Smith vs the Physiocrats
Before Smith, the French Physiocrats were the most systematic school of economics. Smith learned from them but ultimately rejected their central claim that only agriculture creates wealth.
The Physiocrats: Land as the Source of All Wealth
The Physiocrats, led by Francois Quesnay (physician to Louis XV) and Anne-Robert-Jacques Turgot, argued that only agriculture was truly productive. Manufacturing and commerce, in their view, merely transformed or moved goods that agriculture had created. Only the land produced a genuine surplus, the produit net, above what was consumed in the process of production.
This was not as eccentric as it sounds. In 18th-century France, agriculture accounted for the overwhelming majority of output, and the Physiocrats had a point that nature provides something for nothing in the form of plant growth, which no manufacturing process can replicate. Their policy prescription followed logically: tax only land, free agriculture from restrictions, and remove the mercantilist regulations that distorted trade.
