1. In classical political economy, the priority method of economic analysis is:
A) empirical method;
B) functional method;
B) causal method.
2. The subject of studying classical political economy is:
A) sphere of circulation;
B) the sphere of production;
C) the sphere of circulation and the sphere of production at the same time.
3.According to classical political economy, wages as a worker’s income tend to:
A) to a physiological minimum;
B) to the subsistence level;
B) to the highest possible level.
4.In accordance with classical political economy, money is:
A) artificial invention of people;
B) the most important factor in economic growth;
C) a technical tool, a thing that facilitates exchange.
5.The founder of the class method of analysis, theories of capital, productive labor, and reproduction is:
A) F. Quesnay;
B) A. Smith;
B) K. Marx.
6.What was the basis of the physiocratic system?
A) the primacy of agriculture as the basis of social life;
B) analysis of social reproduction and its categories;
C) the primacy of the sphere of circulation.
A) nominalistic theory of money;
B) metal theory of money;
B) quantity theory of money.
8. In what era did the position of the “INVISIBLE HAND” arise?
A) an unregulated market economy;
B) before the market economy;
B) a regulated market economy.
A) F. Quesnay, A. Turgot, A. Smith;
B) A. Serra, W. Stafford;
B) T. Men, A. Montchretien;
D) I. Pososhkov.
10.U. Petty and P. Boisguillebert are the founders of the theory of value, defined by:
A) labor costs (labor theory);
B) production costs (cost theory);
B) marginal utility.
11.According to the classification proposed by F. Quesnay, farmers represent:
A) productive class;
B) class of land owners;
B) sterile class.
12.According to the teaching of F. Quesnay about the “pure product”, the latter is created:
A) in trade;
B) in agricultural production;
B) in industry.
A) A. Turgot;
B) A. Smith;
B) F. Quesnay.
14.What was the original name (at the beginning of the 17th century) of economic theory?
A) economics;
B) the science of wealth;
B) political economy;
D) history of economic doctrines.
A) A. Smith; a) “The Book of Poverty and Wealth”
B) W. Petty; b) “An Inquiry into the Nature and Causes of the Wealth of Nations”
B) I. Pososhkov; c) “Labor is the father of wealth, land is its mother.”
16. Turgot considers labor to be the only source of all wealth:
A) merchant;
B) agriculturist (farmer);
B) artisan;
D) moneylender;
E) peasant community.
17. According to A. Smith, a much greater value to actual wealth and income is added by capital invested:
A) into trade;
B) in agriculture;
B) in industry.
18.According to the methodological position of A. Smith, private interest:
A) inseparable from the general interest;
B) stands above the public;
C) secondary to the public.
19.A. Smith showed that the main incentive for human economic activity is:
A) high rates of development;
B) private interest;
C) advanced technical equipment of production.
20.A. Smith emphasized that the natural price is equalized by the market price due to
A) use value and total utility;
B) exchange value;
B) fluctuations in supply and demand;
D) constant cost of labor, fixed costs;
D) the fact that labor is valuable;
E) three-factor composition;
G) the relationship between the quantities of labor in production.
21. F. Quesnay classified all people involved in agricultural production as:
A) owners;
B) hired workers;
B) infertile;
D) productive.
Classical political economy arose in England in the 17th century. It is called classical primarily for the truly scientific nature of many of its theories and methodological provisions, which underlie modern economic science. Its founder is William Petty. The subject of studying political economy, in his opinion, is the analysis of problems in the sphere of production, because the creation and increase of wealth occurs exclusively in the branches of material production.
Petty identifies four factors of production: land and labor are the main ones, the qualifications of the worker and the means of his labor are not the main ones. Thus, he considered two measures of value - labor and land.
The labor theory of value occupies an important place in his works. He distinguished between market and natural prices. Natural price, or value, is determined by the labor expended on the production of a commodity. The market or political price changes depending on the relationship between supply and demand.
Based on the labor theory of value, Petty viewed rent as the difference between the cost of a commodity and the wages needed to support the worker's life.
Petty took a significant step forward on the issue of land prices. In his opinion, it should represent capitalized rent, i.e. the amount of annual annuities for a certain number of years.
What W. Petty expressed in the form of conjectures, Adam Smith (1723-1790) substantiated as a system, a detailed concept set out in the scientist’s famous work “An Inquiry into the Nature and Causes of the Wealth of Nations.” In it, he highlights the subject of study of economic science - the economic development of society and the improvement of its well-being.
When explaining economic phenomena, A. Smith proceeds from the assumption of the immutability of human nature. The basis of all economic processes is selfishness. The common good results from the actions of individual individuals, each of whom strives for his own benefit. Economic relations between people are formed spontaneously. His teachings showed for the first time the enormous role of the free market as a regulator of production. It was from him that the popular expression “the invisible hand of the market” came from. Without completely rejecting the participation of the state in economic life and control by the state, Smith assigns it the role of a “night watchman”, and not a regulator and regulator of economic processes.
Smith considers production to be the source of wealth; the condition for the growth of wealth is an increase in labor productivity, which is explained by the division of labor. The division of labor itself is determined by the natural inclination of people to exchange, and the depth of the division of labor is related to the volume of the market. He distinguishes two components in a product: exchange value and use value. In this case, labor acts as a source and measure of value. Smith identifies three main types of income: wages, profits and rent.
He introduced the categories of gross and net income for the first time. Gross income is a total social product, including all material costs, including those re-accounted for in sequential processing at different stages of the technological process. Net income is only newly created value.
In addition, Smith made a significant contribution to the theory of value, the doctrine of income, capital, the origin of money, and the economic policy of the state.
The most prominent economist of the era of the industrial revolution in England was David Ricardo (1772 - 1823). He builds his concept on the labor theory of value. He considers utility as a necessary prerequisite for value, that is, what does not have utility cannot have exchange value.
Ricardo derives the law of monetary circulation: when the quantity of goods and their prices remain constant, the amount of money needed for circulation depends on the value of money. Thus, he comes to the quantitative theory of money, to the derivation of the value of money from its quantity.
Ricardo considered the main problem of political economy to be the problem of distribution. The source of all income is labor. The size and ratio of incomes of individual classes are determined not by their contribution to the creation of wealth, but by completely different factors. Ricardo's wage theory boils down to the proposition that wages are regulated by the cost of the workers' minimum means of subsistence and cannot rise above this level for a long period of time. Considering the relationship between profit levels and workers' earnings, Ricardo came to the conclusion that an increase in nominal wages leads to a decrease in profits.
The theory of land rent occupies a special place in his works. According to Ricardo, nature does not participate in the creation of rent and does not determine the price level. There cannot be different prices for the same products on the market. The price of grain grown in areas favorable for farming is set at a level corresponding to the cost of the worst lands. As a result, producers who are in the best conditions, that is, who have the best land, receive additional income - land rent.
Ricardo made a certain contribution to the theory of foreign trade, and above all the principle of comparative advantage. According to his teaching, all countries benefit from international exchange, therefore each country gets the opportunity to save the costs of its labor by specializing in the production of those goods that are more profitable to produce in a given country, but not in comparison with other countries, but in comparison with the production of other goods in a given country. country.
French economist Jean Baptiste Say (1767-1832) entered the history of economic thought as the author of the theory of utility. He put forward a new assumption that utility is created in production, and utility determines the value of a thing. Labor is not the only source of wealth. Three independent factors participate in the creation of utility: labor, capital, land, with the activity of which all production is connected. Say assigned to each factor a part of the total social product: to labor - wages, to capital - profit, to land - rent.
Say's theory of markets has become widespread. He came to the conclusion that since every seller is also a buyer, a general sales crisis is impossible, only private imbalances are possible; everyone is interested in the well-being of everyone, the prosperity of one production is favorable for all other productions; those segments of the population that only consume without producing anything do not contribute to the wealth of the country, but ruin it.
The last thesis is refuted by another follower of A. Smith - Thomas Robert Malthus (1766 - 1834), who became widely famous for his essay “An Essay on the Law of Population”. He proclaimed that the main and permanent cause of poverty was not bad government or the unequal distribution of wealth, but the disproportion between the limited resources of nature and the claims of an increasing population. In this regard, T. Malthus considered “lack of space and food” to be one of the main reasons for wars. The population, according to his calculations, doubles every 25 years, increasing in geometric progression, and the means of subsistence under the most favorable conditions cannot increase faster than in arithmetic progression. It follows that helping the needy poor does not make sense, since this will lead to an even greater demographic “explosion”.
