Note 50 — Chapter I · : THE PHYSIOCRATS

“In the third line—they generally occupy the first rank—we have the landed proprietors who prepare the soil, build houses, make plantations and enclosures at their own expense or who pay for those outlays by buying property already developed. This revenue, they might argue, belongs to us because of the wisdom and forethought we have exercised in preparing the land, in undertaking to keep it in repair, and to improve it still further.” (Baudeau, Philosophie économique, p. 757.) “The foremost and most essential agent of production must be that man who makes it possible. But who is this agent but the landed proprietor, whose claims to his prerogatives are based upon the need for his productive services?” (Mercier de la Rivière, pp. 466-467.)

“It is this expenditure that makes the claim of proprietors real and their existence just and necessary. Until such expenditure is incurred the right of property is merely an exclusive right to make the soil capable of bearing fruit.” (Baudeau, p. 851.) In other words, so long as the proprietor has not incurred some expenditure the right of property is simply reduced to occupation.

The Physiocrats distinguished three kinds of avances:

1. The annual expenditure (avances annuelles) incurred in connection with the actual work of cultivation, which recurs every year, such as the cost of seed and manure, cost of maintaining labourers, etc. The annual harvest ought to repay all this, which to-day would be called circulating capital.

2. The “original” outlay (avances primitives) involved in buying cattle and implements which render service for a number of years, and for which the proprietor does not expect to be recompensed in a single year. The return is spread out over a number of years. Here we have the distinction between fixed and circulating capital, and the idea of the gradual redemption of the former as against the total repayment of the latter at one single use. It did not escape the Physiocrats’ notice that an intelligent increase of the fixed might gradually reduce the annual expenditure. Such ideas were quite novel. But they immediately took their place as definite contributions to the science. They are no longer confined to agriculture, however, but apply equally to all branches of production.

3. The avances foncières are the expenses which are undertaken with a view to preparing the land for cultivation. (The adjective “primitive” would have been better applied here.)

The first two kinds of expenditure are incumbent upon the agriculturist and entitle him to a remuneration sufficient to cover his expenses.

The third is incumbent upon the proprietor and constitutes his claim to a share of the funds. “Before you can set up a farm where agriculture may be steadily practised year in and year out what must be done? A block of buildings and a farmhouse must be built, roads made and plantations set, the soil must be prepared, the stones cleared, trees cut down and roots removed; drains must also be cut and shelters prepared. These are the avances foncières, the work that is incumbent upon proprietors, and the true basis of their claim to the privileges of proprietorship.” (Baudeau, Éphémérides, May 1776. A reply to Condillac.)