Turgot blamed much of the economic decline of Limoges on high taxation of the peasants there. Therefore, he wanted to make taxation more equitably based. The taille was based upon the tax collector's personal estimate of a person's ability to pay – many aristocrats and clergy were exempt from this tax leaving the tax burden on the peasants. Unfortunately, Turgot was unable to abolish the taille. However, he was able to eradicate the corvée which consisted of unpaid forced labor on the royal roads. He was able to replace this forced labor obligation with the paid labor of proper workers, engineers, and contractors who built and improved roads and drainage.

          Serving as intendant of the district of Limoges from 1761-1774, Turgot was able to turn Limoges into one of the more prosperous districts in France. During this time period, he was able to do much more than to eliminate compulsory labor for public work. He took many additional measures to save Limoges from widespread famine. Among the many problems he faced there were: the unequal incidence of the tax burden, unproductive agriculture, scarcity, sporadic famine, restricted markets, inadequate poor relief, poor roads, problems in transporting troops, inadequate schools, inefficient gathering of statistics, and so on.

          Turgot introduced new crops and new agricultural methods for cultivation and storage. In addition, he established agricultural and veterinary schools as a way to improve the quality of labor in the district. He also reduced tariffs, promoted local free trade, especially in corn, and used government funds in the form of loans to grain markets in order to promote imports into Limoges. Furthermore, Turgot instituted a better relief system for the poor. Not only did he provide work for the poor, he also reduced their taxes, established emergency burdens on the rich, and placed special restrictions on landowners.

          In 1766 Turgot drew up a list of questions on economics for two Chinese students whom the Jesuits had sent to study in Paris. To help instruct them in understanding his interrogations, he put his ideas on paper. These 53 pages became his Reflections on the Foundations and Distribution of Riches and included the following themes: the division of labor, the origin and use of money, the improvement of agriculture, the nature of capital and the different modes of its employment, the legitimacy of interest and loans, and revenue from land. Then, in 1769, he wrote Value and Money which developed an Austrian type theory beginning with Crusoe economics and moving to two person exchange, to four person exchange, and finally to a competitive market economy.

          Turgot had a second opportunity to put free market reforms into practice when he served as France's Minister of Finance from 1774-1776. He courageously attempted to save the French monarchy from economic disaster by keeping government spending in check and by encouraging private economic enterprise. Turgot sought a lessening of state activity in many areas. The French government had been running a deficit for years and was close to bankruptcy as a type of welfare state for various privileged and entrenched interests that obstructed change. He wanted to return the country to solvency by reducing expenditures and increasing tax revenue. Turgot expected free markets to bring about increased production leading to lower prices for consumers and to a greater source of tax revenue for the state. He told Louis XVI to cut government spending and to make taxes more equitable or there would be a danger of revolution. As Comptroller-General, Turgot adopted the slogan "No Bankruptcy, No Increase in Taxes, No Loans."

          Turgot was concerned with failure in various markets including those in corn, labor, and land rents. He also observed administrative chaos and the proliferation of self-serving local authorities in the form of bureaus, agencies, boards, courts, and councils. There was also rampant corruption among government officials. In addition, he saw the need for practical political education of France's citizens. Turgot also looked disapprovingly upon the guild system, a carryover from medieval times, which prevented workers from entering certain occupations without permission much like contemporary occupational licensing.

          To a great extent, as Finance Minister, Turgot tried to institute on a larger scale the reforms he introduced at Limoges. His highest priority was to establish freedom of the grain industry in all of France as he had done in Limoges. He said that maintaining free trade in corn is the best way to prevent scarcity in European nations. Turgot opposed strongly government intervention in the corn trade. During 1775 he attempted to reform the taille – a tax abuse that weighed more heavily on the poor. In 1775, he was able to gain enough support to have the controls lifted on the internal trade of grain thus restoring the free circulation of grains sold within France. He also wanted to abolish laws restricting the wine industry. The next year Turgot, in one of his Six Edicts of 1776, officially removed the controls on the prices and transportation of grain, flour, and bread. It was with these Six Edicts that he attempted to transform and refashion the traditional monarchy of France.

          A second of these edicts called for the eventual abolition of guilds which monopolized various trades. There remained only a few exceptions. Turgot viewed work as a creative act and as a key instrument of freedom. To shackle work with restrictions was to violate the right to liberty and to stifle the possibility of change. The guild system involved the use of close corporations which represented the various trades – no one could exercise such trades without going through a long list of formalities. Turgot insisted that these corporations be suppressed except in a few industries.

          In another important edict Turgot abolished the corvée thus furthering the freedom of work. He ended the government's policy of conscripting labor yearly to construct and maintain roads and replaced it with a more efficient tax in money. It had been the practice of the royal department of roads and buildings to conscript the labor of peasants and farm workers, without the payment of wages, in building and repairing the royal highways. Turgot intended, in place of the corvée, to employ a trained road-building force and to pay their wages through a moderate tax increase. Road construction and repair, along with the transportation of military stores, were to be transferred to the supervision of proper engineers. In addition, France was to have transportation of military provisions well-guarded.