Representatives of the classical school outlined the range of fundamental problems, formulated the main tasks facing economic science, and created research tools, without which its further development would be impossible.
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Introduction
1. General characteristics of classical political economy
2. The main representatives of classical political economy
2.1 "Political Arithmetic" by William. Petty
2.4 Treatise of Political Economy by Jean Baptiste Say
Conclusion
Bibliography
classic political economy petty smith
Introduction
The topic of my test work does not seem relevant today. Some economists consider it unnecessary to turn to the theories and views of the past, because these theories and views have become “overgrown with shells” and have lost their significance, and therefore one should not waste time getting to know them.
Those who hold such a purely negative opinion are relatively few. The vast majority of specialists do not share it.
The purpose of my work is to characterize one of the trends in the history of economic doctrines, namely classical political economy: the general features that characterize this trend, its most famous representatives and their contribution to economic science.
The “classics” presented the processes occurring in the economy in a holistic, most enriched form as a sphere of interconnected laws and categories, as a logically coherent system of relations.
The classical school laid a strong foundation for economic theory, which opened the way to further improvement, deepening and development.
By studying the evolution of economic concepts, we strive to understand how the process of forming and enriching our knowledge about economics unfolds, how and why many ideas of the past remain relevant today, and how they influence our modern ideas.
1. General characteristics of classical political economy
1.1 Definition of classical political economy
The classical school of political economy is one of the mature trends in economic thought that has left a deep mark in the history of economic teachings. The economic ideas of the classical school have not lost their significance to this day. The classical movement originated in the 17th century and flourished in the 18th and early 19th centuries. The greatest merit of the classics is that they placed labor as a creative force and value as the embodiment of value at the center of economics and economic research, thereby laying the foundation for the labor theory of value. The classical school became the herald of the ideas of economic freedom and the liberal direction in economics. Representatives of the classical school developed a scientific understanding of surplus value, profit, taxes and land rent. In fact, economic science was born in the depths of the classical school.
Classical political economy arose when entrepreneurial activity, following the sphere of trade, money circulation and lending operations, also spread to many industries and the sphere of production as a whole. Therefore, already in the manufacturing period, which brought capital employed in the sphere of production to the forefront in the economy, the protectionism of the mercantilists gave way to its dominant position to a new concept - the concept of economic liberalism, based on the principles of non-interference of the state in economic processes, unlimited freedom of competition for entrepreneurs.
For the first time, the term “classical political economy” was used by one of its finalists, K. Marx, in order to show its specific place in “bourgeois political economy.” And the specificity, according to Marx, is that from W. Petty to D. Ricardo in England and from P. Boisguillebert to S. Sismondi in France, classical political economy “studied the actual relations of production of bourgeois society.”
As a result of the disintegration of mercantilism and the strengthening of the growing tendency to limit direct state control over economic activity, “pre-industrial conditions” lost their former significance and “free private enterprise” prevailed. The latter, according to P. Samuelson, led “to conditions of complete laissez faire (i.e., absolute non-interference of the state in business life), events began to take a different turn,” and only “... from the end of the 19th century. in almost all countries there was a steady expansion of the economic functions of the state.”
In fact, the principle of “complete laissez faire” became the main motto of a new direction of economic thought - classical political economy, and its representatives debunked mercantilism and the protectionist policies in the economy it promoted, putting forward an alternative concept of economic liberalism.
In modern foreign economic literature, while paying tribute to the achievements of classical political economy, they do not idealize them. At the same time, in the economic education system of most countries of the world, the identification of the “classical school” as the corresponding section of the course on the history of economic doctrines is carried out primarily from the point of view of the general characteristic features and characteristics inherent in the works of its authors:
Emphasis on the analysis of problems of production and distribution of material goods;
Development and application of progressive methodological research techniques;
The core of the economic analysis of the classics is the problem of value;
All the classics interpreted value as a quantity determined by production costs;
The perception of the economic system as a system similar to the objects of study in physics of that time (more precisely, mechanics). This, in turn, led to the following features of the economic analysis of the classical school: the conviction that universal and objective (economic) laws dominate in a market (capitalist) economy; and ignoring the subjective psychological factors of economic life.
Underestimation of the role of money and the influence of the sphere of circulation on the sphere of production.
Money was perceived by the classics as a technical means that helped facilitate exchange. The classics ignored the role of money as the most liquid means of storing value. The finisher of classical political economy, J. S. Mill, wrote: “In short, it is scarcely possible to find in social economy a thing of more insignificant importance than money, unless it touches on the way in which time and labor are saved”;
Great emphasis on studying the “laws of motion”, i.e. patterns of trends, dynamics, capitalist economy.
Negative attitude (with rare exceptions such as J. S. Mill) towards active government intervention in the economy. The classics, following the physiocrats, advocated the ideology of laissez-faire.
1.2 Stages of development of classical political economy
According to generally accepted estimates, classical political economy originated in the late 17th and early 18th centuries. in the works of W. Petty (England) and P. Boisguillebert (France). The time of its completion is considered from two theoretical and methodological positions. One of them, Marxist, points to the period of the first quarter of the 19th century, and the English scientists A. Smith and D. Ricardo are considered to be the finalists of the school. According to the most widespread theory in the scientific world, the classics exhausted themselves in the last third of the 19th century. by the works of J. S. Mill. In the development of classical political economy, with a certain convention, four stages can be distinguished.
Firststage covers the period from the end of the 17th century. until the beginning of the second half of the 18th century. This is a stage of significant expansion of the sphere of market relations, reasoned refutations of the ideas of mercantilism and its complete debunking. The first representative and progenitor of the classical school should be considered the English economist W. Petty, whom Marx called “the father of political economy and, in some way, the inventor of statistics.”
Secondstage The development of classical political economy covers the period of the last third of the 18th century. and is associated with the name and works of A. Smith. His influence affected more than one school.
Thirdstage The evolution of the classical school dates back to the first half of the 19th century, when the industrial revolution ended in a number of developed countries. During this period, Smith's followers subjected to in-depth study and rethinking the basic ideas and concepts of their idol, enriching the school with fundamentally new and significant theoretical positions. Representatives of this stage include J.B. Say, the Englishmen D., Ricardo, T. Malthus and N. Senior, and others. Each of them left a fairly noticeable mark in the history of economic thought and the formation of market relations.
Fourth The final stage of development of classical political economy covers the period of the second half of the 19th century, during which J. S. Mill and K. Marx summarized the best achievements of the school. On the other hand, by this time new, more progressive trends in economic thought, which later received the names “marginalism” (late 19th century) and “institutionalism” (early 20th century), were already acquiring independent significance.
2. The main representatives of classical political economy
2.1 "Political Arithmetic" by William Petty
The formation of the classical school was started by William Petty (1623-1687). He is called the founder of statistics, a man who expressed many interesting thoughts and conclusions in fragments, opening the way to the creation of economic theory, economic science.
Petty was not interested in the external manifestation, but in the essence of economic processes; he tried to “explain the mysterious nature” of taxes and their consequences, money rent, land rent, money, the origins of wealth. In his opinion, the subject of the study of political economy is, first of all, the analysis of problems in the sphere of production; he believed that the creation and increase of wealth occurs exclusively in the sphere of material production.
In his Treatise on Taxes and Duties, Petty concludes that “there is a certain measure or proportion of money necessary for the carrying on of the trade of the country.” Excess or lack of money against this measure will harm it. A decrease in the metallic content of money cannot be a source of wealth.
In his works, he examined what factors are involved in the production of products and the creation of wealth. Petty identifies four factors. The first two - land and labor - are basic. He believes that “the assessment of all objects should be reduced to two natural denominators: land and labor, i.e. we should say: the value of a ship or a frock coat is equal to the value of such and such an amount of labor, because both - the ship and the frock coat - were produced by land and human labor.”
The other two factors involved in creating a product are not the main ones. These are the qualifications, skill of the worker and the means of his labor - tools, supplies and materials. They make work productive. But both of these factors cannot exist independently, i.e. without labor and land.
Thus, Petty considered two measures of value - labor and land. In practice, he proceeded from the fact that in any type of labor there is something in common that allows all types of labor to be compared with each other.
W. Petty believed that wealth is created primarily by labor and its results.
Petty expressed a number of theses that contain the starting points of the theory of value. Money has value. The amount of money that can be received for a product determines its value. They are determined not directly through labor costs, but indirectly through the costs of producing money (silver and gold) offered for these products. It is not all labor that creates value, but that which is spent on the production of silver.
