History of Economic Thought

The economic thought of the Ancient East has basically a religious form and is subordinated to the solution of social and political problems. In the economic works of the time, the problems of economics as a whole did not become the subject of scientific analysis . At the same time, the economic works contained recommendations on the management of the state and control over the economic activities of citizens ^[1] .

The economic thought of antiquity was reflected mainly in the writings of ancient Greek thinkers: Xenophon , Plato , Aristotle in the 5th — 4th centuries. BC e., first subjected to economic phenomena of scientific analysis and trying to identify patterns of development of society ^[2] .

The thinkers of ancient Greece not only put the most difficult economic questions, but also gave answers to them. They introduced the term “ economy ” and the “ economy ” derived from it. Economy was understood as science, with the help of which one can enrich one's economy. They also put forward the idea of ​​the division of labor , suggested that the basis of equality between goods is something common, making them comparable, for the first time made a distinction between simple commodity circulation and circulation of money as capital. The economic discoveries of the thinkers of ancient Greece contributed to the further development of economic science ^[3] .

Thomas Aquinas

Thomas Aquinas (1225–1274) is an Italian theologian and economist. He taught in Cologne and Paris, and was part of a group of Catholic scholars known as Schoolmen, who moved their questions beyond theology to philosophical and scientific debates. In the treatise Summa Theologica, he considers the concept of a fair price, which he considers necessary to reproduce social order. In many ways, this concept is similar to the modern concept of long-term equilibrium, the fair price was enough to cover production costs, including the maintenance of the worker and his family. Thomas Aquinas argued that it was immoral for sellers to raise prices only because buyers have an urgent need for a product.

John Duns Scot

One of the main critics of Thomas Aquinas was Duns Scott (1265–1308), a native of Duns , Scotland , who taught in Oxford, Cologne and Paris. In his work “Sententiae” (1295), he was able, more precisely, as he believed, than Thomas Aquinas, to calculate a fair price, emphasizing labor costs and costs, although he acknowledged that the latter may be inflated due to exaggeration, since the buyer and The seller usually have different ideas for a fair price. According to Scotus, if people do not benefit from the deal, they will not trade. Scott said that merchants perform the necessary and useful social role by transporting goods and making them available to the public. ^[four]

Jean Buridan

Jean Buridan (ca. 1300 - after 1358) was a French priest. Buridan considered money from two sides: as the value of the metal and its purchasing power, which, he acknowledged, may vary. He argued that aggregate rather than individual supply and demand determine market prices. Consequently, for him the fair price was that society is collective, and not one person is willing to pay.

Ibn Khaldun

Prior to Joseph Spengler's 1964 work, “The Economic Thought of Islam: Ibn Khaldun” ^[5] Adam Smith (1723–1790) was considered the “father of economics”. After the release of this work, a second candidate appeared - Arab Muslim scholar Ibn Khaldun (1332–1406) from Tunisia, although it is unclear what influence Khaldun had in the West in the Middle Ages. Arnold Toynbee called Ibn Khaldun a “genius” who “didn’t seem to have been inspired by his predecessors and didn’t find soul mates among his contemporaries ... and yet, in the Muhammad for his Universal History, he conceived and formulated the philosophy of history, which is undoubtedly the greatest work of its kind that has ever been created by any mind at any time and in any place. ” ^[6]

Ibn Khaldun expressed the theory of the life cycle of civilizations, the specialization of labor and the value of money as a means of exchange, and not as a repository of intrinsic value. His tax ideas had a striking resemblance to the Laffer curve in the supply economy, which claims that, beyond a certain point, higher taxes impede production and actually lead to a drop in income. ^[7]

Nikolai Orem

The French philosopher and priest Nicolas d'Oresmet (1320–1382) wrote a treatise “On the origin, essence and circulation of money” ( De origine, natura, jure et mutationibus monetarum ). This is one of the earliest manuscripts about the concept of money.

