Conociendo al capital 3: Los fisiócratas 1/2

Economic Roles in Society

Introduction to Key Characters and Their Professions

• Gabriel is a carpenter working in a furniture factory, Claudia operates in a dairy company, and Aníbal is a bus driver. They all need to purchase goods and services for daily living, such as furniture, dairy products, and transportation.

• The necessity of these goods highlights the interconnectedness of their roles within the economy; they produce what they consume. For instance, Claudia consumes dairy products that she often packages herself.

Historical Context: Industrial Revolution

• By the late 18th century, England emerges as the wealthiest nation due to the Industrial Revolution's advancements. France experiences slower industrial growth with initial technical innovations primarily in agriculture.

• The French society is divided into classes: landowners (nobility), merchants/artisans (third estate), and farmers who work on land owned by others but pay rent to landowners. This class structure influences economic dynamics significantly.

Artisan Guilds and Agricultural Labor

• Artisans organize into guilds which regulate trade practices, training, and pricing within their crafts. Farmers work lands they do not own while paying rents to landlords who inherit these properties through noble titles.

• The farmer’s role involves cultivating crops without owning any land themselves; they are responsible for production yet remain economically dependent on landowners for their livelihood after paying various taxes and rents.

The Emergence of Physiocracy

François Quesnay: A Pioneer of Economic Thought

• In this historical context arises François Quesnay, considered the father of Physiocracy—a school of thought emphasizing agriculture as the source of wealth rather than industry or commerce. His medical background informs his economic theories about societal functioning akin to bodily functions.

• Quesnay's significant contributions include his treatise on blood circulation which he parallels with economic exchanges among social classes—merchandise transactions act like blood flow within society's body politic.

Core Principles of Physiocracy

• According to Quesnay, natural laws govern both nature and economics; thus agricultural productivity is essential for societal wealth creation—contrasting with England’s industrial focus where small family businesses struggle against larger entities during early industrialization phases in France.

• He argues that true wealth stems from laboring over land; only agricultural work generates new value distinct from existing resources—this principle underpins Physiocratic ideology asserting that state intervention should be minimal as societies thrive under natural laws instead of artificial constructs imposed by governance systems.

Conclusion: Class Dynamics in Economic Theory

• Within this framework, different classes have defined roles: farmers are seen as productive members contributing directly to economic output while artisans create value through craftsmanship—all interlinked within an overarching system governed by natural order principles espoused by physiocrats like Quesnay himself.

The Role of Agriculture in Wealth Generation

The Foundation of Agricultural Wealth

• The process begins with farmers planting crops, selling their harvest, and using the proceeds to buy bread made by artisans. This cycle illustrates how agricultural output generates wealth for society.

• Artisans are considered a "sterile class" by physiocrats; they do not create new wealth as transforming natural products does not increase societal richness.

• While artisans like bakers provide essential goods, their work does not contribute to overall societal wealth according to physiocratic thought; they merely transform existing resources.

• Landowners (terrenos) receive income from rents paid by farmers without directly contributing to agricultural production, highlighting a reliance on agricultural wealth for their livelihood.

• Physiocrats argue that the state should eliminate complex tax systems inherited from medieval times that complicate tax collection.

Economic Liberalism and Agricultural Freedom

• Physiocrats advocate for economic liberalism, contrasting sharply with mercantilist views that support government intervention in the economy for national trade benefits.

• They believe the state should refrain from interfering with natural laws governing agriculture, advocating for the removal of regulations that hinder farming productivity.

• By promoting unrestricted trade and removing barriers, physiocrats aim to enhance agricultural output and thus increase national wealth.