The income of entrepreneurs and landowners was characterized by W. Petty through the essentially unified concept of “rent”. In particular, by calling land rent the difference between the cost of bread and the costs of its production, he substituted it for such a concept as farmer’s profit.
A hundred years before A. Smith, W. Petty anticipated and put forward many ideas, which were later clarified, brought into logical order, and freed from some contradictions and inconsistencies by A. Smith.
2.2 Adam Smith: "An Inquiry into the Nature and Causes of the Wealth of Nations"
Adam Smith is called the founder of the classical school. It was A. Smith (1723-1790), professor and taxonomist, armchair scientist and encyclopedic educated researcher, who developed and presented the economic picture of society as a system.
A. Smith's work “The Wealth of Nations” is not a collection of recommendations, but a work that sets out a certain concept in a systematized form. It is full of examples, historical analogies, and references to economic practice.
Labortheorycost
What Petty expressed in the form of conjectures, Adam Smith substantiated as a system, an expanded concept. “The wealth of a people consists not in land alone, not in money alone, but in all things that are suitable to satisfy our needs and to increase our pleasures in life.”
Unlike the mercantilists and physiocrats, Smith argued that the source of wealth should not be sought in any specific occupation. Wealth is the product of the total labor of everyone - farmers, artisans, sailors, merchants, i.e. representatives of various types of work and professions. The source of wealth, the creator of all values, is labor.
According to Smith, the true creator of wealth is "the annual labor of every nation" directed to its annual consumption. In modern terminology, this is the gross national product (GNP).
He distinguishes between those types of labor that are embodied in material things and those that, like the labor of a domestic servant, are a service, and services “disappear at the very moment of their rendering.” If work is useful, this does not mean that it is productive.
All wealth is created by labor, but the products of labor are created not for oneself, but for exchange (“every person lives by exchange or becomes, to a certain extent, a merchant”). The meaning of a commodity society is that products are produced as goods for exchange. It is not simply that the exchange of goods for goods is equivalent to the labor expended. The result of the exchange is mutually beneficial.
ABOUTseparationlaborAndexchange
People are bound by the division of labor. It makes the exchange profitable for its participants, and the market, commodity society - effective. By buying someone else's labor, his buyer saves his own labor.
According to Smith, the division of labor plays the most important role in increasing the productive power of labor and the growth of national wealth. The deeper the division of labor, the more intense the exchange.
“Give me what I need and you will get what you need.” “It is in this way that we obtain from each other a much larger part of the services that we need” - these provisions of Smith are often quoted by commentators on his work.
"Invisiblehand"marketstrength
One of the leading ideas of The Wealth of Nations is about the “invisible hand”. A market economy is not controlled from a single center and is not subject to one general plan. Nevertheless, it functions according to certain rules and follows a certain order.
The paradox or essence of the market mechanism is that private interest and the desire for one’s own benefit benefits society and ensures the achievement of the common good. In a market economy (in a market mechanism), there is an “invisible hand” of market forces, market mechanisms, which presupposes minimal government intervention and market self-regulation based on free prices that develop depending on supply and demand under the influence of competition.
TwoapproachToeducationcost
Considering the problem of pricing and the essence of price, Smith put forward two propositions.
The first says: the price of a product is determined by the labor expended on it. This provision, in his opinion, is applicable in “primitive societies”. And Smith puts forward the second, according to which value, and therefore price, is made up of labor costs, profit, interest on capital, land rent, i.e. determined by production costs. The essence of these provisions is reflected in Figure 1: the first provision is in the form of a solid arrow with the inscription “Labor”, and the second is expressed using dotted arrows with the inscriptions “Capital” and “Land”.
Principleeconomicfreedom
Smith believed that the market must be protected from external interference. The freedom of economic activity of individuals should not be hindered, nor should it be strictly regulated. Smith opposes unnecessary restrictions on the part of the state; he is for free trade, including foreign trade, for the policy of free trade, and against protectionism.
Rolestates,principlestaxation
Without completely rejecting participation in economic life and control by the state, Smith assigns it the role of a “night watchman”, and not a regulator and controller of economic processes.
Smith identifies three functions that the state is called upon to perform: the administration of justice, the defense of the country, and the organization and maintenance of public institutions.
He also argues that the payment of taxes should not be imposed on one class, as proposed by the physiocrats, but on everyone equally - on labor, on capital and on land.
Smith justifies the principle of proportional division of the tax burden - according to the level of property wealth of taxpayers.
It is believed that Smith's three postulates (analysis of the “economic man”, the “invisible hand” of the market, wealth as an objective function and an object of economic relations) still determine the vector of economic science. They form Smith's paradigm.
2.3 David Ricardo: “Principles of Political Economy”
David Ricardo (1772-1823) sought to overcome the inconsistency of individual provisions, more clearly substantiate other provisions, and more fully develop third ones.
Ricardo actually continued the formation of the fundamental principles of the classical school of political economy and, together with Smith, is considered its founder.
Ricardo's main work is “Principles of Political Economy and Taxation” (1817). Ricardo showed that he, like A. Smith, is primarily interested in the inevitable economic “laws”, the knowledge of which will make it possible to control the distribution of income created in the sphere of material production.
Theorycost-positionRicardo
Rejecting Smith's dual assessment of this category, he categorically insists that only one factor, “labor,” underlies value. According to his formulation, “the value of a commodity, or the quantity of any other commodity for which it is exchanged, depends on the relative quantity of labor which is necessary for its production, and not on the greater or lesser remuneration which is paid for that labor.”
Theorymoney
D. Ricardo's positions on the theory of money were based on provisions characteristic of the form of the gold coin standard, according to which the amount of gold in the coin minted for circulation, specified by law, was subject to free and guaranteed exchange of paper money. Taking this into account, the author of “Principles” wrote that “neither gold nor any other commodity can always serve as a perfect measure of value for all things.” In addition, D. Ricardo was a supporter of the quantity theory of money, linking the change in their value as goods with their (money) quantity in circulation. He also believed that “money serves as the universal medium of exchange among all civilized countries and is distributed among them in proportions which vary with every improvement in commerce and machinery, with every increase in the difficulty of obtaining food and other necessaries of life for a growing population.” Finally, in his opinion, money as a commodity, when its value decreases, necessitates an increase in wages, which in turn “...is invariably accompanied by an increase in the price of goods.”
Theoryincome
D. Ricardo's theory of income significantly enriched classical political economy in terms of characterizing the essence of rent, profit and wages.
Ricardo believed that rent is the result not of the “generosity” of nature, but of its “poverty”, the lack of rich and fertile plots of land. The source of rent lies in the fact that land is the property of its owners. If air and water “could be turned into property” and were available in limited quantities, “then they, like land, would provide rent,”
Justifying the process of rent formation, Ricardo refers to the growing demand for agricultural products associated with an increase in population) and the process of involving more and more new lands in agricultural circulation.
Rent does not exist only in the transition from better land to worse. The prerequisites and conditions for its existence are differences in the quality, fertility, location of lands, and the degree of their cultivation. Rent can also occur in cases where land is occupied and requires increasing amounts of labor and capital. Rent is always paid for the use of land only because the quantity of land is not unlimited, and its quality is not the same.
Ricardo's theory of rent had practical significance. The provisions and conclusions substantiated by the English classic were directed against the establishment of high duties on bread.
Ricardo's theory of rent helps to understand his interpretation of the relationships and trends of basic incomes: wages, profits, rent.
At the beginning of his work, in the chapter “On Value,” Ricardo argued with Smith, who believed that an increase in wages leads to a change in the value and price of manufactured products. The value of a product, Ricardo said, does not depend on the amount of remuneration for labor, but on the amount of labor required to produce the product; it is determined by the amount of labor embodied in it.
Considering the relationship between the size of profit and workers' earnings, Ricardo comes to the conclusion that an increase in nominal wages leads to a decrease in profits, because wages and profits are antagonistic and are in inverse relation to each other. “Raising wages does not raise the prices of goods, but invariably lowers profits.” “Whatever increases wages necessarily decreases profits.”
According to Ricardo, the main trend characterizing the dynamics of income is as follows: with the development of society, real wages remain unchanged, rent grows, and the level of profit falls.
