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Anne Robert Jacques Turgot

Anne Robert Jacques Turgot

French economist

Probably Turgot’s most important contribution to economics was to point out that capital is necessary for economic growth, and that the only way to accumulate capital is for people not to consume all they produce. Most capital, he believed, was accumulated by landowners who saved the surplus product after paying the cost of materials and of labor. Turgot agreed with Quesnay’s notion of the circular flow of savings and investment, where savings in one period become investment in the next.

Turgot distinguished between a commodity’s market price—determined by supply and demand—and its “natural” price, the price it would tend to if industries were competitive and resources could be reallocated. An increase in demand, for example, could increase a good’s price, but if resources were free to enter that industry, the new supply would bring the price back down to its “natural” level. In this reasoning Turgot anticipated Adam Smith.

Turgot applied many of his laissez-faire economic beliefs during his thirteen-year appointment (1761–1774) as chief administrator for the Limoges district under Louis XV and as minister of finance, trade, and public works from 1774 to 1776 under newly anointed Louis XVI. In the latter job one of his first measures was to abolish all restrictions on sales of grain within France, a measure the Physiocrats had long advocated. He ended the government’s policy of conscripting labor to build and maintain roads, and replaced it with a more efficient tax in money.

Milton Friedman has called the replacing of taxes in kind with taxes in money “one of the greatest advances in human freedom.” Turgot abolished the guild system left over from medieval times. The guild system, like occupational licensing today, prevented workers from entering certain occupations without permission. Turgot also argued against the regulation of interest rates.

Timeline

May 10, 1727
Anne Robert Jacques Turgot was born in Paris.

Patents

Further Resources

Title
Author
Link
Type
Date

"Reflections on the Formation and Distribution of Wealth" - Econlib

Web

Anne Robert Jacques Turgot

Web

June 26, 2016

Anne-Robert-Jacques Turgot

Web

May 29, 2015

Correspondance inédite de Condorcet et de Turgot 1770-1779: publie?e avec des notes et une ... : Anne Robert Jacques , Turgot, Charles Henry : Free Download, Borrow, and Streaming : Internet Archive

Anne Robert Jacques Turgot

Web

1883

El pensamiento económico de Turgot

Web

March 14, 2019

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References

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