François Quesnay

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François Quesnay

François Quesnay (June 4, 1694 &ndash December 16, 1774) was a French economist of the Physiocratic school. He also practiced surgery.

Biography

François Quesnay was born in Seine-and-Oise, June 4 1694. His father worked as a ploughman and merchant. In 1711, Quesnay entered into training for five years as a Parisian engraver.

Following this, he registered at the university in the college of surgery, receiving his degree in 1717. In 1718, Quesnay was accepted into the community of surgeons of Paris. In 1723, he became royal surgeon, entering in the service of the Duke of Villeroy in 1734, and in 1744, was awarded the rank of doctor of medicine. Five years later he became physician to Madame de Pompadour, influential mistress of King Louis XV. Elected to the Academy of Science in 1751, Quesnay became a member of Royal Society in 1752. The same year he was made a noble by the king after curing the Dolphin of smallpox.

François Quesnay's interest in economics arose in 1756, where, hoping to draw on his country background, he was asked to contribute several articles on farming to the Encylopèdie of Diderot and d'Alembert. Quesnay delved into the works of the Maréchal de Vauban, Pierre de Boisguilbert and Richard Cantillon and, mixing all these ingredients together, Quesnay gradually came up with his famous economic theory.

In 1758, Quesnay wrote his Tableau Économique ---- renowned for its famous "zig-zag" depiction of income flows between economic sectors ---- to explain his doctrine. It became the founding document of the Physiocratic sect and the ancestor of the multisectoral input-output systems of Wassily Leontief.

While the accepted founder of the classical school is Adam Smith, he, in turn, acknowledged his indebtedness to the French Physiocrats, the pioneer school of economic thought which taught a single land tax and free trade. And the founder of the Physiocratic movement was François Quesnay, the King’s physician. He died on December 16, 1774 in Versailles.

Quesnay’s works

Francois Quesnay began with the axiom that agriculture is the only source of produit net (net product, or surplus of output above cost). He believed that manufacturing and commerce were "sterile" as (in his view), the value of their output was equal to the value of their inputs. Only land, Quesnay reasoned, produced more than went into it. The wealth of a nation, Quesnay argued, lies in the size of its net product.

Quesnay's system of political economy was summed up in Tableau économique (1758), which diagrammed the relationship between the different economic classes and sectors of society and the flow of payments between them. In his Tableau Quesnay developed the notion of economic equilibrium, a concept frequently used as a point of departure for subsequent economic analysis.

He claimed that the only "productive" person is the farmer, the only one that generated a net product. The landlord, the farmhand, the foreign merchant and, most notably, the artisan, are all part of the "sterile class" because none of them generated a net product.

In this Francois Quesnay opposed the mercantilist doctrines of Colbert, believing that they concentrated too much on propping up industry and commerce rather than agriculture.

The natural state of the economy was conceived as the balanced circular flow of income between economic sectors and thus social classes which maximized the net product. In these concepts, Quesnay saw analogies to the circulation of human blood and the homeostasis of a body.

Quesnay’s “Laisses Faire”

Quesnay claimed that the only "productive" person is the farmer, the only one that generated a net product. The landlord, the farmhand, the foreign merchant and, most notably, the artisan, are all part of the "sterile class" because none of them generated a net product. However, to achieve an ideal state, government should help first.

Influenced by Vincent de Gournay, an advocate of laissez-faire, Quesnay wished to see many of the Medieval rules governing agricultural production lifted, permitting the economy to find its "natural state".

Thus, Francois Quesnay was largely responsible for the distinction between the ordre naturel (nature's order) and the ordre positif (positive, i.e. human-idealized, order). A good government, Quesnay argued, should follow a laissez-faire policy so that the ordre naturel could emerge.

As the originator of the term “laissez-faire, laissez-passer” ----“let it be, let it pass”; although the phrase is not readily translatable, it was widely used by the Physiocrats in urging freedom from government interference and was adopted by Adam Smith ---- Quesnay believed, in opposition to the then-dominant French mercantilists, that high taxes, high internal tolls, and high barriers to imported goods were the cause of the grinding French poverty he saw around him. Quesnay wanted Louis XV to deregulate trade and to slash taxes so that France could start to emulate wealthier Britain.

The methodology of Quesnay's physiocratic system and his principles of policy sprang from an extreme form of the doctrine of natural law, which he believed represented the divinely appointed economic order. He was, indeed, one of the originators of the 19th-century doctrine of the harmony of class interests and of the related doctrine that maximum social satisfaction occurs under free competition.

The Tableau Économique

Quesnay identified three distinct classes:

(1) the proprietary class (landlords)

(2) the productive class (farmers and agricultural laborers)

(3) the sterile class (artisans and merchants),

and the following five protagonists were involved:

(1) Farmer: produces grain, owns livestock and seed, hires labor, pays rent to landlord.

(2) Artisan: produces crafts, uses local grains and foreign goods as raw materials.

(3) Laborer: works for farmer, receives wages.

(4) Merchant: sells foreign goods he has imported and buys local grain for export.

(5) Landlord: owns land, receives rent from farmer.

Quesnay believed, that only "productive" person is the farmer, the only one that generated a net product. The landlord, the farmhand, the foreign merchant and, most notably, the artisan, are all part of the "sterile class" because none of them generated a net product. In other words, he believed that only the agricultural sector could produce a surplus that could then be used to produce more the next year and, therefore, help growth. Industry and manufacturing, thought Quesnay, were sterile.

