Classical political economy originated 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 also underlie modern economics. Its founder is William Petty. The subject of the study of political economy, in his opinion, is the analysis of the problems of the sphere of production, tk. the creation and growth of wealth takes place exclusively in the branches of material production.

Petty identifies four factors of production: land and labor are the main ones, the qualification of the worker and the means of his labor are not the main ones. Thus, he considered two measures of value - labor and land.

An important place in his writings is occupied by the labor theory of value. He distinguished between market and natural prices. The 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 balance of supply and demand.

Based on the labor theory of value, Petty viewed rent as the difference between the value of a commodity and the wages needed to keep the worker alive.

Petty took a significant step forward on the question of the price of land. In his opinion, it should represent capitalized rent, i.e. the sum of annuities for a given number of years.

What W. Petty expressed in the form of conjectures, Adam Smith (1723-1790) substantiated as a system, a detailed concept set forth in the scientist's famous work "A Study on the Nature and Causes of the Wealth of Nations". In it, he singles out 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. Selfishness is the basis of all economic processes. The common good is formed as a result of the actions of individual individuals, each of which strives for its own benefit. The economic relations of people are formed spontaneously. In his teaching, for the first time, the enormous role of the free market as a regulator of production is shown. 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 him the role of a "night watchman", and not a regulator and regulator of economic processes.

Smith considers production to be the source of wealth, and 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 due to the natural propensity of people to exchange, and the depth of the division of labor is related to the size of the market. In the product, he distinguishes two components: exchange value and use value. At the same time, labor acts as a source and measure of value. Smith identifies three main types of income: wages, profits and rent.

He first introduced the categories of gross and net income. Gross income is the 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.

David Riccardo (1772-1823) was the most important economist of the era of the industrial revolution in England. He builds his concept on the labor theory of value. He considers utility as a necessary prerequisite for value, that is, what has no utility cannot have an exchange value.

Riccardo derives the law of money circulation: if the quantity of goods and their price remain unchanged, the amount of money needed for circulation depends on the value of money. Thus, he comes to the quantity theory of money, to the derivation of the value of money from its quantity.

Riccardo considered the problem of distribution to be the main problem of political economy. The source of all income is labor. The size and ratio of the incomes of individual classes are determined not by their contribution to the creation of wealth, but by completely different factors. Ricardo's theory of wages boils down to the proposition that wages are regulated by the value of the minimum subsistence of workers and cannot rise above this level for a long time. Considering the relationship between the size of profits and earnings of workers, Ricardo came to the conclusion that an increase in nominal wages leads to a decrease in profits.

A special place in his writings is occupied by the theory of land rent. According to Riccardo, nature does not participate in the creation of rent, and does not determine the price level. There can be no different prices for the same product in the market. The price of grain grown in areas favorable for agriculture is set at a level corresponding to the value of costs on the worst lands. As a result, producers who are in the best conditions, that is, those who have the best land, receive additional income - land rent.

A certain contribution was made by Riccardo to the theory of foreign trade, and above all the principle of comparative advantage. According to his teachings, all countries benefit from international exchange, therefore each country gets the opportunity to save the cost of its labor, specializing in the production of those goods that are more profitable to produce in this country, but not in comparison with other countries, but in comparison with the production of other goods in this particular 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: labor - wages, capital - profit, land - rent.

Say's theory of markets became widespread. He came to the conclusion that since every seller is also a buyer, a general sales crisis is impossible, only partial imbalances are possible; everyone is interested in the well-being of all, the prosperity of one industry is favorable for all other industries; those sections 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 gained wide popularity with his essay "An Essay on the Law of Population". He proclaimed that the main and permanent cause of poverty was not in bad government and not in the uneven distribution of wealth, but in 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 causes of wars. The population, according to his calculations, doubles every 25 years, growing exponentially, 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, as 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, created research tools, without which its further development would be impossible.

As the foundations of market economic relations were further formed in the developed countries of the world, it became more and more obvious that state intervention in economic activity is not a panacea in overcoming obstacles in increasing national wealth and achieving consistency in the relationships between 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 decomposition of mercantilism, became at the same time the starting point for the onset of conditions "full 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 XVII - beginning of the XVIII century. this idea has become a kind of motto of market liberal economic policy. And it was from that time that a new theoretical school of economic thought was born, which would later be called classical political economy.

The "classical school" waged a decisive struggle against the protectionist ideology of the mercantilists, turning to the latest methodological achievements of science of that era and deploying truly fundamental theoretical research. Its representatives countered the empiricism of the mercantilist system with professionalism, which, according to the same P. Samuelson, would no longer allow "advisers to the king" to convince their monarchs that an increase in the country's wealth is associated with the establishment of state control over the economy, including restraining imports and encouraging exports and a thousand other "detailed orders".

The "classics", unlike 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, pushing into the background the capital employed in trade, money circulation and lending operations. For this reason as a subject of study of "classics" preferred mainly the sphere of production.

As for method of study and economic analysis, then its novelty in the "classical school" is connected, as already mentioned, with introduction of the latest methodological techniques, which provided sufficiently deep analytical results, a lesser degree of empiricism 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 the methodology of economic science.