          The last three of the six Edicts were of little consequence and dealt with the discharge of government officials who imposed restrictions on ports and docks, abolishing tax on the cattle and meat industries and cutting the tax on suet (i.e., hard animal fat). Unfortunately, the nobility and the upper classes undermined Turgot and his Six Edicts. He ran into insurmountable opposition on the part of nobles, the clergy, and the Parliament of Paris and was dismissed from his position.

          Turgot was a clearly articulated defender of individual and economic freedom who realized that interference with freedom can have systemic effects. He observed that conditions in various markets are interrelated through a reciprocal interdependence. He understood the complex interrelations of the ingredients of land, labor, capital, wages, production, consumption, and so on in the economy. He had a grand conception of an open and dynamic society. He said that government should be limited to protecting individuals against injustices and the nation against invasion. Turgot realized that free commerce was the best protection against scarcity. He wanted to abolish crushing taxes, trade restrictions, monopoly privileges, and forced labor and to reduce government expenditures and public debt. Turgot was opposed to military conscription and protectionism. Although he desired freedom in foreign commerce, he was most interested in eliminating restrictions on France's internal trade. For example, he wanted to introduce banking and taxation reforms. Turgot also wanted to create a scientific system of weights and measures.

          During his two years as Minister of Finance, Turgot proposed a gradual progress of deregulation that put trust in the operation of the open market. His goal was to have general liberty in buying and selling. Moderation and gradualism were his form of tactics. His main efforts were to prepare the public for, and to institute, reasonable and incremental reforms.

          Turgot wanted to see local self-government in France and ultimately a constitutional government of the nation. He desired political liberty and favored constitutional limits on royal power as well as strong regional governments. Turgot therefore proposed a hierarchy of elected assemblies going from the village up to the national level. Although he was sympathetic to American rebels, he himself would not recommend that they go to war. He also warned Americans that slavery is not in accord with a proper political constitution. Turgot also cautioned America about the danger of possible civil war.

          Although Turgot was familiar with, and close to, the Physiocrats with respect to their views on economics, he goes further than they do and in a different direction. Like the physiocrats, he promoted free trade and advocated a single tax on the net product of land. He wanted taxes to be shifted back to agriculture. Turgot agrees with the physiocrats that, because ultimately only agriculture is productive, there should be a single tax on land. Taxation of land was thus the only proper source of revenue for the state. He saw land as a unique form of wealth and presented an early view of the law of diminishing returns in agriculture. Turgot's ultimate goal was actually to eliminate taxes. Not a full-fledged physiocrat, he was more interested in abolishing taxes than exacting them on agricultural land. However, as long as taxation was a reality, his "ideal" in taxation would be a single imposition levied only on land. Turgot recommended taxing only the landowners and not the tenants.

          In his writings on progress, Turgot had analyzed the relationship between agrarian and industrial organizations. He explained that the development of commercial capital activates growth both in the involved industries and in agriculture. According to Turgot, industry yields a surplus that creates a demand, not only for crafts and products created through new technology, but also for products of the soil.

          According to Turgot, each person compares various economic goods, values them, forms ordinal preference scales, and then chooses among them. He does this while considering his present and future wants and needs and the potential uses of the different economic objects. Turgot saw that these values were subjective (i.e., personal) and not able to be measured in any way except ordinally. Explaining the mutual benefits of free exchange, Turgot states that exchange increases the wealth of both parties. He also notes that each transactor wants to gain as much as possible and to surrender as little as possible in a given exchange. Like the much later F. A. Hayek, Turgot spoke of the essential particular knowledge of subjective individual actors who tend to act in their perceived self-interest.

          Turgot observed that the subjective utility of an economic good decreases as its supply to an individual increases – diminishing utility is a function of abundance. A forerunner of the Marginalist Revolution, Turgot conceived of the idea of diminishing marginal productivity of factor inputs. Increasing the quantity of some factors increases the marginal productivity until a maximum point is attained. Past this point, the marginal productivity will decrease, fall to zero, and ultimately will turn negative. Each increase in input would be less and less productive. Essentially, all that Turgot lacked was the idea of the marginal unit.

          Concerned with the classical political economy of scarcity, Turgot saw economics as the allocation of scarce resources to a number of alternative ends. He understood that all costs are opportunity costs because in choosing to employ resources in one way a person has to give up using specific resources in some other productive manner. Turgot views the capitalist-entrepreneur as desiring to earn his imputed salary plus the opportunity cost (today we would say lost contribution margin) that he gave up by not investing his money somewhere else.

          Turgot observed that natural resources must be converted to economic products through the application of human labor and that production takes time to take place. He thus recognized the critical role of time in the production process. In addition, he noted that capital in advance is essential to the production process. The act of waiting, which is necessary in modern production processes, must be rewarded by a return to the suppliers of capital. This return is, at the minimum, equal to the market rate of interest on the capital invested in the company.

          While products are being worked on, there must be advance payments to laborers, who, Turgot explains, are agreeable to paying the capitalists a discount out of production in order to be paid money in advance of the uncertain future revenues. He says that capital advances are essential in all productive enterprises. The interest return on investments can be viewed as the price labor pays to capitalist-entrepreneurs for advancing savings in the form of current money. Turgot emphasized that the time element in production is a function of the use of capital-intensive production methods, the division of labor, and the demand for capital. He apportioned the return to the capitalists into pure interest, depreciation, and entrepreneurial payment that includes a risk premium.

