Classic political economy

The founder of the direction is A. Smith , his closest followers (“Smiths”) - Dr. J. Anderson , Earl of Lauderdale , T. Malthus , T. Tuk , Colonel Robert Torrens , Sir Edward West and Jane Mars . Smith outlined a logical system that explained the work of the free market on the basis of internal economic mechanisms, and not external political control.

A new stage in the development of the classical school marks the figure of D. Ricardo with his development of the concept of value, original theories of land rent and international trade. Among the direct followers of D. Ricardo were the English economists J. Mill , J. R. McCulloch and T. de Quincey ; In addition, the “Ricardians” include N.W. Senior and G. Martino .

The labor theory of value led to the emergence of a group of economists who advocated a class that earned money through labor. These scientists are known in history as the Ricardian Socialists. Among them are Thomas Godskin (1787–1869), William Thompson (1775–1833), Charles Hall (1745–1825), John Gray (1799–1883), and John Francis Bray (1809–1895).

The economists who supported the classical school in continental Europe (Continental Classicals) were Frenchman J.-B. Say , Swiss J. Simon de Sismondi and German economist F. von Germann .

The final stage of the evolution of the school is represented by the works of JS Mill , in whose works the principles of the classical school in economic theory were finally embodied.

In classical economic theory, the economy has the ability to self-regulate and fully utilize its resources, and any production is organized in order to increase consumption .

Until the founding of the foundations of the classical school in economics, society was dominated by the view that government intervention in the economy was necessary. It was believed that this is the only way to form the wealth and welfare of the state. However, from the end of the 17th to the beginning of the 18th century , ideas of non-interference of the state into the economic life of society, that is, economic liberalism, were formed.

It was at this time that a new theoretical school of economic thought was born. Later it will receive the name of classical political economy.

Representatives of the classical school re-formulated the subject and method of studying economic theory. The growth of manufacturing (and then industrialization) highlighted industrial production , which shifted trade and loan capital. Hence, as a subject of study, the sphere of production moved to the first place.

In ancient Greece, the term "oikony" meant "household". In the era of mercantilists, economics began to be understood as the science of state economy ruled by the monarch. Finally, economics acquired the features of a scientific discipline at the end of the 17th - first third of the 19th century.

It is believed that classical political economy originated in the late XVII - early XVIII centuries. in the works of W. Petty (England) and P. Boisguillebert (France) ^[1] .

The time of its completion is considered from two theoretical and methodological positions. Thus, the Marxist position establishes the period of completion of the development of the first quarter of the 19th century, and English scholars A. Smith and D. Ricardo are considered the finalizers of the school. According to another — the most common in the scientific world — the “classics” exhausted themselves in the last third of the 19th century. the writings of JS Mill ^[1] .

• First stage. The first period of this stage (the middle of the XVII - the beginning of the XVIII century) is characterized by the expansion of market relations. The theory of mercantilism is being debunked. The main representatives of this direction are U. Petty and P. Boisguillebert ^[2] .

The second period of this stage falls on the middle of the XVIII century, characterized by the emergence of such a direction as physiocracy . Among the representatives of this direction can be distinguished F. Kene , A. Turgot and others.

Physiocrats significantly advanced economics, identified a new interpretation of a number of micro and macroeconomic categories. But their attention was focused on the problems of agricultural production to the detriment of other sectors of the economy and especially the sphere of circulation ^[2] .

• The second stage is completely connected with the name of Adam Smith. Among his works can be identified the monumental work " Study on the nature and causes of the wealth of nations " ( 1776 ). The basis of his theory is that the economic laws are firm and objective, regardless of the will and consciousness of man. The laws discovered by Smith — the division of labor and the growth of labor productivity — are classic. His interpretations of the product and its properties, money, wages, profits, capital, productive labor, etc. are the basis of modern economic concepts ^[3] .

• The third stage is the entire first half of the XIX century. In historical terms, correlated with the completion of the industrial revolution in developed countries. During this period, the ideas of A. Smith were deepened and supplemented by a whole group of his followers, among them: D. Ricardo, T. Malthus , N. U. Senior , J. B. Say , F. Bastia and others. ^[4]

• The fourth stage is the second half of the XIX century. This stage can be called the final. This is a period of generalization of the best achievements of the classical school. The most prominent representatives of this stage are JS Mill and K. Marx . During this period, the formation of " neoclassical economic theory " began ^[5] .

The most famous and prominent representatives of classical political economy were the Scottish scholar Adam Smith (1723–1790) and the Englishman David Ricardo (1772–1823). A. Smith headed the Department of Moral Philosophy at the University of Glasgow, then worked as chief customs commissioner of Scotland. He was the author of many works on economics and philosophy. But his main world-famous work was "A Study on the Nature and Causes of the Wealth of Nations" (1776). In this work, A. Smith gives a comprehensive description of the economic system of society, considers the theory of value, the theory of income distribution, the theory of capital and its accumulation, the economic policy of the state, public finances, gives a detailed criticism of mercantilism. He succeeded in his book to combine most of the existing areas of economic research.

The basis of all economic phenomena considered by A. Smith is the labor theory of value. The cost of goods is created by labor, regardless of the industry. The labor concluded in the goods is the basis for exchange. The price of a commodity is determined by the labor costs of its production, as well as by the ratio of the supply and demand of the commodity.

A. Smith gave a detailed analysis of the main incomes of the society - profits, wages and land rent - and determined the value of the social product as the sum of the incomes of society. The social product embodies the wealth of the country. The growth of wealth depends on the growth of labor productivity and on the proportion of the population engaged in productive labor. In turn, labor productivity largely depends on the division of labor and its specialization.

When considering the economic phenomena and processes of the “classics” of political economy, they adhered to a certain system of common prerequisites. The main ones were the concept of "economic man" and economic liberalism (economic freedom). They considered a person only from the point of view of economic activity, where there is a single stimulus of behavior - the desire for personal gain.

The idea of ​​economic liberalism was based on the idea that economic laws act like the laws of nature. As a result of their actions in society, “natural harmony” is spontaneously established. The state does not need to intervene in the operation of economic laws. The principle of economic liberalism and free trade is expressed by the famous slogan “ laissez-faire , laissez-passer” (an approximate translation into Russian: “Let people do their own business, let things go their own way”). In other words, this is the principle of non-interference of the state in economic activity. The expression has become a symbol of classical economic theory. In foreign trade, economic liberalism means free trade , without restrictions on exports and imports. Such foreign policy was called free trading (from the English free trade - free trade).

In accordance with classical political economy, economic laws and competition act as an “ invisible hand ”. As a result, resources are redistributed for efficient (full) use, prices for goods and resources are changing rapidly, an equilibrium between supply and demand is established .

Completion of the era of the "classics" of political economy does not mean the completion of political economy as a science. On the contrary, as in other sciences, the “classical stage” is only a “high start” of the life cycle of science, opening the next, equally saturated pages of its history.

• Anikin A.V. The Formation of the Classical School // Youth of Science: Life and Ideas of Economists before Marx. - 2nd ed. - M .: Politizdat , 1975. - p. 125-134. - 384 s. - 50 000 copies
• Medvedev V. A. , Abalkin L. I. , Ozherelyev O. I. Political Economy. Textbook for universities. M .: Politizdat, 1998.
• Yadgarov Ya. S. History of Economic Thought . M .: Infra-M, 2004. ISBN 5-16-001940-5