The first of them, in particular, believes that “many epigones of classical economists saw the task of economic science in studying not really occurring events, but only those forces that, in some, not quite 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 equally drawn 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 has become the accomplishment of another historical metamorphosis in relation to the name and purpose of economic science. As is known, during the time of the ancient Greek philosophers, the term "saving" or "economy" was perceived almost literally in the translation of the words "oikos" (household) and "nomos" (rule, law) and had a semantic load housekeeping, family or personal household management processes. During the period of the mercantilist system, economic science, which received the name “political economy” thanks to D. Montchretien, was already perceived as the science of the state economy 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 economics 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 did not at all allowed no apologetics, no slipping on the surface of economic phenomena. But, in his opinion, the "classical school" with its characteristic class orientation "explored the production relations of bourgeois society." N. Kondratiev, it seems, did not dispute this provision either, he believed that the teachings of the "classics" dealt with the analysis of the conditions for free economic activity "only in the capitalist system."

General Features of Classical Political Economy

Continuing the general characterization of almost two hundred years of the history of classical political economy, it is necessary to single out its common features, approaches and trends and give them an appropriate assessment. They can be reduced to the following generalization.

First, the rejection of protectionism in the economic policy of the state and the predominant analysis of the problems of the sphere of production in isolation from the sphere of circulation, the development and application of progressive methodological methods of research, including causal (causal), deductive and inductive, logical abstraction. In particular, the reference to observable "laws of production" removed any doubt that the predictions obtained by means of logical abstraction and deduction should be subjected to experimental verification. As a result, the classical opposition between the spheres of production and circulation caused an underestimation of the natural interconnection 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 in solving practical problems answers to the main questions were given by posing these questions, as N. Kondratiev put it, "evaluative". For this reason, he believes, “answers were obtained that have the character of evaluative maxims or rules, namely: a system based on freedom of economic activity is the most perfect, freedom of 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, based on causal analysis, calculations of average and total values ​​of economic indicators, the classics (unlike the mercantilists) tried to identify the mechanism for the formation of the cost of goods and price fluctuations in the market not due to the “natural nature” of money and their quantity in the country. , but in connection with production costs or, according to another interpretation, the amount of labor expended. Undoubtedly, since the time of classical political economy, there has been no other economic problem in the past, and N. Kondratiev also pointed to this, which would attract “such close attention of economists, the discussion of which would cause so much mental stress, logical tricks and polemical passions, as the problem of value . And at the same time, it seems difficult to indicate another problem, the main directions in the solution of which would remain so irreconcilable, as in the case of the problem of value.

However costly 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 to it. Therefore, the opinion of N. Kondratiev, who wrote: “The foregoing digression 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 judgments of value or practical ones, is quite fair. As a rule, authors are convinced that those judgments that are in fact judgments of value are just as scientific and justified as those that are theoretical judgments” 6 . A few decades later (1962), Ludwig von Mises made a similar point. “Public opinion,” he writes, “is still under the impression of the scientific attempt of the representatives of classical economic theory 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 up to the final consumer, but were forced to start their constructions from the actions of a businessman for whom consumer utility estimates are given ”(emphasis mine. - Ya.Ya.).

Thirdly, the category of "value" was recognized by the authors of the classical school as the only initial category of economic analysis, from which, as in the scheme of a genealogical tree, other essentially derivative categories bud (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, which one, and how Is its value determined (quantitative problem)? 4. What serves as a 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, as it were, imitated the mechanical adherence to the laws of physics, i.e. the search for purely internal causes of economic well-being in society without taking into account the psychological, moral, legal and other factors of the social environment.

These shortcomings, referring to M. Blaug, are partly due to the impossibility of conducting a completely 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 could be unambiguously verified, no one would ever hear about the unrealistic assumptions. But the theorems of economic theory cannot be unambiguously verified, since all predictions here are probabilistic in nature.

Fourth, exploring the problems of economic growth and improving the welfare of the people, the classics did not simply proceed (again, unlike the mercantilists) from the principle of achieving an active trade balance (surplus), but tried to justify the dynamism and balance of the state of the country's economy. However, as is known, they "managed" without serious mathematical analysis, the use of methods of mathematical modeling of economic problems, allowing you to choose the best (alternative) option from a certain number of states of the economic situation. Moreover, the classical school considered the achievement of equilibrium in the economy to be automatically possible, sharing the “law of markets” of J.B. Say.

Finally, fifthly, money, which has long and traditionally been considered an artificial invention of people, during the period of classical political economy was recognized as a commodity spontaneously released in the world of commodities, 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 up to the middle of the XIX century. they did not attach due importance to the various functions of money, highlighting mainly one - the function of the medium of circulation, i.e. interpreting the 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 effect of monetary factors on the sphere of production.

The main stages in the development of the classical school

In the development of classical political economy, with a certain conventionality, four stages can be distinguished.