          Turgot recognized that capital was required for economic growth and that the only way to amass capital was for individuals not to consume everything that they had produced. He illuminated the meaning of the term "surplus" and explained the link between surplus and economic growth and progress. Turgot observed that a prosperous economy depends upon the free flow of capital – capital promotes economic activity. The greater the amount of saving, the excess of income over consumption, the higher the accumulation of capital will be. Savings are accumulated in the form of money and then are invested in capital goods. He explains that the advance of savings to the factors of production is the essence of investment.

          Turgot's savings and capital formation analysis is one of his greatest contributions in economics and it became the basis for the 19th century classical theory of savings and investment. He demonstrated clearly the benefit of a policy of capital accumulation and explained that money was essential to the process of accumulating capital and generating economic growth. Money was the required ingredient for transferring savings into investment. Although the surplus accumulated via savings could be held in commodities or in money, Turgot explained that economic society languished before the arrival of metallic money because of the extreme difficulty of aggregating and transforming surplus production into capital. Money allowed people to more easily accumulate and employ their savings.

          Money is also a commodity and is not merely a conventional symbol. Turgot explains that it is a form of wealth and has value in itself. Metallic money is more than a sign of value. He said that gold and silver are money by the nature of things and that precious metals are one of the forms of capital. For him, money was intrinsically valuable in the form of gold and silver. He explained that money had to be a commodity having intrinsic value for it to be useful as a medium of exchange. Turgot was against the perspective that the government could effectively issue paper money as a substitute for metallic money. His favored order is one in which metallic money, representing savings, is loaned to borrowers. Savings, in the form of money, are loaned to entrepreneurs who desire to invest. This money is channeled through moneylenders as intermediaries. Some people earn interest income from loans made to farmers, landowners, merchants, and industrialists. Such financiers promoted the circulation of capital. Money is vital for transferring savings into investments.

          Interest, the price of borrowed money, is determined by the supply and demand for capital and is not immoral. To lend and borrow is the result of a voluntary contract by two parties, each of whom hoped to gain from the transaction. Turgot recognized that a loan is a reciprocal contract between two parties because each believed that it is advantageous to him. Because there exist no exploitation in charging interest, Turgot says that usury laws have been refuted.

          Turgot understood that the explanation for interest is time preference – the phenomenon of discounting the future and of setting a premium upon the present. He explains that the present market value of a capital asset tends to equal the aggregate of the expected annual future returns from it discounted by the market rate of interest (or time preference). Turgot also emphasized that an entrepreneur's expected profits must exceed the loan rate of interest in order for a loan to have taken place – he saw the relationship between the profit rate and the interest rate.

          Turgot asserted that the rate of interest was determined in the market via exchange. He perceived the relationship between the interest rate and the quantity of money. More specifically, he observed the interrelationship among the supply and demand for money and people's time preferences which come together to affect the relative amounts of spending and saving and the interest rate. Turgot saw that a decrease in thrift would raise interest rates and vice versa. He explained that a low interest rate is a function of a high savings rate and that a low interest rate propels the economy to high rates of economic growth. Turgot noted that a change in the rate of accumulated savings affects the interest rate which changes the allocation of resources in the economy. He also talked about the difference between the natural rate of interest that would occur in a free economy and the actual interest on loans (i.e., the difference between the real and nominal rates of interest). Similarly, he distinguished between a product's natural price and its market price.

          Turgot said that money can be employed to: (1) purchase land for cultivation or to lease to farmers; (2) invest in industry by acquiring buildings, materials, and tools for manufacturing; (3) invest in agriculture by renting land and purchasing stock and implements for agricultural entrepreneurship; (4) invest in trade by buying finished goods and other requirements for commercial activities; and (5) lend money to others for the above purposes. According to Turgot, all these activities either directly or indirectly return money to the circular flow – there are no leakages. His analysis of savings and investment thus foretells classical analysis which denies the possibility of leakage from the exchange process and, therefore, the possibility of a general glut of products. It is clear that Turgot anticipated J.B. Say's Law of Markets.

          Turgot was for the freedom of domestic and foreign trade and against mercantilist regulation, forced cartelization, and special privileges conferred by the government. He said that regulation involves expenses that become a tax on products – the result is overcharging domestic customers and discouraging foreign purchasers. He wanted sound money and warned against the dangers of fiat paper money. Turgot also explained that individual self-interest moves society forward and is in accord with the general interest. He also anticipated the diminishing marginal utility theory of Carl Menger and others. Turgot explained that a person can only pay taxes by reducing consumption and that there was no logical basis for levying different rates on different products. He, like the physiocrats, believed that the strain of taxation should fall only on the owners of land because of the very nature of the world. Turgot was a low-interest advocate who contended that money was the foundation of capital. He saw savings as a real phenomenon that facilitates greater investment in the economy. For a busy man of affairs who found little time to devote to economics, he certainly has made some monumental contributions in that field.