The Origins of Economic Theory

This chapter discusses Mercantilism and Physiocracy, two schools of economic thought that emerged before and during the last quarter of the nineteenth century, respectively. The characteristic feature of Mercantilism was the search for economic laws in the sphere of circulation, while Physiocrats focused on identifying economic laws in the sphere of production, specifically in agriculture—the sole sector capable of generating surplus. Mercantilists are acknowledged for the practicality of their economic policy proposals, whereas Physiocrats are renowned for their Tableau Economique, a prototype of modern input–output tables.