First stage. Its initial stage falls at the end of the 17th - beginning of the 18th century, when in England, thanks to the work of W. Peggy and in France, with the advent of the works of P. Boisguillebert, signs of a new doctrine that was emerging as an alternative to mercantilism began to form, which would later be called classical political economy. These authors sharply condemned the protectionist system that curtailed freedom of enterprise. In their writings, the first attempts were made to costly interpretations of the cost of goods and services (by taking into account the amount of labor 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 the beginning of the second half of the 18th century, when with the advent of the so-called Physiocratism - a specific trend within the classical school - the mercantilist system was subjected to deeper and more reasoned criticism. Physiocrats (especially F. Quesnay and A. Turgot) significantly advanced economic science, outlining 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 areas 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, could achieve an in-depth study of the theoretical problems of the effective development of both industrial production and farming.

Second phase. The time span of this period of development of the "classical school" is entirely connected with the name and work of the great scientist and economist Adam Smith, whose brilliant work "The Wealth of Nations" (1776) became a 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, regardless of the will and consciousness of people, of the spontaneous action of objective laws. Largely thanks to him until the 30s. XX century both the "classics" and then the "neoclassics" believed in the irrefutability of the position on "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 the analysis of the pin manufactory), are rightfully considered classic. Modern concepts about the product and its properties, money, wages, profits, capital, productive labor, etc. are 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 manufactory production to plants and factories, i.e. to machine, or, as they say, industrial production, which marks the accomplishment 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 and others. And although all these authors, following their idol, considered the theory of value to be the main one 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 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 first shared by the “classics” and then by the “neoclassics” because the basis of the problem of balance between aggregate demand and aggregate supply considered with its help, which ensures, in conditions of market fluctuations, one or another level of realization of the social product , and Zh.B. Say and his associates invested, in fact, the following Smithian position: with flexible wages and flexible prices, the interest rate will balance supply and demand, saving and investment at full employment.

Another researcher, D. Ricardo, who argued with L. Smith more than his other contemporaries and at the same time fully shared the latter’s views on the nature of the origin of incomes of the “main classes of society”, for the first time revealed a natural under conditions of free competition, the tendency of the rate of profit to decrease, developed a complete the theory of the forms of land rent. He also deserves the merit of one of the best substantiations for that time for the regularity of the change in the value of money as commodities, depending on their quantity in circulation.

In the works of T. Malthus, in the development of A. Smith's imperfect concept of the mechanism of social reproduction (according to Marx, "Smith's dogma"), an original theoretical position on "third parties" in accordance with which the obligatory participation in the creation and distribution of the total social product is justified not only by “productive”, but also by “unproductive” strata of society. In addition, this scientist belongs to the idea that has not lost its relevance in our time about the impact on the well-being of society by the number and rate of population growth - the very idea that was put by him as the basis the first theory of population in the history of economic thought.

Fourth stage. At this final stage in the second half of the XIX 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 largely due to the fact that the last leaders of classical political economy, being strictly committed to the position on the effectiveness of pricing in a competitive environment and condemning class bias and vulgar apologetics in economic thought, nevertheless, in the words of P. Samuelson, sympathized with the working class and were turned towards socialism and reforms.

In conclusion, it should be noted that in Russia, despite certain progress in recent years in terms of eliminating the “literary hunger” 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 10,000 copies, the two-volume Anthology of Economic Classics is, in essence, the only help for Russian economists in the section “classical political economy” at the present time. Only one classic work, the book Treatise on Taxes and Duties, is fully included in Lithology (the last edition was in 1940 with a circulation of 10,000 copies). And the famous "Wealth of Nations" by Adam Smith 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 3,000 copies). With significant reductions (only six chapters), the main work of D. Ricardo is also included in the two-volume set (the last edition was in 1955). Another bibliographic rarity is T. Malthus's "Experience on the Law of Population" (last published in Russia in 1868) - although included in the "Anthology", but, as you know, 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 Zh.B. Say (M., 1896), F. Bastiat (M. 1896) and G. Carey (St. Petersburg, 1869).

The classical school of political economy arose during the period of the birth and establishment of the capitalist mode of production. In the 16th century in England, in the depths of the feudal system, new, capitalist relations began to develop. Gradually, with the development of manufactories, commercial capital is subordinated to industrial capital. However, mercantilism, which studied the problems of circulation, gives way to the classical school, which transferred research to the sphere of production. Political economy as a science began with the works of the classical school. It was the classics who made an attempt - and not unsuccessfully - to represent the entire diversity of the economic world as a single whole, to bring into a system individual provisions, conjectures, observations, conclusions, to isolate and agree on categories and concepts.

Turning to the works of the founders of economic theory, as a rule, does not have a direct, narrowly utilitarian meaning. However, it is interesting that some modern authors, using the programming apparatus, are trying to mathematically verify the correctness of the basic postulates of A. Smith, the consistency of the most important provisions of his work.

Adam Smith (1723-1790) was a brilliant English economist, the founder of classical political economy. In 1776 the famous work of the scientist "A Study on the Nature and Causes of the Wealth of Nations" was published. Since the appearance of this book, political economy has emerged as an independent economic science.

