344 Ch. 9 • Enlightened Thought And The Republic Of LettersEnlightened Thought and Economic Freedom
The philosophes’ quest to discover the laws of nature and society led sev
eral of them to try to establish a set of laws that could explain the working
of the economy. This search led away from mercantilism, which had
formed the basis of seventeenth- and early eighteenth-century economic
theory, to the emergence of classical economic liberalism. Mercantilist
theory held that states should protect their economies with restrictions
and tariffs that would maintain a favorable balance of trade, with more
gold and silver flowing into a nation than going out.
The “physiocrats” believed that land, not gold and silver, was the source
of all wealth. They wanted to end state interference in agriculture and the
commerce of farm products. Writing in Diderot’s Encyclopedia, Francois
Quesnay (1694—1774), a French doctor and economist, called on the monar
chy to free the grain trade and end arbitrary controls on prices, which
states sometimes imposed to preserve public order. He and other phys
iocrats insisted that higher prices for goods would encourage production,
thereby bringing about lower prices over the long run. The physiocrats also
encouraged wealthy landowners to put science to work to increase farm
yields, and wanted enlightened rulers to free the agricultural economy from
tolls and internal tariffs. In England, where commercial agriculture was
already well developed, the physiocrats attracted an interested following.
However, when the oddly named
Anne-Robert Turgot (1727-1781),
Louis XVI’s controller-general, freed
France’s grain trade from controls in
the early 1770s, disastrous shortages
accompanied a series of bad harvests
(see Chapter 11). Hoarding con
tributed to much higher prices; grain
riots followed, and the experiment
soon ended with the old strictures
and controls back in place.
Adam Smith (1723-1790), a
Scottish professor of moral philoso
phy at the University of Glasgow,
argued against some of the hall
marks of mercantilism in his An
Inquiry into the Nature and Causes
of the Wealth of Nations (1776). In
the name of freeing the economy
from restraints, he opposed guild
restrictions and monopolies, as well
Adam Smith admiring his book, The as trade barriers and other forms of
Wealth of Nations. protectionism. Such bold proposals