Theoryreproduction
Ricardo recognized “Say’s law of markets,” i.e., the dogma of a crisis-free and equilibrium state of the economy at full employment. In particular, as if in recognition of “Say’s law,” he wrote: “Products are always purchased for products or services; money serves only as the measure by which this exchange is accomplished. A commodity may be overproduced, and the market will be so crowded that even the capital spent on that commodity will not be recovered. But this cannot happen to all goods at the same time.”
Theory"comparativecosts"
Ricardo proposed the theory of “comparative costs” (comparative advantages), which became the theoretical basis for the policy of “free trade” (free trade) and in modern versions is used to justify and develop the so-called “open economy” policy.
The general meaning of this concept is that if the governments of different countries do not impose any restrictions on foreign trade with each other, the economy of each country begins to gradually specialize in the production of those goods that require less labor time to produce. Free trade allows countries to consume no less quantity of goods than before specialization, minimizing the labor time required to create a given volume of goods. As a follower of Smith and Malthus, Ricardo made a significant contribution to the development and clarification of various specific problems of economic theory.
2.4 Jean Baptiste Say: “Treatise on Political Economy”
J.B. Say (1767-1832) was the largest representative of the classical school in France, a merchant and entrepreneur, scientist and professor of industrial economics - known as a popularizer of the works of the founders of the classical school, the creator of his own, subjective concept of value (cost). The main work of Zh.B. Say - “A Treatise of Political Economy, or a Simple Statement of the Mode in which Wealth is Formed, Distributed, and Consumed” (1803).
His concepts - to a greater extent than the concepts of other classics - led to the conclusion of the stability and consistency of the capitalist economy, for which he received the most vehement criticism from representatives of many heretical trends in economic science - from Marxists to Keynesians.
Whatissourcevalues?
One of the starting points is Say’s position on the source of value (cost) of goods and services. Unlike A. Smith, who ultimately reduced the source of income to labor (according to the labor theory of value), Say puts the focus not on labor costs, but on utility: “utility imparts value to objects.”
According to Say's concept, the criterion of productivity is utility. Therefore, the labor of artisans and the labor of farmers, the labor of teachers and the labor of doctors should be considered productive.
It is not the material form of the product that is important, but the result of the activity. As a result of production activities, the service does not necessarily have to take the form of a tangible product.
Theoryproductionfactors
The theory of production factors is based on Say's position on the determining role of utility in the formation of the value of goods and the multiplication of wealth.
J. B. Say was the first of the classics to clearly and unambiguously formulate the idea that the value of a product is equal to the sum of wages, profit and rent, i.e. the amount of income of the owners of production factors used in the manufacture of a given product. At the same time, according to Zh.B. Say, each factor of production participates in the production process, providing its service, and therefore contributes to the creation of value of goods. The amount of such contribution is determined in the market for a particular product. The amount of wages characterizes the contribution of labor, the amount of interest - the contribution of capital, the amount of land rent - the contribution of land. He reduces entrepreneurial profit to the wages of highly skilled labor associated with the organization of production activities, that is, the effective combination of other factors of production. The French economist attached special importance to this type of labor - the work of an entrepreneur. It is entrepreneurs who provide the supply of finished goods and create demand for factors of production, thereby providing employment to the labor force. Wealth distribution is also carried out through them.
LawmarketsSeya
As part of his theory of sales markets, Say formulated a law that was later named after him. According to Say's theory of sales markets, “markets for products are created by production itself,” i.e. supply creates demand. These are two equivalent formulations of Say's law.
This law, in turn, leads to the following consequences:
General overproduction is impossible;
What is beneficial for an individual business entity is beneficial for the economy as a whole;
Imports are beneficial to the economy because they are paid for by its products;
Those forces of society that consume but do not produce ruin the economy.
Say's theory of sales markets led to the idea of internal stability and sustainability of the capitalist economy. Unemployment and declines in production should - on its basis - be interpreted as temporary phenomena that have no long-term significance. This view of the macroeconomic stability of a market economy was refuted only in the 1930s.
Conclusion
The classical school developed in the second half of the 18th - first half of the 19th century. Economists of the classical school, who replaced the mercantilists, made a significant contribution to the formation of the foundations of economic science.
The classical school made the sphere of production, not circulation, its main object of study; revealed the importance of labor as the basis and measure of the value of all goods, as a source of wealth for society; proved that the economy should be regulated by the market and has its own laws that are objective, i.e. cannot be abolished by kings or governments; identified sources of income for all segments of society.
New concepts, provisions, conclusions are to one degree or another based on the works and developments of predecessors, on the terminology developed by them, systematize and organize the previously accumulated theoretical wealth.
The classical school laid a strong foundation for economic theory, which opened the way to further improvement, deepening and development.
The classical school of political economy is one of the mature trends in economic thought that has left a deep mark in the history of economic teachings. The economic ideas of the classical school have not lost their significance to this day. The classical movement originated in the 17th century and flourished in the 18th and early 19th centuries. The greatest merit of the classics is that they placed labor as a creative force and value as the embodiment of value at the center of economics and economic research, thereby laying the foundation for the labor theory of value. The classical school became the herald of the ideas of economic freedom and the liberal direction in economics. Representatives of the classical school developed a scientific understanding of surplus value, profit, taxes, and land rent. In fact, economic science was born in the depths of the classical school.
Merits of the classical school:
1. She made the sphere of production, not circulation, the main object of study.
2. Revealed the importance of labor as the basis and measure of the value of all goods, as a source of society’s wealth.
3. She proved that the economy should be regulated by the market and has its own laws that are objective, i.e. cannot be abolished by either kings or governments.
4. Identified the sources of income of all layers of society: entrepreneurs, workers, landowners, bankers, traders.
Mainideasclassicalpoliticalsavingsare:
A person is considered only as an “economic man”, who has only one desire - the desire for his own benefit, to improve his situation. Morality, culture, customs, etc. are not taken into account.
All parties participating in an economic transaction are free and equal before the law, both in the sense of foresight and foresight.
Every economic actor is fully aware of prices, profits, wages and rents in any market, both now and in the future.
The market provides complete mobility of resources: labor and capital can instantly move to the right place.
The wage elasticity of the number of workers is not less than one. In other words, any increase in wages leads to an increase in the size of the labor force, and any decrease in wages leads to a decrease in the size of the labor force.
The sole goal of a capitalist is to maximize profit on capital.
In the labor market, there is absolute flexibility of monetary wages (its value is determined only by the relationship between supply and demand in the labor market).
The main factor in increasing wealth is capital accumulation. Competition must be perfect and the economy free from excessive government intervention. In this case, the “invisible hand” of the market will ensure the optimal allocation of resources.
Bibliography
1. Amosova V.V., Gukasyan G.M., Makhovikova G.A. Economic theory. St. Petersburg: Peter, 2002. 480.: ill. (Series “Textbooks for Universities”).
2. Bartenev S.A. History of Economic Thought. M.: Yurist, 2002.456 p.
3. Bartenev S.A., Economic theories and schools, M., 1996.
4. Blaug M. Economic thought in retrospect. M.: "Delo Ltd", 1994.
5. Voitov A.G. History of Economic Thought. Short course: Textbook. 2nd ed. M.: Publishing House "Dashkov and Co", 2001. 104 p.
6. Galbraith J.K. Economic theories and goals of society. M.: Progress, 1979.
7. Dadalko V.A. World Economy: Textbook. allowance. M.: “Urajay”, “Interpressservice”, 2001. 592 p.
8. Jean-Marie Albertini, Ahmed Silem. "Understand economic theories." A small directory of large currents, translation from French, M., 1996.
9. Zhid Sh., Rist Sh. History of economic teachings. M.: Economics, 1995.
10. Kondratyev N.D. Favorite op. M.: Economics, 1993.
12. Negeshi T. History of economic theory. M.: Aspect - press, 1995.
13. Yadgarov Y.S. History of Economic Thought. M., 2000.
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Conditions for the emergence and characteristics of classical political economy. Economic theory of W. Petty. Theory of wealth and money. Theory of value. Income theory. Economic views of P. Boisguillebert. Difference in views between W. Petty and P. Boisguillebert.
Introduction
Classical political economy is an economic movement of the late 18th – early 19th centuries, designed to solve the problems of free private enterprise.
Classical political economy gave economic theory a truly scientific character. Firstly, it discovered the real source of society's wealth - the production process. Secondly, political economy began to study economic activity as a system covering the production, distribution, exchange and consumption of services and goods. Thirdly, this science was not limited to describing phenomena (for example, the exchange of goods for money) and moved on to identifying their essence and laws of development.