Smith's idea of ​​the "invisible hand" is one of the main ideas of The Wealth of Nations. The meaning of this aphoristic expression is as follows.

Smith proceeds from the fact that the desire of everyone for their own benefit, for the multiplication of personal wealth, serves as the most important motive for human activity. It is the driving force behind action. And this is a prerequisite for creating a just and rational order in society.

Each participant in economic activity is guided by his own interest, pursues personal goals. The influence of an individual on the realization of the needs of society is almost imperceptible. But, pursuing his own benefit, a person ultimately contributes to an increase in the social product, the growth of the common good. The "invisible hand" of market laws directs to a goal that was not at all part of the intentions of an individual. Smith showed the motive power and significance of self-interest as an internal spring of competition and an economic mechanism.

David Ricardo (1772-1823) is one of the brightest personalities of the classical political economy of England, a follower and an active opponent of certain theoretical positions of Adam Smith. Riccardo's economic theory is the first scientific system of political economy of the period of industrial capitalism. Ricardo was a follower of Smith in an attempt to systematize economic knowledge and search for methods of theoretical explanation of the economy.

As is known, D. Ricardo consistently adhered to the labor theory of value. Labor has its price, which, in his opinion, is determined by the cost of the means of subsistence required to support the worker and his family. A change in wages does not affect the cost (and price) of the products produced. Only the ratio between wages and profits received by the entrepreneur changes: "Everything that increases wages necessarily reduces profits." Thus, wages and profits are inversely related.

According to D. Ricardo, the value of a commodity or the quantity of any other commodity for which it is exchanged depends on the relative amount of labor that is necessary for its production, and not on more or less remuneration that is paid for this labor.

A prerequisite for the growth of wealth is the division of labor. Smith begins his research with an analysis of the division of labor. The division of labor increases the dexterity of each worker, saves time when moving from operation to operation. It promotes the use of more advanced machines and mechanisms, more efficient methods that facilitate labor and make it more productive.

Smith's famous pin manufactory example is mentioned in many textbooks. If everyone, working alone, performs all the operations, then in a day of work he is able to produce 20 pins. If the workshop employs 10 workers, each of whom specializes in one operation, then together they will produce 48,000 pins. As a result of the manufactory organization of labor, its productivity increases 240 times.

Among other factors in the multiplication of wealth, Smith identifies population growth, an increase in the proportion of the population involved in production, the transition from manufactory to factory, freedom of competition, and the abolition of customs barriers.

In the work of D. Ricardo "The beginnings of political economy and taxation" there is a special chapter "Value and wealth, their distinctive properties." Ricardo believes that it would be wrong to equate an increase in value with an increase in wealth. Unlike Smith, he makes a distinction between value and material wealth. The extent of wealth, its growth, depends on the availability of essential necessities and luxuries at the disposal of people. No matter how the value of these items changes, they will equally satisfy their owner. Value is different from wealth, it "depends not on abundance, but on the difficulty or ease of production."

A prerequisite for increasing wealth, Ricardo notes, is the growth of labor productivity. The lower the cost of producing a unit of goods, the higher the results of labor efforts, the greater the size of wealth. Ricardo considered the category of capital as part of the wealth of the country, which is used in production and consists of food, clothing, tools, raw materials, machines necessary to set labor in motion.

John Stuart Mill (1806-1873) - the last representative of the English classical political economy. His main work on economic theory, "Fundamentals of Political Economy and Some Aspects of Their Application to Social Philosophy", was published in 1848.

In his work “Principles of Political Economy”, he sought to combine and harmonize the ideas and positions of his predecessors and colleagues, although there were many differences in their approaches to the analysis of economic reality. Mill acts not only as a systematist and popularizer of economic knowledge. He succeeded in deepening or clarifying a number of provisions, in finding more exhaustive formulations, and in arguing conclusions and conclusions more fully.

Population theory is the only means to ensure full employment and high wages by voluntarily limiting population growth:

• 1. the theory of productive labor: only productive labor, the results of which are tangible, creates wealth. New is work for the protection of property and the acquisition of qualifications
• 2. wages - wages for labor and depends on the supply and demand for labor. Wages, other things being equal, are lower if the work is less attractive?
• 3. rent theory - compensation paid for the use of land
• 4. value is relative: the creation of value by labor, the distinction between exchange and use value
• 5. change in the amount of money affects the change in the relative prices of goods (quantity theory of money)

Mill set the task of writing an updated version of A. Smith's The Wealth of Nations. And he succeeded to a certain extent. Throughout the second half of the 19th century, Mill's book (1848) was the undisputed bible of economists.

So, Mill systematized, deepened the ideas, provisions, methodology of the classics. His "Principles of Political Economy" is not a new system, but a development of the old concept of the classical school, its updated version.

The “classics” presented the processes taking place in the economy in the most generalized form as a sphere of interrelated laws and categories, as a logically coherent system of relations.

