The Physiocrats were a group of thinkers who believed in an economic theory which considered that the wealth of nations was derived solely from agriculture. Their theories originated in France and were most popular during the second half of the 18th century. Physiocracy was perhaps the first well developed theory of economics.
Historian David B. Danbom explains, "The Physiocrats damned cities for their artificiality and praised more natural styles of living. They celebrated farmers."(1)
They called themselves économistes (economists) but are generally referred to as Physiocrats in order to distinguish them from the many schools of economic thought that followed them. Physiocrat is derived from the Greek for "Government of Nature".
The principles of Physiocracy were first put forward by Richard Cantillon, a French merchant of Irish extraction, in his 1756 publication Essai sur la nature du commerce en géneral (Essay on the general nature of commerce). The ideas were later developed by thinkers such as Francois Quesnay and Jean Vincent into a more systematic body of thought held by a united group of thinkers.
The physiocrats saw the true wealth of a nation as determined by the surplus of agricultural production over and above that needed support agriculture (by feeding farm labourers and so forth). Other forms of economic activity, such as manufacturing, were viewed as taking this surplus agricultural production and transforming it into new products, by using the surplus agricultural production to feed the workers who produced the extra goods. While these manufacturers and other non agricultural workers may be useful, they were seen as 'sterile' in that their income derives ultimately not from their own work, but from the surplus production of the agricultural sector.
The physiocrats were in strong opposition to mercantilism, which emphasized trade of goods between countries, as they pictured the peasant society as the economic foundation of a nations wealth.
The physiocrats enjoyed some support from the French monarchy and frequently met at Versailles.