Quesnay was born at Merey, in today's Eure département, near Paris, the son of an advocate and small landed proprietor. Apprenticed at the age of sixteen to a surgeon, he soon went to Paris, studied medicine and surgery there, and, having qualified as a master-surgeon, settled down to practice at Mantes. In 1737 he was appointed perpetual secretary of the academy of surgery founded by François Gigot de la Peyronie, and became surgeon in ordinary to the king. In 1744 he graduated as a doctor of medicine; he became physician in ordinary to the king, and afterwards his first consulting physician, and was installed in the Palace of Versailles. His apartments were on the entresol, whence the Réunions de l'entresol received their name. Louis XV esteemed Quesnay much, and used to call him his thinker; when he ennobled him he gave him for arms three flowers of the pansy (derived from pensée, in French meaning thought), with the Latin motto Propter ex cogitationem mentis.

He now devoted himself principally to economic studies, taking no part in the court intrigues which were perpetually going on around him. Around 1750 he became acquainted with Jean C.M.V. de Gournay (1712–1759), who was also an earnest inquirer in the economic field; and around these two distinguished men was gradually formed the philosophic sect of the Économistes, or, as they were afterwards called, the Physiocrates. The most remarkable men in this group of disciples were the elder Mirabeau (author of L'Ami des hommes, 1756-60, and Philosophie rurale, 1763), Nicolas Baudeau (Introduction a la philosophie économique, 1771), G.F Le Trosne (De l'ordre social, 1777), André Morellet (best known by his controversy with Galiani on the freedom of the grain trade during the Flour War), Mercier Larivière, and du Pont de Nemours. Adam Smith, during his stay on the continent with the young Duke of Buccleuch in 1764-1766, spent some time in Paris, where he made the acquaintance of Quesnay and some of his followers; he paid a high tribute to their scientific services in his Wealth of Nations.

Quesnay died on December 16, 1774, having lived long enough to see his great pupil, Anne Robert Jacques Turgot, Baron de Laune, in office as minister of finance. He had married in 1718, and had a son and a daughter; his grandson by the former was a member of the first Legislative Assembly.

The publications in which Quesnay expounded his system were the following: two articles, on "Fermiers" and on "Grains", in the Encyclopédie of Diderot and D'Alembert (1756, 1757); a discourse on the law of nature in the Physiocratie of Dupont de Nemours (1768); Maximes générales de gouvernement economique d'un royaume agricole (1758), and the simultaneously published Tableau économique avec son explication, ou extrait des économies royales de Sully (with the celebrated motto, Pauvres paysans, pauvre royaume; pauvre royaume, pauvre roi); Dialogue sur le commerce et les travaux des artisans; and other minor pieces.

The Tableau économique, though on account of its dryness and abstract form, met with little general favor, may be considered the principal manifesto of the school. It was regarded by the followers of Quesnay as entitled to a place amongst the foremost products of human wisdom, and is named by the elder Mirabeau, in a passage quoted by Adam Smith, as one of the three great inventions which have contributed most to the stability of political societies, the other two being those of writing and of money. Its object was to exhibit by means of certain formulas the way in which the products of agriculture, which is the only source of wealth, would in a state of perfect liberty be distributed among the several classes of the community (namely, the productive classes of the proprietors and cultivators of land, and the unproductive class composed of manufacturers and merchants), and to represent by other formulas the modes of distribution which take place under systems of Governmental restraint and regulation, with the evil results arising to the whole society from different degrees of such violations of the natural order. It follows from Quesnay's theoretic views that the one thing deserving the solicitude of the practical economist and the statesman is the increase of the net product; and he infers also what Smith afterwards affirmed, on not quite the same ground, that the interest of the landowner is strictly and indissolubly connected with the general interest of the society. 

His economic writings are collected in the 2nd vol. of the Principaux économistes, published by Guillaumin, Paris, with preface and notes by Eugène Daire; also his OEuvres économiques et philosophiques were collected with an introduction and note by August Oncken (Frankfort, 1888); a facsimile reprint of the Tableau économique, from the original MS., was published by the British Economic Association (London, 1895). His other writings were the article "Évidence" in the Encyclopédie, and Recherches sur l'évidence des vérites geometriques, with a Projet de nouveaux éléments de géometrie, 1773. Quesnay's Eloge was pronounced in the Academy of Sciences by Grandjean de Fouchy.

Descriptions of Quesnay’s economic theory are normally based on the texts which are read from the point of view of today’s mainstream neoclassical theory. Understood within a historical context and the point of view of the contemporary classical economic theory, these texts reveal a different content. Quesnay’s thinking is shaped by the systemic circulation of blood rediscovered by William Harvey in 1649. Quesnay financed his studies by engraving anatomical copperplates, so he knew what he was talking about. At this time physicians explained bloodletting according to Galen: an infection can be cured by lowering blood pressure at a spot well away from the infection. Quesnay – using a system of tubes – demonstrated that to diminish pressure the spot is irrelevant. This proof advanced by a surgeon, someone quite below the social standing of physicians, annoyed the physicians; but it gave fame to the country surgeon Quesnay who in 1749 became personal physician of the Pompadour.