A. Smith and D. Ricardo showed that the source of wealth is not foreign trade (mercantilists), not nature as such (physiocrats), but the sphere of production, labor activity in its various forms. The labor theory of value (value), which does not completely refute the usefulness of the product, served as one of the starting points of political economy.

The founders of the first truly scientific school tried to answer the question of what is the measure of labor. The interconnectedness of the main factors of production was demonstrated; problems that did not fit into the strict framework of classical theory are indicated.

From looking for external forces or appealing to the "reason" of power structures, Smith and Ricardo turned the analysis into the sphere of revealing the internal causes underlying the functioning of a market economy. The point is not just in the versatility of the analytical conclusions of the classics, but in their logic and consistency. The provisions and conclusions reached by the "classics" received a more complete and detailed disclosure in the works of followers and opponents.

The classical school is not just a collection of principles and postulates. Such an assessment of the school would be too general, largely formal. The classical theory is a "scaffolding" and at the same time the fundamental basis of science, open to development and deepening, clarification and expansion of topics, improvement of methodology, substantiation of new conclusions and conclusions. The works of these greatest representatives of the school of classical political economy are still relevant, because the world economy is developing according to their postulates.

Mercantilism - the first concept of market economic theory

1. At the stage of the priority role in the economic science of mercantilism, the concept dominated: simple

1) protectionism

2) economic liberalism

2. The subject of study of mercantilism is: simple

1) sphere of circulation (consumption)

2) sphere of production (offers)

3) the sphere of agricultural production

4) the sphere of circulation and the sphere of production at the same time

3. The priority method of economic analysis of mercantilism is: simple

1) empirical method

2) causal method

3) functional method

4) historical method

5) mathematical method

4. In accordance with the economic views of mercantilists, wealth is: simple

2. goods and services

3. money and goods having a material essence

5. In accordance with the mercantilist concept, the source of monetary wealth is: average

1) the growth of foreign investment

2) violent conquest of foreign markets

3) unlimited freedom of entrepreneurial activity

4) excess of imports over exports

5) excess of exports over imports

6. The government was engaged in damage to the national coin during the period: simple

1) early mercantilism

2) late mercantilism

3) throughout the mercantilism

7. In accordance with the views of mercantilists, macroeconomic equilibrium is ensured in the country: a simple

1) government coordinating measures

2) without state intervention in economic life

3) partial state intervention in economic life

8. Colbertism is a characteristic of protectionist policy in the economy, as a result of which the capacity of the domestic market:

1) does not change

2) changes gradually

3) narrows

4) expands

5) shrinks and expands at the same time

1) Aristotle

2) F. Aquinas

3) A. Montchretien

5) K. Marx

The origin and development of classical political economy

1. At the stage of the priority role in the economic science of classical political economy, the concept dominated: simple

1) protectionism

2) economic liberalism

3) social control of society over the economy

2. The subject of classical political economy is: simple

1) sphere of circulation (consumption)

2) production area (offers)

3) the sphere of circulation and the sphere of production at the same time

4) the sphere of agricultural production

5) a combination of economic and non-economic factors

3. In classical political economy, the priority method of economic analysis is: simple

1) empirical method

2) causal method

3) functional method

4) historical method

5) mathematical method

4. In accordance with the economic views of representatives of classical political economy, wealth is:

1. gold and silver money

2. goods and services

3. money and goods having a material essence

5. According to classical political economy, money is: simple

1) an artificial invention of people

2) the most important factor of economic growth

3) a technical tool, a thing that facilitates the exchange

4) the equivalent of wealth

6. According to classical political economy, wages as a worker's income gravitate: the average

1) to the physiological minimum

2) to the living wage

3) to the highest possible level

4) to the optimal level

1) nominalistic theory of money

2) metal theory of money

3) quantity theory of money

4) natural-economic relations

5) bimetallism systems

6) to a constant level

8. W. Petty and P. Boisguillebert - the founders of the theory of value, determined by: simple

1) labor costs (labor theory)

2) production costs (cost theory)

3) marginal utility

4) based on legal factors

5) Based on product differentiation

9. According to the classification proposed by F. Quesnay, farmers represent: simple

1) productive class

2) class of landowners

3) barren class

4) proletariat

5) the capitalist class

10. According to the teachings of F. Quesnay about the “pure product”, the latter is created: the average

1) in trade

2) in industry

3) in the banking sector

4) in small-scale farming

5) in agricultural production

1) W. Petty

2) F. Quesnay

4) K. Marx

5) A. Turgot

12. A. Turgot considers labor to be the only source of all wealth: average

1) merchant

2) farmer (farmer)

