ABSTRACT
This chapter examines the theoretical structure of Turgot's masterpiece Reflections on the Formation and Distribution of Wealth, especially its concept of 'capital', and clarifies the analytical rigour of his theory about 'value and distribution'. It introduces a brief history of Turgot and his works. The chapter examines the influence of Quesnay and Gournay, after which it discusses progress in agriculture and entrepreneurship, whose role was first considered by Cantillon. It shows how Turgot introduced the concept of capital and what he thought about money. After comparing the price systems of Quesnay and Turgot, the chapter undertakes an in-depth exploration of Turgot's price system and the equalisation of profit rates. Turgot is one of the first economists to use the word 'capital' in economics. In contrast to Quesnay, Turgot rather focused on 'capital' and its capability to generate earnings and profits from any sort of sector or economic activity. One of Turgot's most prominent ideas is his concept of 'capital'.