Classical political economy replaced the era of mercantilism. The characteristic features of classical political economy are the following:
· Classical political economy is based on the doctrine of the labor theory of value.
· The main principle is “laissez faire” (“let things take their course”), that is, complete non-interference by the state in economic matters. In this case, the “invisible hand” of the market will ensure the optimal allocation of resources.
· The subject of study is mainly the sphere of production.
· The value of a product is determined by the costs spent on its production.
· A person is considered only as an “economic man” who strives for his own benefit, to improve his situation. Morality and cultural values are not taken into account.
· The wage elasticity of the number of workers is greater than one. This means that any increase in wages leads to an increase in the labor force, and any decrease in wages leads to a decrease in the labor force.
· The goal of a capitalist's entrepreneurial activity is to obtain maximum profit.
· The main factor in increasing wealth is capital accumulation.
· Economic growth is achieved through productive labor in the sphere of material production.
· Money is a tool that facilitates the process of exchange of goods.
In this course work the following range of issues will be considered:
Historical conditions of occurrence;
General characteristics of classical political economy;
Reasons for the emergence of classical political economy;
What stages does classical political economy cover?
Characteristics of the stages of classical political economy;
The founders and representatives of classical political economy and their economic views and teachings.
1. General characteristics of the classical direction
1.1. Historical conditions for the emergence of classical political economy
Economic science has a long and rich history. People have always been concerned about processes that directly or indirectly affect their level of well-being. Therefore, reflections on economic life accompanied them from the moment of its inception.
The historical conditions that prepared the way for the emergence of classical political economy (classical school) developed primarily in England. Here, faster than in other European countries, the process of initial capital accumulation was completed. The foundations of manufacturing production were laid, which received great development already in the 17th century.
As a result of the aggravation of social contradictions, a bourgeois revolution began in England in 1640, ending the feudal-absolutist system and accelerating the development of capitalist relations. As a result of this, together with the growth of manufacturing production and the expansion of foreign trade expansion, England was significantly ahead of other European countries in capitalist development.
In France, where the feudal system was preserved until the last third of the 18th century, capitalism made its way with great difficulty.
At the origins of classical political economy are William Petty (England) and Pierre Boisguilbert (France).
Adam Smith, David Ricardo and Thomas Robert Malthus (England), Jean Baptiste Sey, Francois Quesnay, Anne Robert Jacques Turgot (France) made a great contribution to the development of the classical school.
The process of development of the classical school was completed with the works of John Stuart Mill and Karl Marx.
1.2. Reasons for the emergence of classical political economy
During the formation of the foundations of market economic relations in Western Europe and America, it became increasingly obvious that government intervention in the economy is not the only means of creating state wealth and achieving consistency in the relationships of economic entities in the domestic and foreign markets.
Main works: “Treatise on Taxes and Duties” (1662), “The Word of the Wise” (1664), “Political Anatomy of Ireland” (1672), “Political Arithmetic” (1676), “Something about Money” (1682), etc. .
In all his works, a red thread runs through the rejection of the protectionist ideas of the mercantilists: wealth, in his opinion, is formed not only by precious metals and stones, including money, but also by the country’s lands, houses, ships, goods and even home furnishings; wealth is created primarily by labor and its results: “labor is the father and active principle of wealth, and land is its mother.” He denied the “special” role of money in economic life and specified that if any state resorts to damaging coins, then this characterizes its decline, the dishonorable position of the sovereign, and the loss of public trust in money; a ban on the export of money abroad is meaningless and impossible; this act of the state is tantamount to a ban on the import of imported goods into the country.
Among the many progressive ideas of W. Petty, the following are highlighted:
1) the first author of the labor theory of value, which became one of the main features of classical political economy as a whole, in which he tried to identify the nature of the origin of the value of goods, as well as the reasons influencing their level of value on the market. “The value of a commodity is created by the labor of extracting silver and is its “natural price,” and the value of goods, determined by equating them to the value of silver, is their “true market price.” Or: the value of a product is determined by the participation of labor and land in its creation, i.e. He bases the price of a product on a cost-based approach.
2) the author of a number of provisions on the income of workers, owners of money capital and landowners, which became the basis for further research by D. Ricardo and T. Malthus, following W. Petty, characterized wages as the price of a worker’s labor, representing the minimum means for his existence and his family . He characterized the income of entrepreneurs and landowners with the universal concept of “rent,” meaning by it the difference between the cost of bread and the costs of its production, i.e. replacing the concept of producer profit.
3) explored the problem of determining the price of land, which is determined by the location of the land and the market - “near populated areas, for which large areas are needed to feed the population, land not only brings higher rent, but also costs a larger amount of annual rent than land of exactly the same quality , but located in more remote areas." Author of the idea of the relationship between loan interest and annual land rent.
4) a supporter of the quantity theory of money, demonstrated an understanding of the laws about the amount of money needed for circulation - “... money in itself does not constitute wealth.”
Considering the state of society and science of that time, naturally W. Petty did not avoid fundamental errors in his works: criticism of mercantilism is accompanied by tendentious considerations - he completely biasedly denies the participation of trade and commercial capital in the creation of national wealth (the opposite extreme), insists on reducing a significant part of merchants, whom he compares to “players engaged in the distribution of the blood and nutritious juices of the state” (agricultural products); The price of a product in each of the interpretations of its essence is based only on the cost approach, i.e. dead end; a number of concepts proposed by him are unreasonably simplified and distort their essence. Thus, the concept of “rent” unified by him is simplified to the extreme. This is a replacement for profit and loan interest by rent. Considering the essence of the origin of loan interest, he states that this indicator should be equal to “the rent from such and such an amount of land that can be purchased with the same money loaned under the condition of complete public safety.”
Thus, William Petty took a big step forward in the development of economic theory.
2.2. The emergence of the classical school in France. P. Boisguilbert and his “Accusation of France”. Economic doctrine of F. Quesnay
Pierre Boisguillebert (1646-1714) is considered the founder of the classical school in France.
The first reformist (anti-mercantilist) opinions were published anonymously in 1695-1696 in the book “A detailed description of the situation in France, the reasons for the decline in its welfare and simple methods of restoration, or how to deliver to the king all the money he needs in one month and enrich the entire population.” It is based on a critique of the economic policies of mercantilism by Jean Baptiste Colbert, Minister of Finance under Louis XIV.
In 1707 published a two-volume work, “The Accusation of France,” which was banned for its harsh criticism of the government. Having removed the harsh attacks, leaving not so much evidence as persuasion and incantations about the need for economic reforms, he republished the book three times. During his lifetime, he did not receive recognition for his ideas.
P. Boisguillebert's research focuses on the problems of agricultural development, in which he saw the basis of economic growth and wealth of the state. Under the influence of his ideas, physiocracy (power of nature, Greek) flourished in the economic thought of France for 100 years - a movement of classical political economy, whose representatives considered land and agricultural production to be decisive in the creation of national wealth.
The scientific merits of P. Boisguillebert: his works became the theoretical and methodological basis for the final debunking of mercantilism and the formation of specific traditions of the French classical school; Regardless of W. Petty, he came to the conclusion that the wealth of the country does not lie in the physical mass of money, but in the whole variety of useful goods and things; Analyzing the mechanism of the price relationship between goods on the market, taking into account the amount of labor expended and working time, he substantiated the labor theory of value, which, despite the costly method, was progressive for its time.
At the same time, P. Boisguillebert: deliberately absolutized the role of agriculture; underestimated the role of money as a commodity; denied the real significance in increasing the property wealth of industry and trade; the only one among all representatives of classical political economy who considered it possible and necessary to abolish money, which violates the exchange of goods at “true value”.
In classical political economy, two schools were formed - French (physiocrats) and English. The founder and head of the physiocrats in France was Francois Quesnay.
He develops this idea with the concept of the growth of the division of social labor, which has become the doctrine of technical progress as the main means of increasing the wealth of “any country at all times.”
3.2. Features of A. Smith's research methodology
The greatness of A. Smith as a scientist lies in his economic forecasts and fundamental theoretical and methodological positions, which for more than 100 years predetermined the direction of development of scientific economic thought and the economic policies of many states.
The central place in A. Smith's research methodology belongs to the concept of economic liberalism - non-interference of the state in business activities. The concept is based on the idea of natural order, i.e. market economic relations. “Market laws can best influence the economy when private interest is above public interest, i.e. “When the interests of society as a whole are considered as the sum of the interests of its constituent individuals.”
