ABSTRACT OF PAPER
Title: On the source of rent and its role on the formation of value –– from the view of the circular flow analysis à la pre-classical French school
Author: Kuroki Ryuzo
The law of nature à la Quesnay is the law of nature characterized by “physis” in Greek philosophy and moral science, and for physiocrats, economic society works for its own sake. This idea sharply contrasts with Colbertism which concludes that society ought to be controlled carefully by the state through protection and restraints. Being asked what could guarantee the autonomous and balanced pursuit of the economy under the laissez-faire et laissez-passer, the economists (of the liberal group) replied that free competition will bring autonomous equilibrium and the maximum benefit to society spontaneously. The Tableau Économique which tried to demonstrate that the national economy could reproduce itself autonomously under free competition, was considered to show the natural order of society. Physiocrats saw the whole thing as the natural ‘reproduction créatrice’. They thought of the economic system as the reproduction (circular flow, not in equilibrium). Under such natural order, “la reproduction se perpétue par les dépenses, et les dépenses se perpétuent par la reproduction”. Quesnay wrote: “Les revenus sont le produit des terres et des hommes. Sans le travail des hommes, les terres n’ont aucune valeur.” Both human labor and land must be indispensable for creating wealth. In this presentation, we will examine the price system that consists of a dichotomy between the determination of the price of agricultural products and that of manufactured goods. And there, we will show the peculiar treatment of rent by physiocrats, which let it form the “produit net” that will pass to landlords.
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