3) artisan

4) usurer

13. According to A. Smith, capital invested adds more value to real wealth and income: average

1) into trade

2) to industry

3) in the banking sector

4) in agricultural production

5) in all areas of the economy

14. The "invisible hand" of A. Smith is: complex

1) the mechanism of state management of the economy

2) operation of objective economic laws

3) the mechanism of management, due to divine providence

4) the operation of natural laws

5) interaction of the laws of nature and economics

15. According to the methodological position of A. Smith, private interest: average

1) inseparable from the general interest

2) stands above the public

3) secondary to public

4) develops the worst qualities of a person

5) hinders the progressive development of the economy

16. In the structure of trade, A. Smith placed in the first place: complex

1) domestic trade

2) foreign trade

3) transit trade

4) petty trade

5) retail

17. According to A. Smith, in every developed society the cost of goods is determined by: average

1) labor costs

2) labor and capital costs

3) the amount of income

4) marginal utility

5) marginal utility and marginal cost

18. A. Smith considers labor productive if it is applied: simple

1) in agricultural production

2) in any branch of material production

3) in the branches of material and non-material production

4) in foreign trade

5) in the field of science

19. In the capital structure, A. Smith distinguishes the following parts: simple

1) initial and annual advances

2) fixed and working capital

3) constant and variable capital

4) fixed and variable costs

5) current and future expenses

20. The thesis "Smith's fabulous dogma" arose from K. Marx due to the fact that A. Smith: complex

1) considers automatic equilibrium in the economy impossible

2) allows the division of capital into fixed and variable

3) identifies the principle of identifying the value of the "annual product of labor" and "the price of any commodity"

4) adheres to the theory of intensive reproduction

5) adheres to the theory of expanded reproduction

21. N.S. Mordvinov, being a follower of the economic teachings of A. Smith, considers the source of the origin of wealth: the average

1) industry

2) trading

4) industry, trade and science at the same time

22. A.K. Storch, being a follower of the economic teachings of A. Smith, admits the productive nature of labor: average

1) in material production

2) in non-material production

3) in material and non-material production

Introduction

Main part

Chapter 1. General characteristics of the classical direction:

1.1 Definition of classical political economy

1.2. Stages of development of classical political economy

1.3. Features of the subject and method of studying classical political economy

Chapter 2. The First Stage in the Development of Classical Political Economy

2.1. The economic doctrine of W. Petty

2.2. The economic doctrine of P. Boisguillebert

2.3. Economic doctrine of F. Quesnay

Chapter 3. The Second Stage in the Development of Classical Political Economy

3.1. Economic doctrine of A. Smith

Chapter 4. The third stage in the development of classical political economy

4.1. The economic doctrine of D. Ricardo

4.2. The economic doctrine of Zh.B. Seya

4.3. The economic doctrine of T. Malthus

Chapter 5. The Fourth Stage in the Development of Classical Political Economy

5.1. The economic doctrine of J. S. Mill

5.2. The economic doctrine of K. Marx

Conclusion

Bibliography

Introduction

This work characterizes the classical direction in the history of economic doctrines. It examines the following range of questions: what caused the displacement of the concept of mercantilism and the two hundred years of the dominance of classical political economy; how the term “classical political economy” is interpreted in economics; what stages does classical political economy cover in its development; what are the features of the subject and method of studying the "classical school", as well as the main economic theories at the four stages of development of the classical school of political economy.

CHAPTER 1. General characteristics of the classical direction

1.1. Definition of classical political economy

Classical political economy arose when entrepreneurial activity, following the sphere of trade, money circulation and lending operations, also spread to many branches of industry and the sphere of production as a whole. Therefore, already in the manufacturing period, which brought to the fore in the economy the capital employed in the sphere of production, the protectionism of the mercantilists ceded its dominant position to a new concept - the concept of economic liberalism, based on the principles of non-intervention of the state in economic processes, unlimited freedom of competition of entrepreneurs.

This period marked the beginning of a truly new school of political economy, which is called classical primarily for the scientific nature of many of its theories and methodological provisions that underlie modern economics.

As a result of the decay of mercantilism and the strengthening of the growing trend of limiting direct state control over economic activity, "pre-industrial conditions" have lost their former significance and "free private enterprise" has prevailed. The latter, according to P. Samuelson, led “to the conditions of complete laissez faire (that is, 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 has been a steady expansion of the economic functions of the state.

In fact, the principle of "total laissez faire" became the main motto of a new direction of economic thought - classical political economy, and its representatives debunked mercantilism and the protectionist policy promoted by it in the economy, putting forward an alternative concept of economic liberalism. At the same time, the classics enriched economic science with many fundamental provisions, which in many respects have not lost their relevance at the present time.

It should be noted that for the first time the term "classical political economy" was used by one of its consummators K. Marx in order to show its specific place in "bourgeois political economy". And the specificity, according to Marx, lies in the fact that from W. Petty to D. Ricardo in England and from P. Boisguillebert to S. Sismondi in France, classical political economy "explored the actual production relations of bourgeois society."

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 system of economic education in most countries of the world, the selection of the “classical school” as an appropriate section of the course on the history of economic doctrines is carried out primarily from the point of view of the common characteristics and features inherent in the works of its authors. Such a position makes it possible to attribute to the number of representatives of classical political economy a number of scientists of the 19th century - followers of the famous A. Smith.

