Adam Smith's Simplified Wealth of Nations, Book 4, Chapter 9c: Errors of the physiocrats

Chapter 9c: Errors of the physiocrats

24 According to this liberal and generous system:

This policy discourages agriculture in two ways:

  1. By sinking the real value of its produce and lowering its profit rate
  2. By raising the rate of profit in all other employments

26 By this oppressive policy, a landed nation will be able to raise up artificers, manufacturers, and merchants of its own sooner than by the freedom of trade.

27 Mr. Quesnay's Economic Table represents:

Mr. Quesnay is the very ingenious and profound author of this system and its mathematical models.

28 Some speculative physicians imagined that the human health could be preserved only by a precise regimen of diet and exercise.

Mr. Quesnay is a very speculative physician.

  • If a nation with perfect liberty and justice could not prosper, then no nation could have ever prospered.
  • 29 The capital error of this system was in representing the artificers, manufacturers, and merchants as unproductive

    1. 30 This class annually reproduces the value of its own annual consumption.
    1. 31 It is improper to consider artificers, manufacturers, and merchants in the same light as menial servants.
    1. 32 The labour of artificers, manufacturers, and merchants do increase the society's real revenue.

    33 The patrons of this system assert that the consumption of artificers, manufacturers, and merchants is equal to the value of what they produce.

    4. 34 Without parsimony, farmers and country labourers can do no better in increasing their society's real revenue than artificers, manufacturers, and merchants.

    1. By some improvement in the productivity of useful labour actually maintained in it
    2. By some increase in the amount of that labour

    35 The improvement in the productivity of useful labour depend on:

    1. the improvement in the worker's ability
    2. the improvement of the machinery with which he works

    36 The increase in the amount of useful labour actually employed depends on the increase of the capital which employs it

    37 5. Even if the revenue of a country were measured in food, a trading and manufacturing country would always have greater revenue than a country without trade or manufactures

  • The town's inhabitants frequently possess no lands of their own.
  • What a town is to its countryside, an independent state may be to other independent states.
  • Holland draws most of its subsistence from other countries.
  • A small amount of manufactured produce buys a large amount of rude produce.
  • The manufacturing country exports goods that can subsist and accommodate a very few.
  • The non-manufacturing country exports the accommodation and subsistence of many.
  • The people of the manufacturing country must always enjoy more food than what their own lands could afford.
  • 38 This system, with all its imperfections, is perhaps nearest to the truth on political economy.
    François Quesnay
    François Quesnay

    Next: Chapter 9d: Foreign Economic systems