Precursors
Physiocracy is an agrarianist philosophy. In the late Roman Republic, the dominant senatorial class was not allowed to engage in banking or commerce but relied on their latifundia, large plantations, for income. They circumvented this rule through freedmen proxies who sold surplus agricultural goods.
After the decline of the Roman Empire, de-urbanization led to commerce ceasing and trade declining throughout most of western Europe. Economies became centered on agricultural manors where warrior-landlords, the medieval nobility, collected rent from their serfs in the form of produce. This was the dominant economic system until trade began to revive in the Late Middle Ages, fostering the rise of the merchant class.
Another inspiration came from China's economic system, then the largest in the world. Chinese society broadly distinguished four occupations, with scholar-bureaucrats, who were also agrarian landlords, at the top and merchants at the bottom (because they did not produce but only distributed goods made by others). Leading physiocrats like François Quesnay were avid Confucianists who advocated China's agrarian policies. Some scholars have advocated connections with the school of Agriculturalism, which promoted utopian communalism.
Read more about this topic: Physiocrats