Antonin Piercioc

Antonin Pierozi is a saint of the Catholic Church, a Dominican monk who became the Archbishop of Florence. The works of Antonin relate to socio-economic development and argue that the state is obliged to intervene in commercial affairs for the common good, as well as to help the poor and needy. In his main work, Summa Theology, he pays special attention to questions of price, equity, and capital theory. Like Duns Scott, he distinguishes between the natural value of a commodity and its practical value. The latter is determined by its suitability to meet the needs (virtuositas), its rarity (raritas) and its subjective value (complacibilitas). Because of this subjective component there can be not only one fair price, but also the carrying capacity of more or less fair prices.

The essence of mercantilism was reduced to wealth, primarily to gold, for which everything could be bought, since the money of that time was precious metals.

Physical economics, physiocracy is an economic school, one of the scientific approaches to the study and organization of economics, the subject of study of which are economic processes measured in physical (natural) values ​​and methods of controlling the exchange of matter-energy-momentum-information in human economic activity, subject to the laws physics.

Adam Smith ( 1723 - 1790 ), the founder of classical political economy, primarily investigated and emphasized the importance of the concept of economic value and wealth distribution among classes - workers, capitalists and landowners, explained the work of the free market based on internal economic mechanisms that they called invisible hand , not external political control.

The final stage of the evolution of classical political economy is represented by the works of JS Mill , in whose works the principles of the classical school found their final embodiment, and the book Principles of Political Economy became the main economic textbook of the English-speaking world.

In Russia, the birth of the economy as a science is primarily associated with the Imperial Free Economic Society , founded in 1765. At the origins of society were large landowners who saw the task of society in improving the efficiency of agricultural production in Russia. In particular, the prominent Russian agronomist and pomolog Andrei Timofeyevich Bolotov worked in it, in whose works agronomy often merges with the economy. ^[eight]

The Marxist trend in political economy is one of the branches of the classical school. Marxism - Marxist economic theory (Marxist economics): the direction of classical economics developed by Karl Marx (1818–1883), which gave economic thought a strong political tone. Developing the concept of D. Ricardo about labor as a source of economic value ( labor theory of value - the labor theory of value ), Marx argued that during the production process capitalists derive surplus value from the labor of workers, leaving them with only the wages necessary for existence. From the point of view of Marx, the capitalist economy must go through ever deeper crises that will change the consciousness of the working class, which will eventually destroy capitalism , and then the state will come under the control of the working people.

The neoclassical school, currently dominant in Western economic thought, emphasizes the importance of the distribution of limited resources among competing economic agents. It was formed in the 70s of the XIX century as a result of the “ marginalist revolution”, which consisted in the use of limit values ​​in the study of the laws of economic processes. The founders of this school are US Jevons (1835–1882) and L. Walras (1834–1910).

Alfred Marshall combined the theories of classical political economy and marginalism; his main work, Principles of Economic Science, replaced the book by J. S. Mill as the main textbook in the United States, England and other countries.

Neoclassical economic theory is divided into two broad areas of research: microeconomics (microeconomics), which analyzes the relationship between individual economic units (consumer, company, etc.), and macroeconomics (macroeconomics), analyzing the relationship between aggregated economic values ​​across countries. In both of these areas, the main objects of study are national economies, corporations and households.

Austrian school

The Austrian school is the direction of economic thought in the framework of marginalism, emphasizing the role of freedom of economic relations and the fundamental importance of market pricing. Among other things, school representatives deny the role of mathematical modeling as a research technique. In macroeconomics, they favor restricting state regulation.

Compared with the classical approach, the Keynesian direction appeared not so long ago. The book with which it began its existence, The General Theory of Employment, Interest and Money , by the British economist John Maynard Keynes , appeared in 1936, 160 years after Adam Smith’s The Wealth of Nations . In 1936, the capitalist world suffered from the Great Depression . The unprecedented high level of unemployment hit most of the world’s economies for years. From the point of view of Keynes, the classical theory showed a serious discrepancy to real events, which necessitated the creation of a new macroeconomic theory.

