TAILIEUCHUNG - A Companion to the History of Economic Thought - Chapter 5

C H A P T E R F I V E Physiocracy and French Pre-Classical Political Economy The final part of Louis XIV’s reign saw the development of major economic works with the contributions of Pierre de Boisguilbert and Sébastien le Prestr | CHAPTER FIVE Physiocracy and French Pre-Classical Political Economy Philippe Steiner Introduction The final part of Louis XIV s reign saw the development of major economic works with the contributions of Pierre de Boisguilbert 1646-1714 and Sébastien le Prestre Marshall Vauban 1633-1707 . A member of the local administration the former wrote several pamphlets and booklets on economic administration taxation grain trade and money in which several market mechanisms were studied with great insight Boisguilbert 1966 . Following the Jansenist approach - according to which a good society may work well without virtuous behavior since self-love is enough - Boisguilbert explained that wealth did not result from benevolence and charity but from self-interest Faccarello 1986 . Since corn does not grow like mushrooms the price paid to the farmer should be high enough to cover the cost of production. With the concept of proportionate prices prix de proportion Boisguilbert pointed out that markets were connected by money flows an expense for the buyer of grain is a revenue for the farmer. Thus lowering the price of corn - a usual claim in periods of grain shortage - was a dangerous economic policy since farmers would stop producing corn. More generally Boisguilbert warned the government that any active policy on the grain market for example buying corn abroad would give birth to anticipations a likely shortage and would prevent the policy from being effective buyers eager to obtain a stock of grain would increase their demands prices would rise and a shortage would be created . Free trade thus appeared to be a sound policy. In line with English political arithmetic Marshall Vauban a great military engineer 62 P. Steiner grounded his proposal for a new fiscal system known as La dîme royale Vauban 1992 1707 on calculations. He suggested that an increase in the military and economic power of the king could be achieved together with an increase in the well-being of the .

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