Determining the etymological origin of the term physiocracy is the first thing we must do. Specifically, we can establish that it is a word that comes from Greek, as it is made up of three components of that language: the word “physis”, which is equivalent to “nature”; the noun “kratos”, which can be translated as “power”; and the suffix “-ia”, which is synonymous with “action or quality”.
The economic system which attributes the origin of the wealth to nature is known as physiocracy. This school of thought arose in France during the century XVIII, with exponents like François Quesnay, Pierre Samuel du Pont de Nemours and Anne Robert Jacques Turgot, among others.
The latter was a French economist, one of the creators of the aforementioned doctrine, who carried out the “Six Decrees of Turgot”, which advocated the elimination of guilds, the abolition of privileges as well as the recognition of that any man had the right to work, without any kind of restriction imposed on him.
In addition to all the above, we would have to emphasize that, from a historical point of view, it is considered that the figures who promoted and defended the physiocracy were really the fathers of the so-called social sciences. And it is that they resorted to science to be able to analyze and explain each and every one of the components of the society in which they lived.
According to the Physiocrats, economic systems should be governed by their own natural laws, without intervention of the government. His system, therefore, was based on the French concept of laissez faire (“Let go”), which promotes the free market and the null participation of the State in economic decisions.
Physiocracy, therefore, was opposed to mercantilism, promoter of an active State that will establish protectionist measures. For the Physiocrats, this type of policies that implied state intervention in various stages of the production and distribution of goods generated a decrease in economic activity and prosperity in general. To demonstrate this they took as examples the monopolies that dominated certain sectors of the economy and the strengthening of a parasitic bourgeois class.
Just as mercantilism holds that the basis of wealth is the precious metal accumulation coming from international trade, for the physiocracy wealth is generated by the farming. Physiocratic theorists assert that the farmer is the only individual whose labor produces more than the wage he receives.
Just as there were many characters who praised and were in favor of physiocracy, there were also others who totally rejected it. This would be the case, for example, of the American economist and politician Alexander Hamilton (1755 – 1804). He, who considers himself one of the founders of the United States, was totally against the ideas that that doctrine maintained regarding land and taxes.
Criticisms of the physiocracy contradicted that the merchant and artisan classes were unproductive and argued that a land tax should not be applied.