Laissez-faire, a term often associated with the freedom-loving libertarian school of modern day economic and political thought, means, rather simply “let them do,” and is usually paired with the term laissez-passer, which speaks to the freedom of government control over people’s actions.

These two terms originate from Vincent de Gournay (1712-1759) in France, speaking rather dispiritedly at Mercantile government intervention in economic affairs. French industry was hampered by local authorities placing taxes and tariffs on business, and inherently diminishing economic productivity through prevention of experimental business and competitive growth. Production was diminished by government dictation of quality, production and methods of production, while agriculturalists and landowners were subjected to negative economic forces in the form of conditions, rules and taxation.

Incentives in prior-day France were heavily impaired by interventionism.

Arising from the identification of these problems, Physiocrats (literally, translating to something like “rule and law of nature”) believed in a natural order to things that political and government forces was negatively effecting. They, in effect, believed in a pre-cursor to Adam Smith’s “invisible hand” theories, in that the markets and economy draw themselves towards the “general well-being.”

The major fallback of Physiocratic thinking, however, was the misidentification of the development of wealth. Where Mercantilists thought wealth could not be developed, and only redistributed, Physiocrats believed that the only source of wealth generation was agriculture - other industries don’t produce anything new, they thought, and therefore only agriculture, which produces a physical commodity more than it’s input costs could be a non-sterile industry. Other industry, trade, and research was still believed to be useful, but not productive - rather, only a redistribution of existing resources. This thought process was later replaced by the current belief that technology, economic endeavors, thought, capital accumulation and human capital can all effect economic value in a positive way.

Physiocrats repealed all taxes against those who weren’t landowners, following in the believe that only agriculture produced new value, saying that the landowner received it’s productivity in the form of rent (either in production, or in the common-sense use of the term rent) therefore any taxes imposed on others would simply be passed on to the landowner - this idea alone, originated the thought of the circular flow of the economy.

Much of this theory was probably true at the time - industry and non-food production was probably mostly sterile, simply due to an overwhelmingly poor citizenry, where only nobility would be able to afford these industries. Physiocratic theory may have influenced society in a positive way, despite being incorrect economically. Furthermore, Physiocratic beliefs about rent and landowner taxes have recurred numerous times in history - with a number of politicians and economists pushing the idea of confiscating rent and the profit of the land in such a way that taxes are acquired mostly in the same way as that of the Physiocratic France.

Physiocrats were hugely appreciative to the existence of capitalist managed farms, where labor was hired and advanced organization and productivity techniques made the land more productive. This groups produced the most economic value, and, in Physiocratic theory, would increase the relative power of “them vs. us,” while increasing tax revenue.

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