Neo-Keynesianism

In the postwar years, Keynesianism has undergone significant changes. A group of economists has integrated the neoclassical microeconomic positions with the macroeconomic provisions of the Keynesian school. This direction was called neoclassical synthesis and occupied a dominant position in the economic mainstream. Principles of neoclassical synthesis Paul Samuelson formulated in the textbook " Economics: an introductory analysis ", which has become the most popular textbook in developed countries.

In the field of macroeconomics, theories of economic growth and cyclical development were created.

Macroeconomic theory, according to which the amount of money in circulation is a determining factor in economic development. One of the main directions of neoclassical economic thought. It originated in the 1950s as a series of empirical research in the field of money circulation. Despite the fact that M. Friedman was the founder of monetarism, the name of the new economic theory was given by K. Brunner .

The concept of institutionalism includes two aspects: “institutions” - norms, customs of behavior in society, and “institutions” - the consolidation of norms and customs in the form of laws, organizations, institutions.

The meaning of the institutional approach is not to limit the analysis of economic categories and processes in a pure form, but to include institutions in the analysis, to take into account non-economic factors.

The combination of the main currents of modern economic thought in the West has been called the mainstream .

The strongest scientific current at the moment ^{[ clarify ]} in the world - it is neoclassical. Last 10 years ^{[to clarify ] were} marked by the flourishing of new institutionalism , but the final victory of this school in the “battle for the minds” has not yet happened. Also now have their active followers of the ideas of Keynes, which are issued in the form of a new school - the new Keynesianism .

There was competition between schools, but many schools that existed at the same time did not compete with each other, as they were studying various aspects of the economy.

According to the largest historian of economic thought, Joseph Schumpeter , the first publications devoted to the study of the history of economic concepts were articles by French physiocrat Pierre Dupont de Nemours in the journal Ephemeris in 1767 and 1768. Also, a serious analysis of early economic views was conducted by the founder of modern economic theory, Adam Smith, in his 1776 treatise “ Research on the nature and causes of the wealth of nations ”. The Scottish scientist in this work examines the basic concepts of the time - mercantilism and physiocracy . ^[9]

In the XVIII century, along with the development of economic theory, there are also works devoted to the study of already established economic doctrines. So, in the years 1824−1825 reviews of the economic views of a follower of D. Ricardo J. R. McCulloch appear . In 1829, the French economist Jean-Baptiste Say devoted the history of science to the 6th volume of his "Complete Course in Practical Political Economy". In 1837, the History of Political Economy in Europe was published by the French economist Jerome Blanca . In 1845 another work by J. R. McCulloch entitled “Political Economic Literature” was published. Also, an analysis of economic views can be found in the 1848 book of the German economist Bruno Hildebrand “The Political Economy of the Present and the Future” and the publications of his compatriot Wilhelm Roscher . In the years 1850–1868 several articles were published on the review of the economic doctrines of the Italian scientist Francesco Ferrara . In 1858, the Russian economist I.V. Vernadsky published "An Essay on the History of Political Economy." In 1871, the German philosopher Eugene Dühring published “A Critique of the History of National Economy and Socialism”, and in 1888 the Irish economist J. K. Ingram's book “ The History of Political Economy ” was published. ^[9]

In the 19th century, economic theory arose in the form of separate courses at law faculties of universities, then special economics departments appeared, a circle of professional economists was formed. Thus, in 1805, the English economist Thomas Malthus became a professor of new history and political economy at the College of the British East India Company ; in 1818, a position of professor of moral philosophy and political economy appeared at Columbia University in New York ; in 1819, French scientist Jean-Baptiste Say occupied the Department of Industrial Economy at the Paris Conservatory of Arts and Crafts. Political economy began to be taught as a special subject in 1825 at Oxford , in 1828 at University College London , and in 1832 at the University of Dublin . ^[9]

Among Russian works on the history of economic studies of the 19th and early 20th centuries are the Essay on the History of Political Economy, 1883, by I.I. Ivanyukov , The History of Political Economy, 1892, by A.I. Chuprova , The History of Political Economy, 1900. L.V. Fedorovich and the “History of Political Economy. The philosophical, historical and theoretical beginnings of the 19th century economy. ”1909 A.N. Miklashevsky . Within the framework of the book Economic Sketches , the Russian scientist V. K. Dmitriev analyzes the main tenets of D. Ricardo's theory of labor value and rent , I. von Tyunen's distribution concept, O. Cournot’s competition models and the basic tenets of marginalism using mathematical methods ^[9] . A valuable contribution to the study of the history of the economic theories of ancient China was made by V. M. Stein , who translated and studied the economic chapters of the ancient Chinese monument Guanzi .

