A history of economic doctrines : $b from the time of the physiocrats to the present dayGide, Charles
History
A history of economic doctrines : $b from the time of the physiocrats to the present day
Gide, Charles
Economics -- History
This essential difference which the Physiocrats sought to establish
between agricultural and industrial production was at bottom theological.
The fruits of the earth are given by God, while the products of the
arts are wrought by man, who is powerless to create.[36] The reply is
obvious. God would still be creator if He decreed to give us our clothes
instead of our daily bread. And, although man cannot create matter, but
simply transform it, it is important to remember that the cultivation of
the soil, like the fashioning of iron or wood, is merely a process of
transformation. They failed to grasp the truth which Lavoisier was to
demonstrate so clearly, namely, that in nature nothing is ever created
and nothing lost. A grain of corn sown in a field obtains the materials
for the ear from the soil and atmosphere, transmuting them to suit its
own purpose, just as the baker, out of that same corn, combined with
water, salt, and yeast, will make bread.
But they were sufficiently clear-sighted to see that all natural
products, including even corn, were influenced by the varying condition
of the markets, and that if prices fell very low the net product
disappeared altogether. In view of such facts can it still be said
that the earth produces real value or that its produce differs in any
essential respects from the products of industry?
The Physiocrats possibly thought that the _bon prix_—_i.e._ the price
which yielded a surplus over and above cost of production—was a normal
effect of the “natural order.” Whenever the price fell to the level of
the cost of production it was a sure sign that the “order” had been
destroyed. Under these circumstances there was nothing remarkable in the
disappearance of the net product. This is doubtless the significance
of Quesnay’s enigmatic saying: “Abundance and cheapness are not
wealth, scarcity and dearness are misery, abundance and dearness are
opulence.”[37]
But if the _bon prix_ simply measures the difference between the value of
the product and its cost of production, then it is not more common in
agriculture than in other modes of production. Nor does it extend over a
longer period in the one case than in the other, provided competition be
operative in both cases; on the contrary, it will become manifest in the
one case as easily as in the other, especially if there be any scarcity.
It remains to be seen then whether monopoly values are more prevalent in
agricultural production than in industrial. In a very general way, seeing
that there is only a limited quantity of land, we may answer in the
affirmative, and admit a certain degree of validity in the Physiocratic
theory. But the establishment of protective rights and the occurrence
of agricultural crises clearly prove that competition also has some
influence upon the amount of that revenue.
Public-domain text, read in full here on John Shaqi.
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