For example, one of the leading economists of our time, Professor of Harvard University J.K. Galbraith, in his book "Economic Theories and the Goals of Society" believes that "the ideas of A. Smith were further developed by David Ricardo, Thomas Malthus and, in particular, by John Stuart Mill and received the name classical system. In the textbook "Economics", widely distributed in many countries, by the American scientist, one of the first Nobel Prize winners in economics, P. Samuelson, it is also stated that D. Ricardo and J. S. Mill, being "the main representatives of the classical school ... developed and improved Smith's ideas.

1.2. Stages of development of classical political economy

According to the generally accepted assessment, 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 complete the school. According to another - the most common in the scientific world - the classics exhausted themselves in the last third of the 19th century. works of J.S. Mill.

In the development of classical political economy, with a certain conventionality, four stages can be distinguished.

First stage covers the period from the end of the XVII century. until the beginning of the second half of the 18th century. This is the stage of a significant expansion of the sphere of market relations, reasoned refutation of the ideas of mercantilism and its complete debunking. The main representatives of the beginning of this stage, W. Petty and P. Boisguillebert, regardless of each other, were the first in the history of economic thought to put forward the labor theory of value, according to which the source and measure of value is the amount of labor expended on the production of a particular commodity product or good. Condemning mercantilism and proceeding from the causal dependence of economic phenomena, they saw the basis of the wealth and welfare of the state not in the sphere of circulation, but in the sphere of production.

The so-called physiocratic school, which became widespread in France in the middle and early second half of the 18th century, completed the first stage of classical political economy. The leading authors of this school, F. Quesnay and A. Turgot, in their search for a source of net product (national income), attached decisive importance along with labor to land. Criticizing mercantilism, the Physiocrats delved even more deeply into the analysis of the sphere of production and market relations, although mainly in the field of agriculture, unduly moving away from the analysis of the sphere of circulation.

Second phase The development of classical political economy covers the period of the last third of the 18th century. and is undoubtedly connected with the name and works of A. Smith - the central figure among all its representatives. His "economic man" and the "invisible hand" of providence convinced more than one generation of economists about the natural order and inevitability, regardless of the will and consciousness of people, of the spontaneous operation of objective economic laws. Largely thanks to him until the 30s. In the 20th century, the provision on the complete non-interference of government regulations in free competition was considered irrefutable. And it is about him, as a rule, they say that "... not a single Western student, scientist can consider himself an economist without knowledge of his (A. Smith. - Ya. Ya.) works."

According to N. Kondratiev, under the influence of the views of A. Smith among the classics, all their teaching is a preaching of an economic system based on the principle of freedom of individual economic activity as an ideal. The authors of one of the popular books of the early XX century. “History of Economic Doctrines” S. Gide and S. Rist noted that mainly the authority of A. Smith turned money into “a commodity even less necessary than any other commodity, a burdensome commodity that should be avoided as far as possible. This tendency to discredit money, shown by Smith in the fight against mercantilism, - they write, - will be picked up later by his followers, and having exaggerated it, they will lose sight of some features of monetary circulation. his followers "try to prove that money is not important, but at the same time they themselves are not able to consistently adhere to this thesis." And only some condescension to this omission of the classics (primarily A. Smith and D. Ricardo) is made by M. Blaug, believing that “... their skepticism in relation to monetary panaceas was quite appropriate in an economy suffering from a lack of capital and chronic structural unemployment.

It should be noted that the laws of the division of labor and the growth of its productivity, discovered by A. Smith (based on the analysis of the pin manufactory), are also considered classic. Modern concepts of a product and its properties, income (wages, profits), capital, productive and unproductive labor, and others are also largely based on his theoretical research.

Third stage The evolution of the classical school of political economy falls on the first half of the 19th century, when the industrial revolution was completed in a number of developed countries. During this period, the followers, including the students of A. Smith (as many of them called themselves), subjected to in-depth study and rethinking of the main ideas and concepts of their idol, enriched the school with fundamentally new and significant theoretical provisions. Among the representatives of this stage, it is worth highlighting the French J.B. Say and F. Bastiat, the English D. Ricardo, T. Malthus and N. Senior, the American G. Carey and others. Although these authors, following, as they argued, A Smith, the origin of the value of goods and services was seen either in the amount of labor expended or in production costs (but this kind of costly approach actually remained unproven), yet each of them left a rather noticeable mark in the history of economic thought and the formation of market relations.

Thus, J.B. Say, in his “law of markets”, dogmatic from the standpoint of modern economic theory, for the first time introduced into the framework of economic research the problem of balance between supply and demand, the implementation of the total social product depending on market conditions. It is obvious that both J.B. Say and other classics invested in the basis of this “law” the proposition that with flexible wages and flexible prices, the interest rate will balance supply and demand, savings and investment at full employment.

D. Ricardo argued with A. Smith more than his other contemporaries. But, fully sharing the latter's views on the incomes of the "main classes of society", he for the first time revealed the regularity of the tendency of the rate of profit to decrease, developed a complete theory about the forms of land rent. One of the best substantiations of the regularity of changes in the value of money as commodities, depending on their quantity in circulation, must also be attributed to his merits.