Quesnay used the term "advances" to denote capital, i.e. expenditures during a production process that are drawn from a previously-accumulated fund. He identified four types of capital depending on the sort of expenditures they were earmarked for:

(1) avances foncières (fundamental/landed advances): one-time capital expenditures undertaken by landlords on their land, e.g. land-clearing, drainage, fence-building, etc.

(2) avances souveraines (sovereign advances): one-time capital expenditures undertaken by government, e.g. roads, bridges, etc.

(3) avances primitives (primitive advances): expenditures on durable producers' goods, e.g. horses, cattle, ploughs, etc. In the Tableau, these are also referred to as avances originelles (original advances).

(4) avances annuelles (annual advances): expenditures on the wages of labor and non-durable producers' goods, e.g. cattle-feed, seed, etc.( Quesnay 1959 ).

Of all these categories of advances, (3) and (4) are the most important and the ones which Quesnay analyzed most deeply. Quesnay's distinction between original advances and annual advances were imported by Adam Smith "fixed" and "circulating" capital respectively.

Tableau Économique ZIG-ZAG analysis

The zig-zag design of the Tableau is effectively the flow of funds in a dynamic form rather than the "static" natural state. The left side of the Tableau represents the productive class (farmer) and the right side represents the "sterile" class (artisan). At the top in the centre is the landlord.

The landlord begins the flow by buying goods from both the artisan hence the income flows from the landlord to both the left (productive) and right (sterile) columns. The income received from the landlord is registered by the classes in their respective columns. From the income, there is an arrow that indicates "expenditures" which then extends across the Tableau to the other column. These expenditures ( that of the farmer for crafts and the artisan for grain ) thus cross each other to become the income of the artisan and the farmer respectively.

The farmer and the artisan then use this new income again to buy goods from each other - thus they cross again. That then becomes subsequent income and thus cross-expenditure. Thus, the zig-zag across the columns is the income-expenditure process of the farmer and the artisan.

This income-expenditure process is a convergent series. The bottom of the column depicts the "natural state" once all the flows have been worked out. Along the farmer's column on the left side, there is a small arrow indicating the "creation" of produit net by the farmer at every stage in the process. This is summed at the bottom as the total net product of the economy. Notice that it is identical to the landlord's "initial" expenditure from rent. Thus, the "rent on land" and the "net product" created are the same ( Quesnay 1758, 1759 ).

Quesnay’s critique and legacy

Critique

Although Quesnay was wrong about the sterility of the manufacturing sector, he was right in ascribing France's poverty to mercantilism, which he called Colbertisme (after Louis XV's finance minister, Colbert). The French government had protected French manufacturers from foreign competition, thus raising the cost of machinery for farmers, and had also sold to wealthy citizens the power to tax farmers.

Quesnay advocated reforming these laws by consolidating and reducing taxes, getting rid of tolls and other regulations that prevented trade within France, and generally freeing the economy from the government's stifling controls. These reforms were much more sensible than his theorizing about the sterility of industry. So it seems that it was only the effort to provide these reforms with a watertight theoretical argument that produced some of the forced reasoning and slightly absurd conclusions of the “Tableau.”

Legacy

In “Tableau Économique” we see perhaps the first work to attempt to describe the workings of the economy in an analytical way, and as such can be viewed as one of the first important contributions to economic thought. Also, as the ancestor of the multisectoral input-output systems of Wassily Leontief.

While the accepted founder of the classical school is Adam Smith, he, in turn, acknowledged his indebtedness to the French Physiocrats, the pioneer school of economic thought which taught a single land tax and free trade. And the founder of the Physiocratic movement was Francois Quesnay, the King’s physician.

References

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• Quesnay, F., "Évidence", "Fermiers", "Grains" in Encyclopèdie of Diderot and d'Alembert, 1756-1757
• Quesnay, F., Questions intéréssantes sur la population, l'agriculture et le commerce, with de Marivelt,in: Mirabeau, l'Ami des Hommes: P. IV.1758
• Quesnay, F., Le Tableau Économique

"First" 1758 Edition (Tableau with base of 400l., accompanied by Remarques sur les variations de la distribution des revenus annuels d'une nation; manuscript) "Second" 1759 Edition (the Tableau with base of 600l. accompanied by Extrait des oeconomies royales de M. de Sully) "Third" 1759 Edition (the Tableau with base of 600l. accompanied by Explication du tableau ecoomique and an expanded and footnoted Extrait des économies -royales de M. de Sully) A facsimile reprint of the “Tableau Économique” was published by the British Economic Association, London 1895

• Quesnay, F., Essai sur l'administration des terres, (by Sieur Ballial des Vertus), 1759
• Quesnay, F.,La physiocratie, 2 vols.,1768
• Quesnay, F.,OEuvres économiques et philosophiques, accompagnées des éloges et d'autres travaux biographiques sur Quesnay par différents auteurs,( Francfort ed. )

Scientia Verlag, Aalen 1888

This article incorporates text from the Encyclopædia Britannica Eleventh Edition, a publication now in the public domain.

External Links

• François Quesnay, 1694-1774
• Quesnay's Tableau Économique

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