In development of this idea, Smith introduced the popular concepts of “economic man” and “invisible hand”.
The essence of the “economic man”: “dogs do not consciously exchange bones with each other” - “the division of labor is the result of a certain inclination of human nature towards trade and exchange” - “he (“the economic man”) is more likely to achieve his goal if he turns to their egoism (other people) and will be able to show them that it is in their own interests to do for them what he requires of them. Anyone who offers another a transaction of any kind is offering to do just that. Give me what I need, and you will get what you need - this is the meaning of any such proposal... It is not from the benevolence of the butcher, brewer or baker that we expect to receive our dinner, but from their observance of their own interests. We appeal not to their humanity, but to their selfishness, and we never tell them about our needs, but about their benefits.” “Economic man” by A. Smith is an egoist who strives for personal enrichment through the production and sale of a quality product or service.
The essence of the “invisible hand”: “each individual... has in mind his own benefit, and not at all the benefits of society... and in this case, as in many others, he is guided by an invisible hand towards a goal that was not included at all in his intention... by pursuing his own interests, he often serves the interests of society more effectually than when he deliberately seeks to do so.” The meaning of the “invisible hand” is to promote such social conditions and rules under which, thanks to the free competition of entrepreneurs and through their private interests, the market economy will best solve public problems and lead to harmony of personal and collective will with the greatest possible benefit for everyone.
Thus, the main thing in Smith's methodology is the “obvious and simple system of natural freedom,” which, thanks to the “invisible hand,” is always automatically balanced.
The state remains, as A. Smith writes, “three very important responsibilities”: 1) the costs of public works in order to “create and maintain certain public buildings and public institutions”, to provide remuneration for teachers, judges, officials, priests and others who serve interests of the “sovereign or state”; 2) costs of ensuring military security; 3) costs of administering justice, including the protection of property rights.
It was A. Smith who formulated the main task of science: “... the main task of the political economy of each country is to increase its wealth and power; therefore it should not give preference or special encouragement to foreign trade in articles of consumption rather than to domestic trade, or to transit trade rather than to both.”
3.3. Theoretical legacy of A. Smith
2) A new point in J. S. Mill’s research methodology is an attempt to identify differences in the concepts of “statics” and “dynamics”. He notes that all economists tend to strive to understand the laws of economics of a “stationary and unchanging society,” but now they should add “the dynamics of political economy to its statics.”
3) In the theory of labor productivity, J. S. Mill essentially agrees entirely with A. Smith - “only productive labor (i.e., the results of which are tangible) creates wealth - a material good.” The novelty is that he proposes to recognize labor according to acquisition of qualifications, protection of property, which allow increasing accumulation. As for the rest, “any income from unproductive labor is a simple redistribution of income created by productive labor.”
4) Essentially the salary of J.S. Mill relies on D. Ricardo and T. Malthus - this is payment for labor, which depends on supply and demand for labor; the minimum wage for workers is inevitable. This became the basis of his “working fund” doctrine, according to which class struggle and trade unions cannot prevent the formation of wages at the subsistence level. His idea is interesting that wages, other things being equal, are lower if labor is less attractive. In 1869, he recognized the potential for trade unions to influence wage growth.
5) In the theory of capital, J.S. Mill concludes that capital is “a previously accumulated stock of products of past labor.” Capital formation as the basis for investment makes it possible to expand employment and can prevent unemployment, if, however, one does not mean “unproductive expenses of the rich”
6) In the theory of rent, he has a common position with D. Ricardo - this is “compensation paid for the use of land.”
7) In the theory of income distribution, he is a supporter of T. Malthus. The theory of population is an axiom for him, especially since in England after the population census in 1821. For 40 years, livelihoods have not kept pace with population growth.
8) In the theory of value J.S. Mill repeats D. Ricardo - value is created by labor, it is the amount of labor that “is of paramount importance” in the event of a change in value.
9) The theory of money by J.S. Mill's theory is quantitative: a change in the quantity of money affects the relative change in the prices of goods. Other things being equal, the value of money itself “changes in inverse proportion to the quantity of money: every increase in quantity lowers its value, and every decrease increases it in exactly the same proportion.”
10) The first judgments and interpretations of socialism and the socialist structure of society among major representatives of political economy belong to J.S. Millu. His doctrine of social reform is based on the fact that “only the laws of production cannot be changed, and not the laws of distribution.” This reveals his lack of understanding that production and distribution are not separate spheres, but are comprehensively interpenetrating.
For all his goodwill towards “socialism,” J.S. Mill fundamentally dissociates himself from “socialism” in that social injustice is allegedly associated with private property rights as such. “It is only in the backward countries of the world that increasing production is the most important task—in the more developed countries an improvement in distribution is considered economically necessary.”
The main conclusion is that the solution to practical problems requires “the spread of the socialist worldview,” but “the general principle should be laisses faire, and every deviation from it, not dictated by considerations of some higher good, is clearly evil.” The state must intensify its participation in the socio-economic development of society and implement related reforms - by regulating bank interest, reducing large government expenditures, creating infrastructure, developing science, and developing progressive legislation.
To prevent the government from "moulding the opinions and feelings of the people from a young age," he recommends a private school system or compulsory home education up to a certain age instead of public education.
5.2. Economic teachings of Karl Marx
Conclusion
The classical school of political economy is one of the mature trends in economic thought that has left a deep mark in the history of economic teachings. The economic ideas of the classical school have not lost their significance to this day.
The classical movement originated in the 17th century and flourished in the 18th and early 19th centuries. The greatest merit of the classics is that they placed labor as a creative force and value as the embodiment of value at the center of economics and economic research, thereby laying the foundation for the labor theory of value. The classical school became the herald of the ideas of economic freedom and the liberal direction in economics. Representatives of the classical school developed a scientific understanding of surplus value, profit, taxes, and land rent. In fact, economic science was born in the depths of the classical school.
The characteristic features of classical political economy include the following:
1. Classical political economy is based on the doctrine of the labor theory of value.
2. The main principle is “laissez faire” (“let things take their course”), that is, complete non-interference by the state in economic matters. In this case, the “invisible hand” of the market will ensure the optimal allocation of resources.
3. The subject of study is mainly the sphere of production.
4. The value of a product is determined by the costs spent on its production.
5. A person is considered only as an “economic man” who strives for his own benefit, to improve his situation. Morality and cultural values are not taken into account.
6. The wage elasticity of the number of workers is greater than one. This means that any increase in wages leads to an increase in the labor force, and any decrease in wages leads to a decrease in the labor force.
7. The goal of a capitalist’s entrepreneurial activity is to obtain maximum profit.
8. The main factor in increasing wealth is capital accumulation.
9. Economic growth is achieved through productive labor in the sphere of material production.
10. Money is a tool that facilitates the process of exchange of goods.
So, in the course of work I found out the following.
The term “classical political economy” was first used by K. Marx. And the term “political economy” was first used by A. Montchretien in 1615.
The founders of classical political economy are W. Petty (England) and P. Boisguillebert (France).
Classical political economy includes 4 main stages.
In this course work, I examined the economic teachings of the main representatives of classical political economy, such as: W. Petty, P. Boisguillebert, F. Quesnay, A. Smith, D. Riccardo, J. B. Say, T. Malthus, J. S. Mill, K. Marx.
Agapova I.I. History of economic thought: Course of lectures. – M.: ed. “TANDEM”, 1998. – (electronic textbook).
Great Encyclopedia of Cyril and Methodius (BEKM) - a modern universal Russian encyclopedia (on 8 CDs) Pierre Boisguillebert (1646-1714), French economist, founder of classical bourgeois political economy in France, one of the founders of the labor theory of value .
Titova N.E. History of economic doctrines: Course of lectures - M.: Humanitarian Publishing Center VLADOS, 1997. - p. 36
The Great Encyclopedia of Cyril and Methodius (BEKM) is a modern universal Russian encyclopedia. Physiocrats (French physiocrates; from Greek physis - nature and kratos - strength, power, domination), representatives of the classical school of politics. savings 2nd half. 18th century in France. The physiocrats explored the sphere of production and laid the foundation for a scientific analysis of the reproduction and distribution of the social product. A “pure product” is created, according to physiocrats, only by agricultural labor. Bourgeois society was divided into classes. They opposed mercantilism; supporters of free trade.