The great English economist Alfred Marshall made his contribution to this area of ​​economic knowledge; he included in his 1891 treatise “Principles of Economic Science” an application called “The Development of Economic Science”. "The history of theories of production and distribution in English political economy from 1776 to 1848." English economist E. Kennan , published in 1893, contains an interpretation of the ideas of D. Ricardo, James and John Stuart Milley , T. Malthus and others. Thus, the formation of the history of economic science was completed at the end of the 19th and the beginning of the 20th centuries. By this time, the history of economics was already taught in the Sorbonne in Paris. ^[9]

Among the works of the beginning of the 20th century devoted to the study of economic views, Karl Marx ’s Theory of Surplus Value, edited by Karl Kautsky , published in 1905–10, stands out where the theories of A. Smith, D. Ricardo and other representatives of political economy are analyzed. In 1909, the first edition of the “History of Economic Thought” by the French economists Charles Geide and Charles Rist was published. In this paper, the concepts of non-orthodox areas were analyzed, for example, sensimonists , utopians , Fabians , anarchists (including the views of M. A. Bakunin and P. A. Kropotkin ). The most important work on the history of the mercantilist theory and preserving scientific significance to this day is the two-volume work of 1934 by Swedish economist Eli Heckscher “Mercantilism”. Also, a detailed analysis of mercantilism is given in the “General Theory of Employment, Interest and Money” by J. M. Keynes . ^[9]

In the second half of the 20th century, a large number of studies on the history of economic doctrines were published, among the authors of which were such prominent economists as J. Schumpeter, M. Blaug , R. Heilbroner , J. Stigler , W. K. Mitchell , J. K. Galbraith and many others. ^[9]

• History of Macroeconomic Studies

• Galbraith JK Economics in Perspective: A Critical History. - Boston: Houghton Mifflin, 1988. - 324 p. - ISBN 978-0395483466 .
• W. Mitchell. Types of Economic Theory: From Mercantilism to Institutionalism. - Augustus M Kelley Pubs, 1969. - ISBN 978-0678002346 .
• H. Spiegel, A. Hubbard. The Growth of Economic Thought. - 3 Sub edition. - Duke University Press, 1991. - 896 p. - ISBN 978-0822309734 .
• G. Stigler. Essays in the history of economics. - University of Chicago Press, 1965. - 391 p.
• Blaug M. Economic thought in retrospect . - M .: Delo, 1996. - 687 p. - ISBN 5-86461-151-4 .
• Nazar S. Path to the great goal. The history of one economic idea. - M .: AST CORPUS, 2013
• Robbins L. The History of Economic Thought: Lectures at the London School of Economics / Per. from English - M .: Publishing house of the Institute Gaidar , 2013.
• Philosophers of this world = The Worldly Philosophers. - M .: Kolibri , 2008. - 432 p. - ISBN 978-5-389-00073-5 .
• Schumpeter J. History of economic analysis . - School of Economics, St. Petersburg University of Economics and Finance , Higher School of Economics , 2004. - ISBN 5-900428-60-5 , 5-900428-64-8, 0-415-10888-8.
• B. Seligman. The main trends of modern economic thought . - M .: Progress , 1968. - 600 p. (Eng. Main Currents of Modern Economics: Economic Thought Since 1870 , 1962).
• Economic Theory / Ed. E. N. Lobacheva. - 2nd ed. - M .: Higher education, 2009. - 515 p. - ISBN 978-5-9692-0406-5 .

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