Since the beginning of human history, individuals never stopped seeking wealth. The acquisitiveness of wealth inspires us to discover the source of wealth, and also implicitly promote civilization and the economic growth. This article will provide a specific analysis of the views about sources and distribution of wealth from physiocrats, Turgot and Adam Smith, respectively.
1. Physiocrats and Quesnay
Physiocrats hold the opinion that agriculture is the only source of wealth. One of the representatives of physiocrats is François Quesnay, and the concept of ‘Net product’ is the theoretical basis of his further researches. He believes that under the perfect competition condition, exchange is an equivalent trade with the products of the same production costs, therefore, trade is not able to yield a surplus and it’s not the source of wealth. With the involvement of nature source, agriculture improves the use value, while other sectors only combine those values and convert it into a new value without enhancing it (Charbit and Virmani, 2002, p.858). According to this, Quesnay divided the society into three groups to indicate their economic relations, which are “productive class”, proprietors and “sterile class” (Quesnay, 1764, p.3). Productive class produces the ‘net product’, ‘sterile class’ doesn’t increase the wealth but can create the goods that fulfil people’s need. Landowners will not create the wealth directly, but their consumption will decide the scale of reproduction.
The Tableau économique illustrated the production, circulation and the distribution of wealth, Friedrich Engels (1878) in ‘Anti-Duhring’ epitomized it as a marvellous exploration of the process of ‘reproduction’. In the circulation, farmers spend their money on...
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...ut the wage cannot be lower than the maintenance (Smith, 2005, p.61). Secondly, the profit of stock is determined by the wealth of the society (Smith, 2005, p.77).While the increase of stock will also increase the wage but decrease the profit of capitalist. Thirdly, rent of land depends upon the ‘circumstances of the land’ (Smith, 2005, p.124). And rent is different from wage and profit, it is determined by the price.
From physiocrats to Turgot and Adam Smith, the explanation of wealth has continued to evolve. And the source of wealth altered gradually from ‘gift from the nature’ to the productive labour. They all tried to clarify the circulation of the money or capital, and advocated free trade to different extent. These theories further the social progress under the background at that time, and still have some reference for today’s economic growth.