Theorists of the Laissez-Faire State

Physiocrats

In the eighteenth century, physiocrats and economists, namely, Smith, Ricardo and Malthus advocated the principle of laissez-faire, non-interference of government in economic life of individuals. Physiocrats were a school of economic thought in France led by Francois Quesnay and Mirabeau. Quesnay, a physician in the court of Louis XV, devised a chart of the economy called tableau économique.⁸ The chart and the physiocrats were of the view ‘that wealth sprang from production and that it flowed through the nation, from hand to hand, replenishing the body social like the circulation of blood’.⁹ They envisaged wealth in terms of production, as opposed to the popularly held view held that it consisted of gold and silver. However, it was based on the idea that only an agricultural worker produced true wealth and a manufacturing and commercial worker merely altered its form. This could have been due to their view in the goodness of nature and that labour can produce only when performed on land and in the bosom of nature. Implicit in this was the advocacy that government should leave producers free without interference so long as they do not interfere in each other. The physiocrats advocated liberty of production and non-interference of State in the activity, a policy of laissez-faire.