This dispute was no a trifle, it was a clash between medical paradigms. Bloodletting was recommended by Galen, 129 – 200 AD, whose theories dominated Western medical science for over a millennium, but whose original texts became accessible to West-European physicians only by translations from Greek into Latin at the beginning of the Renaissance. According to Galen blood has a one-way flow from the heart to the organs where it is consumed. Quesnay based his argument on the systemic circulation of blood rediscovered by William Harvey (1578–1657) in 1628, which became conclusive only when Malpighi in 1661 discovered the capillaries. So Quesnay’s argument supposed that blood was recycled, something incomprehensible within the system of Galen. It was a discussion between deaf. But there is an interesting analogy in economic theory: As for Galen blood is consumed by organs and for Harvey blood is recycled, so in neoclassical economics commodities flow one-way to be destroyed by producing personal utility and in classical economics at least the output of “productive” labour is input to the next economic circle.

Quesnay’s interests in economics arose about 1750 when his position at the court confronted him with France’s proximate national bankruptcy. He regarded the economic circle of commodities as similar to the blood circle dispensing with the pulmonary circle as the role of the lung was still not understood. Lavoisier’s experiments with oxygen started a bit later. As the heart has a special importance for the organs, so has according to Quesnay agriculture for the social and economic system.

Historically France’s kings had a weak position vis-à-vis their barons. To increase his independence the king impoverished the high nobility by forcing them to be present at the Court, to outmatch each other in luxury and to neglect their properties. The Palace of Versailles was built in this tradition. Half a percent of the population – the high nobility boasting to descend from the Germanic conquerors and the Church populated with nobles – drew almost the totality of the nation’s net income. So the quasi-totality of demand for artisan and industrial services came from a social sector who offered no input to the circular economic flow. And if Nobility and Church were irrelevant for economic reproduction, so were those working for them: the artisans. Classical economic theory from Adam Smith to John Stuart Mill made Quesnay’s argument about “unproductive labour” one of its central propositions. In his Tableau Économique Quesnay shows that the landed class (nobility and church) obtained agricultural and industrial services but does not produce anything apart from letting their land to the farmer, that the artisans paid to agriculture and other artisans as much as they produced and that only the farmers retained a net profit after restocking production costs and supplying the landed class and the artisans. Of course, Quesnay could not openly declare that the landed class and all working for them were parasites. He could not criticise the system he wanted to save. The politically correct way to say the same was to declare artisans and manufacturers as “classe sterile”. So Quesnay asserts a difference between the work an artisan and a farmer. The price of industrial commodities is determined by costs of re-production. Competition will level higher prices to this “natural” standard. Agricultural prices are above costs of reproduction, so that only agriculture creates wealth whereas all other sectors are only reproductive. One reason that an increased agricultural supply does not reduce prices is the quasi unlimited demand. Quesnay’s distinction between agricultural and industrial prices can be understood by the very different British distinction of these sectors. David Ricardo explains that an increase in agricultural production will increase prices because less productive land will be ploughed. But an increase of production of industrial commodities will lower costs of production per piece and therefore prices. To Quesnay this is the other way round, historically quite correct.

Adam Smith’s famous assertion that a widening of markets leads to increased production with decreasing unit costs because of a deepening of the division of labour and induced inventions refers only to mass production. The artisans of France however had a made-to-order production; the production of luxury goods offers normally no economies of scale. Quesnay coached Adam Smith in Paris to argue in economic circles and Smith intended to dedicate him the “Wealth of Nations” had Quesnay not died before. But even Smith could not grasp some physiocratic ideas because of their special relation to the French situation which was very different from the British notably concerning the distribution of wealth. England’s industrial revolution was preceded by an agrarian revolution which adopted Chinese inventions – of course without acknowledging it. The north of France showed already examples of a capitalistic agriculture following the British line. An adoption of the British model for all of France promised a surge of productivity as a precondition of a future industrial development. Quesnay’s assertion that the future of France lay in an agricultural development and not in the extension of present industrial structures is an analytical master piece not equalled. The demand of this future capitalistic agriculture for industrial goods offers a new market for French industry. Serving this market French industry and trade will become “productive” because its output becomes the input of the next economic circle. And this industrial production will show “decreasing costs”. To call industry and crafts a "classe stérile“ is therefore generally false, but in this historical situation correct.

With Turgot as "contrôleur général des finances”, 1774, the first steps were made to implement the physiocratic programme. But as many personalities and groups made their profit from the former financial chaos, Turgot’s reforms swelled the resistance. Abrogating grain customs within France, he harmed many noble tax collectors who paid a fix sum to the king to collect three times more. The bad harvest of 1774 raised wheat prices and tax collectors promoted rumours that now with free trade even the king gained by grain speculation. People marched to the gates of Versailles. When in 1776 Turgot proposed to abolish enforced rural labour and the urban guilds as a first step to abolish all privileges, the king sided with his enemies and asked for Turgot’s resignation. His adversary Jacques Necker became Director-General of Finance and the physiocratic ideas lost immediately all importance in the Parisian salons where now Madame Necker was presiding. More loans rather than raising taxes to fund the French debt and the French involvement in the American Revolution paved the way for the French Revolution.