The Great Encyclopedia of Cyril and Methodius (BEKM) is a modern universal Russian encyclopedia (on 8 CDs) Quesnay Francois (1694-1774), French economist. Founder of the Physiocratic school. Developed problems of social reproduction. The main work is “Economic Table” (1758).
Avtonomov V., Ananyin O., Manashev I. History of economic doctrines. – M.: INFRA-M, 2006. – 784 p. - (Higher education).
Gorodetsky V. History of economic doctrines: Course of lectures. – M. – (electronic textbook).
The Great Encyclopedia of Cyril and Methodius (BEKM) is a modern universal Russian encyclopedia (on 8 CDs) Adam Smith. From "An Inquiry into the Nature and Causes of the Wealth of Nations"
Barshenev S.A. History of economic doctrines: Textbook. – M.: Economist, 2004.
Great Encyclopedia of Cyril and Methodius (BEKM) - a modern universal Russian encyclopedia (on 8 CDs) David RICARDO (1772-1823), English economist, one of the largest representatives of classical political economy.
Jean Baptiste Say (1767–1832) – French economist. He entered the history of economic thought as the author of utility theory. Titova N.E. History of economic doctrines: Course of lectures - M.: Humanitarian Publishing Center VLADOS, 1997. - p. 58.
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Gorodetsky V. History of economic doctrines: Course of lectures. – M. – (electronic textbook).
Gorodetsky V. History of economic doctrines: Course of lectures. – M. – (electronic textbook).
Great Encyclopedia of Cyril and Methodius (BEKM) - a modern universal Russian encyclopedia (on 8 CDs) Karl Marx (1818-83), thinker and public figure, founder of Marxism.
Gorodetsky V. History of economic doctrines: Course of lectures. – M. – (electronic textbook).
Agapova I.I. History of economic thought: Course of lectures. – M.: ed. “TANDEM”, 1998. – (electronic textbook)
As the foundations of market economic relations continued to form in the developed countries of the world, it became increasingly obvious that government intervention in economic activity is not a panacea for overcoming obstacles in increasing national wealth and achieving consistency in the relationships of economic entities both domestically and internationally. foreign markets. Therefore, as P. Samuelson noted, the displacement of “pre-industrial conditions” by the system of “free private enterprise”, contributing to the disintegration of mercantilism, simultaneously became the starting point for the onset of conditions "complete laissez faire."
The last phrase means the requirement of complete non-interference of the state in the economy, business life, or, in other words, - economic liberalism. Moreover, from the end of the 17th - beginning of the 18th centuries. this idea has become a kind of motto for market liberal economic policy. And it was from this time that a new theoretical school of economic thought arose, which would later be called classical political economy.
The “Classical School” led a decisive struggle against the protectionist ideology of the mercantilists, turning to the latest methodological achievements of science of that era and developing truly fundamental theoretical research. Its representatives contrasted the empiricism of the mercantilist system with professionalism, which, according to the same P. Samuelson, did not allow “advisers to the king” to convince their monarchs that increasing the country’s wealth was associated with the establishment of state control over the economy, including curbing imports and encouraging exports and a thousand other “detailed orders”.
The “classics,” in contrast to the mercantilists, essentially re-formulated both the subject and the method of studying economic theory. Thus, the increased degree of manufacturing of the economy (and then its industrialization) led to the promotion of entrepreneurs engaged in industrial production to the fore, pushing capital involved in trade, money circulation and lending operations into the background. For this reason as a subject for studying "classics" They preferred mainly the sphere of production.
As for method of study and economic analysis, then its novelty in the “classical school” is associated, as already mentioned, with introduction of the latest methodological techniques, which provided fairly deep analytical results, a lesser degree of empiricalness and descriptive, i.e. superficial, understanding of economic (business) life. This is also evidenced by the statements of L. Mises and M. Blaug - the greatest authorities of our time in the field of methodology of economic science.
The first of them, in particular, believes that “many epigones of classical economists saw the task of economic science in the study not of actually occurring events, but only of those forces that in some, not entirely understandable way, predetermined the emergence of real phenomena.” According to the second, “classical economists emphasized that the conclusions of economic science are ultimately based on postulates drawn equally from the observed “laws of production” and subjective introspection (self-observation - Ya.Ya.).”
Thus, it can be argued that the replacement of mercantilism by classical political economy was the accomplishment of another historical metamorphosis in relation to the name and purpose of economic science. As is known, during the time of ancient Greek philosophers the term "saving" or "economy" was perceived as an almost literal translation of the words “oikos” (household) and “nomos” (rule, law) and had a semantic meaning processes of housekeeping, family or personal management. During the period of the mercantilist system, economic science, which thanks to D. Montchretien received the name “political economy,” was already perceived as the science of government or the economy of nation states ruled by monarchs. Finally, during the period of the “classical school,” political economy acquired the features of a truly scientific discipline that studies the problems of the economy of free competition.
By the way, K. Marx, whose name is associated with the introduction of the term “classical political economy” into scientific circulation, proceeded primarily from the fact that the “classics” in the works of their best, as he believed, authors A. Smith and D. Ricardo, were not at all allowed neither apologetics nor skimming the surface of economic phenomena. But, in his opinion, the “classical school,” with its characteristic class orientation, “studied the production relations of bourgeois society.” This position, it seems, was not disputed by N. Kondratiev, who believed that in the teachings of the “classics” it was about analyzing the conditions of free economic activity “only in the capitalist system.”
General features of classical political economy
Continuing the general description of the almost two-hundred-year history of classical political economy, it is necessary to highlight its common features, approaches and trends and give them an appropriate assessment. They can be reduced to the following generalization.
Firstly, the rejection of protectionism in the economic policy of the state and the predominant analysis of problems in the sphere of production in isolation from the sphere of circulation, the development and application of progressive methodological research techniques, including cause-and-effect (causal), deductive and inductive, logical abstraction. In particular, reference to observable “laws of production” removed any doubt that predictions obtained by logical abstraction and deduction should be subjected to experimental verification. As a result, the opposition of the spheres of production and circulation, characteristic of the classics, became the reason for underestimating the natural relationship of economic entities in these spheres, the reverse influence on the sphere of production of monetary, credit and financial factors and other elements of the sphere of circulation.
Moreover, the classics when solving practical problems answers to the main questions were given by posing these questions, as N. Kondratiev put it, "estimated". For this reason, he believes, “answers were obtained that have the nature of evaluative maxims or rules, namely: a system based on freedom of economic activity is the most perfect, free trade is most conducive to the prosperity of the nation, etc.” This circumstance is also did not contribute to the objectivity and consistency of economic analysis and theoretical generalization"classical school" of political economy.
Secondly, relying on causal analysis, calculations of average and total values of economic indicators, the classics (unlike mercantilists) tried to identify the mechanism of formation of the cost of goods and fluctuations in the price level on the market not in connection with the “natural nature” of money and its quantity in the country , but in connection with production costs or, according to another interpretation, the amount of labor expended. Undoubtedly, since the times of classical political economy in the past there has been no other economic problem, and N. Kondratiev also pointed out this, which would attract “such close attention of economists, the discussion of which would cause so much mental tension, logical tricks and polemical passions, as the problem of value . And at the same time, it seems difficult to identify another problem, the main directions in the solution of which would remain as irreconcilable as in the case of the problem of value” 5 .
However cost principle of determining the price level the “classical school” was not linked to another important aspect of market economic relations - the consumption of a product (service) with a changing need for a particular good with the addition of a unit of this good. Therefore, the opinion of N. Kondratiev, who wrote: “The previous excursion convinces us that until the second half of the 19th century in social economy there was no conscious and distinct division and distinction between theoretical and practical judgments of value, is quite fair. As a rule, the authors are convinced that those judgments which are factual judgments of value are as scientific and valid as those which are theoretical judgments.”6 A few decades later (1962), Ludwig von Mises made a largely similar judgment. “Public opinion,” he writes, “is still impressed by the scientific attempt of the representatives of classical economics to cope with the problem of value. Not being able to resolve the obvious paradox of pricing, the classics could not trace the sequence of market transactions down to the final consumer, but were forced to begin their constructions with the actions of a businessman for whom consumer assessments of utility are given” (emphasis mine. - Ya.Ya.).
