Francois Quesnay

Literally translated, that quotation means, “Let be and let pass.” You’ve likely heard the phrase, “laissez faire” at some point in time. It might be in reference to someone’s attitude or outlook on life, but do you know of the origin of this statement?

It actually comes from the economic theories of Francois Quesnay, a French Enlightenment economist who lived just before the French Revolution and was a member of the court of Louis XV.

Francois Quesnay founded the economic “school” called the Physiocrats. In this context, the “school” of Physiocracy is not a physical institution but a school of thought. Physiocracy was one of two prevailing schools of economic thought in the Enlightenment, the other being Mercantilism.

“Laissez faire” describes Francois Quesnay’s belief that it was in the economy's best interest for the government to stay out of it. He also felt land was used to determine the wealth of nations. Agriculture and land development were considered “natural” sources of wealth, whereas taxation was a barrier to increasing it. The theories of the Physiocrats were a precursor to modern economic concepts like free-market capitalism and free-trade.

Francois Quesnay: Biography

Who was Francois Quesnay, and how did he become an economist who would influence modern economy?

Francois Quesnay: Biography

Francois Quesnay was born on June 4th, 1694, in Mere, France, near Paris. When he was 16 years old, he moved to Paris properly in order to study medicine. At the time of the Enlightenment, being a surgeon would have raised him into the wealthier Middle Class, as opposed to the Peasant Class he was born into.

Fun Fact: Most surgeons of this time were former barbers. Anatomy was taught in school; however, the physical part of the job was taught by doing, in apprenticeships.

He started his career as an apprentice (medical schools worked very differently back then) and continued to work and study throughout his life in the medical profession. In 1744 he graduated as a medicine doctor and was made “physician in ordinary” to King Louis XV. He lived in the Palace of Versailles along with the rest of the King’s court.

He developed an interest in economics while living at Versailles, and at the age of 60 he published his first few articles on the subject. In 1758 he published the “Tableau Economique,” which outlined his circular view of the economy and provided the basis for the Physiocrat’s view of economy.

Francois Quesnay, Public domain, via Wikimedia Commons

Explaining the Tableau Economique is a whole AP class in and of itself. At its core it is a cyclical economic model showing that agricultural profit moved through the economy in the forms of rent, wages, and goods. Quesnay and the Physiocrats believed only the agricultural class could produce a surplus that would be used in the next cycle (time period) and were the only source of growth for the economy.

Morris Lewis, CC BY-SA 3.0, via Wikimedia Commons

The following video explains the Tableau Economique in greater detail, and in a more contemporary context:

Quesnay’s 'Tableau Économique' and the problem of rent

Tableau Economique: Historiography

Francois Quesnay defined three classes in his Tableau: landowners (Proprietary Class), farmers (Productive Class), and the Sterile Class. The “Sterile” class was defined as those who consumed everything they produced and provided no profit in their goods to sell in the next year. Included in the “sterile” class were the arts, crafts (such as textiles), manufacturing, and industry.

His theory was based on the idea that only agriculture and land produced wealth for the French economy. Therefore, when constructing the Tableau Economique he ensured that the figures matched what he already believed and the chart looks as if agriculture and land create a natural cycle of wealth, while industry is a dead end.

Laissez-Faire and the Physiocrats

What was the basis of the economic school of thought Francois Quesnay founded? How does it support his idea of “Laissez-Faire”?

Physiocrats

The Physiocrats were a group of French economists, led by Francois Quesnay, who believed that government policy should not interfere with natural economic laws, and that land is the source of a nation’s wealth. Their philosophies were in direct contrast to Mercantilism, the other major economic philosophy of the 18th Century. Mercantilism emphasized more governmental policies and regulation, as well as foreign trade and manufacturing as sources of economic wealth.

Physiocracy vs. Mercantilism

Laissez-Faire

“Laissez-faire” literally translates to: “let be,” and it was the core belief of the Physiocrat’s economic model. To them, natural self-regulation was better than artificial governmental interference. They believed that natural regulation would lead to wealth in the economy, as the economy would self-regulate based on supply and demand.

To Francois Quesnay advocated for the elimination of high taxes and duties, believing that this would increase competition for French goods. In his words, the government should just let the economy be, and allow it to follow its natural cyclical order.

Laissez-Faire Historiography

The idea of less governmental regulation and more individual control led to widespread poverty in 18th century France. In the 1770s, King Louis XVI — influenced by Francois Quesnay’s proteges — eliminated regulations on France’s heavily controlled grain industry. A poor harvest struck the country, leading to scarcity (as merchants hoarded grain to wait for prices to rebound, or sold to foreign markets for a better price) and high prices. Thousands of French peasants starved, and riots ensued for months until the government stepped in and regained control of the market.

Contribution of the Physiocrats

What did the Physiocrats contribute, and why do we still study them today?

Laissez-Faire and Capitalism

The theories initially developed by Francois Quesnay — especially free market trade, and a reduction in governmental regulation — were further developed by economists such as Adam Smith and Karl Marx, in different capacities.

Adam Smith further developed the idea of Laissez-Faire into notions of Free Trade in his book, The Wealth of Nations. This continued to be refined to the theories of Free-Market Capitalism we know of today.

Karl Marx wrote about Quesnay’s theories of Surplus Value in agriculture in his book, Capital Vol. 2. He took the theory that agriculture was the ultimate source of wealth in a different direction, writing about how the unpaid value of the worker leads to exploitation or capitalist accumulation.