The Physiocratic Theory of Taxation

Abstract

1. That the Physiocrats can rightly pretend to have consciously endeavoured to build for the first time a coordinated system of economics is perhaps today a commonplace dictum. There are rivals to the claim to the title of Founders of Economics; but nobody can contest to the Physiocrats the attribute of ‘conscious’ pretenders to the title. The Tableau oeconomique may be incomprehensible, but it is certainly an earnest effort to offer a scheme of the endless and ever revolving process of production and consumption. Here ends, however, their rightful claims; because their celebrated special doctrine of the ‘produit net’, ridiculized at once by the Voltairean satire L’homme aux quarante écus, fell soon flat under the criticism of the economists, who progressively extended the concept of productivism from agriculture to all other species of human activity. The single tax on the net product theory was not reawakened under the guise of the modern theories of the tax on rent or on unearned incomes. Henry George quoted the Physiocrats among his precursors; but it was lip service and did not avail very much to vindicate Physiocratic theories amid the scientific fraternity.

First published in Economic Essays in Honour of Gustav Cassel, London: Allen & Unwin, 1933, pp. 129–42.