Physiocracy facts for kids

Physiocracy was an economic idea from the 1700s. People who believed in it, called physiocrats, thought that a country's wealth came mostly from farming and nature. They believed that the government should let the economy run itself, following natural laws.

What is Physiocracy?

Physiocracy is a way of thinking about how a country's economy works. It was popular in France during the 18th century. The word "physiocracy" means "rule of nature." This shows their main belief: that nature and natural laws should guide how money and goods move around.

Wealth from Nature

The physiocrats believed that only farming, mining, and fishing could create new wealth. They thought that factories and trade just changed existing wealth. For them, the land was the true source of all value. This was different from other ideas at the time, which focused on trade or making goods.

Natural Order and Laissez-faire

Physiocrats believed in a "natural order" for the economy. This meant that if people were free to act in their own interest, the economy would work best. They used the phrase "laissez-faire, laissez passer," which means "let do, let pass." This idea suggests that governments should not interfere much with business or trade. They thought that taxes should only be on land, as land was the source of all wealth.

Who Were the Physiocrats?

The most famous physiocrat was a French doctor named François Quesnay. He was a physician to the French king, Louis XV. Quesnay developed many of the main ideas of physiocracy.

Key Ideas of Quesnay

• Productive Class: Farmers were seen as the only group that could create new wealth.
• Sterile Class: People who worked in manufacturing, crafts, or trade were called "sterile." This meant they didn't create new wealth, but only transformed existing goods.
• Proprietary Class: Landowners were also important. They owned the land that produced the wealth.
• Economic Table: Quesnay created a diagram called the "Tableau Économique." It showed how wealth flowed between these different groups in society. It was one of the first models of an economy.

Why Was Physiocracy Important?

Even though physiocracy didn't last long as a main economic theory, it was very important. It helped to develop the idea of economics as a science.

Influence on Modern Economics

• Focus on Production: Physiocrats were among the first to focus on how wealth is produced, not just how it's traded.
• Limited Government: Their idea of "laissez-faire" influenced later economists. This concept is still discussed today when talking about how much governments should control the economy.
• Economic Models: Quesnay's "Tableau Économique" was an early example of trying to map out how an economy works. This led to more complex economic models used today.

Physiocracy showed that people were starting to think deeply about how countries become rich. It paved the way for other famous economic thinkers, like Adam Smith, who wrote about free markets.