the conditions under which the members of the natural order play their part in conformity therewith. The natural laws of the social order are accordingly the conditions under which men must act in order to secure to themselves the advantages of society. They prescribe the rules of union ; and the rules are no arbitrary contrivances, but flow from the essential justice that secures to men their subsistence and their enjoyment of their possessions without detriment to others; without them there is no security of life or possessions. "Nature" does not mean the savage state.
i Physiocratie (Droit Naturel, etc.) (1768). He is giving the main points in Quesnay's Droit Naturel, which comes directly after his preface. See Daire, vol. i.
2 See Dupont, Origine et progrès d'une science nouvelle. Daire, I. 342.
The noble savage of whom we at present hear so much [from Rousseau] is often in his tribal life much more regardful of the laws of the social order than civilized men are in a badly constituted State, with positive laws that conflict with the laws of nature.' But his condition is far from being the best possible for humanity. Civilization is better; and it began with agriculture. “ The first wheat sown in the earth was the germ of empires." With agriculture came settled life, property, and political government. There followed too a great increase of people, for “men only multiply in proportion to the wealth necessary to their subsistence; and so it is that agriculture, which is the only source of the wealth of empires, occasions a rapid increase of population."
To facilitate this production of wealth by agriculture, government must grant the utmost freedom of trade, in order that the cultivator may have the best market possible. Free trade is thus one of the natural laws of the social order. From the economics of the school it follows that the expense of government must be met by a taxation laid on the only shoulders that can bear it, namely, the proprietors of land. The Physiocrats had a partiality for a sort of patriarchal monarchy, like the Chinese, on the ground that a patriarchal monarch would feel his interests identical with that of the agricultural classes. They were not careful to avoid language which seemed to justify despotism, and the famous pamphlet of Voltaire (1768), L'homme aux quarante écus, which was directed against them, makes much of this feature. Logically (as their candid friend Turgot pointed out to
1 We find in Adam Smith something like a deliberate avoidance of “laws” in matters economical. Malthus seems to have been the first English economist to use the term in this connection, and he may have borrowed it from the Economists, though his use of it is slightly different from theirs. But see below [Natural Rights and Law of Nature].
2 Loc. cit., XLIX.
3 E.g. Dupont, Origine et progrès d'une science nouvelle. Daire, I. 364.
They spoke of “ autorité tutelaire" and even “despotisme légal.”
them ') there was no such connection between their ideas and those of absolutism that they needed to incur the odium of this reproach.
For our present purpose it is more important to inquire what was the exact sense in which they understood rights of property, There were, according to the Physiocrats, three kinds of property, equally founded on the “natural order.” These were property in one's own person, property in moveables, and property in land. The right of self-preservation demands the first of these, and the consequence of its admission is not only the abolition of Slavery (the Physiocrats were many of them active abolitionists), but the removal of all restrictions on employment. The economists joined with Turgot in demanding the abolition of corvée, guilds, and other mediæval obstructions to freedom of labour ; they certainly helped towards the final removal of them in 1789. The second kind of property is the extension of the first ; by joining my labour to objects I make them mine. But then comes the hard question :In a world already tenanted by others have I a right to everything, as Hobbes had declared ? Quesnay answers that this is a physical impossibility; the right of nature is therefore only to such means as I can obtain by my own efforts for the satisfaction of my wants. In a state of “pure nature" this would mean that my labour was my only title ; and the right of all to all would be reduced to the right of every one to that portion which his labour procured for him. But we find in men a great inequality of powers, an inequality neither just nor unjust, for it simply results from natural laws. As men benefit by laws of the physical world as much as they suffer from them, so (it is suggested) they benefit from the social order more than they are restricted by it. It secures to them what otherwise could not be secure, the fruits of their labour ; and their labour in society is much more economical and effective than it could have been in isola
1 See his letter to Dupont, quoted by Schelle, Dupont de Nemours, 1888, p. 178.
2 See, e.g., Dupont, Origine et progrès. Daire, I. 362 ft. 3 Quesnay, Physioc. Droit Naturel, e.g. Daire, I. 44.