Thirdly, the category “cost” was recognized by the authors of the classical school as the only initial category of economic analysis, from which, as in a family tree diagram, other inherently derivative categories bud off (grow). Analyzing the problem of value, the classics, according to N. Kondratiev, showed that “this problem includes a number of, although related, but deeply different issues. The main ones are the following: 1. What is value as a phenomenon and what are its types (qualitative problem)? 2. What are the grounds, sources or reasons for the existence of value? 3. Is value a quantity and, if so, what kind, and how is its magnitude determined (quantitative problem)? 4. What is the measure of value? 5. What function does the category of value perform in the system of theoretical economy? In addition, this kind of simplification of analysis and systematization led the classical school to the fact that economic research itself seemed to imitate mechanical adherence to the laws of physics, i.e. searching for purely internal reasons for economic well-being in society without taking into account psychological, moral, legal and other factors of the social environment.
These shortcomings, referring to M. Blaug, are partly explained by the impossibility of conducting a fully controlled experiment in the social sciences, as a result of which “economists, in order to discard any theory, need much more facts than, say, physicists” 9 . M. Blaug himself, however, clarifies: “If the conclusions from the theorems of economic theory were unambiguously verifiable, no one would ever hear about the unrealistic premises. But the theorems of economic theory cannot be unambiguously verified, since all predictions here are probabilistic in nature.”
Fourth When exploring the problems of economic growth and improving the well-being of the people, the classics did not simply proceed (again, unlike the mercantilists) from the principle of achieving an active trade balance (positive balance), but tried to substantiate the dynamism and balance of the country's economy. However, as is known, they "made do" without serious mathematical analysis, the use of methods of mathematical modeling of economic problems, allowing one to select the best (alternative) option from a certain number of states of the economic situation. Moreover, the classical school considered achieving equilibrium in the economy to be automatically possible, sharing the “law of markets” by J.B. Seya.
Finally, fifthly, money, which has long been and traditionally considered an artificial invention of people, during the period of classical political economy was recognized as a product that spontaneously emerged in the commodity world, which cannot be “cancelled” by any agreements between people. Among the classics, the only one who demanded the abolition of money was P. Boisguillebert. At the same time, many authors of the classical school until the middle of the 19th century. did not attach due importance to the various functions of money, highlighting mainly one - the function of a medium of exchange, i.e. treating a monetary commodity as a thing, as a technical means convenient for exchange. The underestimation of other functions of money was due to the aforementioned misunderstanding of the reverse influence of monetary factors on the sphere of production.
The main stages of development of the classical school
In the development of classical political economy, with a certain convention, four stages can be distinguished.
First stage. Its initial stage occurred at the end of the 17th - beginning of the 18th centuries, when in England, thanks to the work of W. Peggy, and in France, with the advent of the works of P. Boisguillebert, signs of an emerging new teaching alternative to mercantilism began to form, which would later be called classical political economy. These authors sharply condemned the protectionist system that restrained free enterprise. In their works, the first attempts were made at costly interpretations of the cost of goods and services (by taking into account the amount of working time and labor spent in the production process). They emphasized the priority importance of liberal economic principles in the creation of national (non-monetary) wealth in the sphere of material production.
The next stage of this stage is associated with the period of the middle and beginning of the second half of the 18th century, when, with the advent of the so-called physiocratism - a specific movement within the framework of the classical school - the mercantile system was subjected to deeper and more reasoned criticism. The physiocrats (especially F. Quesnay and A. Turgot) significantly advanced economic science, identifying a new interpretation of a number of micro- and macroeconomic categories, although their attention was almost entirely focused on the problems of agricultural production to the detriment of other spheres of the economy and especially the sphere of circulation.
So, at the first stage, not a single representative of classical political economy, not being a professional economist, was able to achieve an in-depth study of the theoretical problems of the effective development of both industrial production and farming.
Second phase. The time period of this period of development of the “classical school” is entirely associated with the name and work of the great economist Adam Smith, whose brilliant work “The Wealth of Nations” (1776) became the special and most significant achievement of economic science throughout the last third of the 18th century.
His “economic man” and the “invisible hand” of providence were able to convince more than one generation of economists of the natural order and inevitability of the spontaneous action of objective laws, regardless of the will and consciousness of people. Largely thanks to him until the 30s. XX century both the “classics” and then the “neoclassicists” believed in the irrefutability of the proposition “laissez faire» - complete non-interference of government regulations in free competition.
The laws of the division of labor and the growth of its productivity discovered by A. Smith (based on materials from an analysis of the pin manufactory) are also considered classic. Modern concepts of a product and its properties, money, wages, profit, capital, productive labor, etc. are also largely based on his theoretical research.
Third stage. The chronological framework of this stage covers almost the entire first half of the 19th century, during which in the developed countries of the world (primarily in England and France) a transition took place from manufacturing production to plants and factories, i.e. to machine, or, as they say, industrial production, marking the completion of the industrial revolution. During this period, the greatest contribution to the treasury of the “classical school” was made by the Englishmen D. Ricardo, T. Malthus and N. Senior, who called themselves students and followers of A. Smith, the French J.B. Say, F. Bastiat, etc. And although all these authors, following their idol, considered the theory of value to be the main thing in economic science and, like him, adhered to the cost concept (according to which the origin of the cost of goods and services was seen either in the amount of money spent labor, or in production costs), nevertheless, each of them left a rather noticeable mark in the history of economic thought and the formation of liberal market relations.
For example, he was the author of one of the most odious concepts in the “classical school,” called the “law of markets” or simply “Say’s law.” For more than 100 years, this “law” was shared first by the “classics” and then by the “neoclassics” because the basis for the problems considered with its help is the balance between aggregate demand and aggregate supply, which ensures, in conditions of fluctuations in market conditions, one or another level of realization of the social product , and J.B. Say and his associates put forward, in essence, the following Smithian position: with flexible wages and moving prices, the interest rate will balance supply and demand, saving and investment at full employment.
Another researcher, D. Ricardo, who polemicized with L. Smith more than any of his contemporaries and at the same time completely shared the latter’s views on the nature of the origin of the income of the “main classes of society,” for the first time revealed the natural under conditions of free competition, the rate of profit tends to fall, developed a complete theory about the forms of land rent. He is also responsible for one of the best justifications for that time for the pattern of changes in the value of money as goods depending on their quantity in circulation.
In the works of T. Malthus, in development of A. Smith’s imperfect concept of the mechanism of social reproduction (according to Marx, “Smith’s dogma”), he put forward (contrary to the then dominant point of view about the participation of “classes” in economic life) an original theoretical position about "third parties" in accordance with which the mandatory participation in the creation and distribution of the total social product of not only the “productive”, but also the “unproductive” layers of society is justified. In addition, this scientist belongs to the idea that has not lost its relevance in our time about the influence of the number and rate of population growth on the well-being of society - the very idea that was the basis for him the first theory of population in the history of economic thought.
Fourth stage. At this final stage in the second half of the 19th century. dominated by the works of J.S. Mill and K. Marx, who comprehensively summarized the best achievements of the “classical school.” As is known, during this period the formation of a new, more progressive direction of economic thought, which later received the name “neoclassical economic theory,” had already begun. However, the popularity of the theoretical views of the “classics” remained very impressive. The reason for this was, to a large extent, that the last leaders of classical political economy, being strictly committed to the position of the efficiency of pricing in conditions of competition and, condemning class bias and vulgar apologetics in economic thought, nevertheless, in the words of P. Samuelson, sympathized with the working class and were converted "towards socialism and reforms."
In conclusion, it should be noted that in Russia, despite some progress in recent years in terms of eliminating the “literary famine” through the publication of the works of classical economists, the results achieved, alas, do not cause optimism. The fact is that published in 1991 and 1993. With a circulation of 10 thousand copies, the two-volume “Anthology of Economic Classics” is essentially the only help for Russian economists in the “classical political economy” section at the present time. The “Lithology” includes in its entirety only one work of the classics - the book “Treatise on Taxes and Fees” (the last edition was in 1940 with a circulation of 10 thousand copies). And Adam Smith’s famous “Wealth of Nations” is presented only in the first two books of the great scientist’s Pentateuch (the last edition was published in 1962 with a circulation of 3 thousand copies). With significant abbreviations (only six chapters), the two-volume work also includes the main work of D. Ricardo (the last edition was in 1955). Another bibliographic rarity - “An Essay on the Law of Population” by T. Malthus (last published in Russia in 1868) - although included in the “Anthology”, as is known, this is the first and not the main development of this scientist. At the same time, the works of such authors of classical political economy as J.B. are still published for the last time in a font with the letter “yat”. Say (M., 1896), F. Bastiat (M. 1896) and G. Carey (St. Petersburg, 1869).