Fourth stage The development of classical political economy covers the period of the second half of the 19th century, during which the above-mentioned J.S. Mill and K. Marx summarized the best achievements of the school. On the other hand, by this time new, more progressive areas of economic thought were already gaining independent significance, later called "marginalism" (end of the 19th century). As for the innovation of the ideas of the Englishman J.S. Mill and K. Marx, who wrote his works in exile from his native Germany, these authors of the classical school, being strictly committed to the position on the effectiveness of pricing in a competitive environment and condemning class bias and vulgar apologetics in economic thought , nevertheless sympathized with the working class, were turned "to socialism and reforms." K. Marx, in addition, emphasized the increasing exploitation of labor by capital, which, intensifying the class struggle, should, in his opinion, inevitably lead to the dictatorship of the proletariat, the “withering away of the state” and the equilibrium economy of a classless society.

1 .3. Features of the subject and method of studying classical political economy

Studying the general characteristics of the history of classical political economy, it is necessary to single out its common features, approaches and trends in terms of the subject and method of study and evaluate them.

First of all, the predominant analysis of the problems of the sphere of production in isolation from the sphere of circulation, the development and application of progressive methodological methods of research, including cause-and-effect, deductive and inductive, logical abstraction. At the same time, a class-based approach to observable "laws of production" and "productive labor" removed any doubt that the predictions obtained through logical abstraction and deduction should be subjected to experimental verification. As a result, the classical opposition between the spheres of production and circulation, productive and unproductive labor caused an underestimation of the natural interconnection of economic entities in these spheres (“the human factor”), the reverse influence on the sphere of production of monetary, credit and financial factors and other elements of the sphere of circulation.

The classics, when solving practical problems, gave answers to the main questions, posing these questions, as N. Kondratyev put it, “evaluatively”. This circumstance also did not contribute to the objectivity and consistency of economic analysis and theoretical generalization of the classical school of political economy.

Secondly, Based on a cause-and-effect analysis, calculations of average and total values ​​of economic indicators, the classics tried to identify the mechanism of the origin of the cost of goods and fluctuations in the level of prices in the market, not due to the “natural nature” of money and their quantity in the country, but due to production costs.

However, the cost principle of determining the level of prices by 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 to it.

Thirdly , the category "value" was recognized by the authors of the classical school as the only initial category of economic analysis, from which, as in the scheme of a genealogical tree, other derivatives of the category essentially bud (grow). In addition, this kind of simplification of analysis and systematization led the classical school to the fact that economic research itself, as it were, imitated the mechanical adherence to the laws of physics, i.e. search for purely internal causes of economic well-being in society without taking into account psychological, moral, legal and other factors of the social environment.

Fourth , exploring the problems of economic growth and improving the well-being of the people, the classics did not simply proceed from the principle of achieving an active trade balance (surplus), but tried to justify the dynamism and equilibrium of the state of the country's economy. However, at the same time, they did without serious mathematical analysis, the use of methods of mathematical modeling of economic problems, which make it possible to choose the best (alternative) option from a certain number of states of the economic situation.

Fifth, money, which has long and traditionally been considered an artificial invention of people, during the period of classical political economy was recognized as a commodity spontaneously released in the world of commodities, 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 up to the middle of the XIX century. they did not attach due importance to the various functions of money, highlighting mainly one - the function of the medium of circulation, i.e. interpreting the monetary commodity as a thing, as a technical means convenient for exchange. The underestimation of other functions of money was due to a misunderstanding of the reverse impact of monetary factors on the sphere of production.

Chapter 2. The First Stage in the Development of Classical Political Economy

2.1. The economic doctrine of W. Petty

William Petty (1623-1687) - the founder of classical political economy in England, who set forth his economic views in works published in the 60-80s of the 17th century.

In the works of W. Petty, the subject of study of economic science (political economy) is the analysis of problems in the sphere of production. This, in particular, is evident from the conviction of this scientist that the creation and increase of wealth supposedly takes place exclusively in the sphere of material production, and without any participation in this process of trade and commercial capital.

His views were of a transitional nature from mercantilism to classical political economy. He explained such economic phenomena as the price of a commodity, wages, the price of land, and others. Petty distinguished between the "natural price" of a commodity (the value determined by labor) and the market price. He was the first to formulate the beginnings of the theory of labor value. He considered only one type of labor to be a direct source of value - the extraction of gold and silver (i.e., monetary material).

Petty's doctrine of wages and rent is directly connected with the theory of value. He argued as follows: the commodity is not labor power, but labor, and wages are the price of labor, you just need to determine its value.

Rent, according to Petty, is the value of the crop (it depends on the quality of the plot) without taking into account production costs, i.e. excess value created by labor over wages. Petty does not consider profit separately. Petty's teaching on the price of land is interesting: the sale of land is the sale of the right to receive rent and must be calculated from the sum of annual rents (without loan interest).

2.2. The economic doctrine of P. Boisguillebert

Pierre Boisguillebert (1646-1714) - the founder of classical political economy in France. Like the founder of a similar school of economic thought in England, W. Petty, he was not a professional scientist - an economist.

P. Boisguillebert, like W. Petty, opposing the mercantilists with his own vision of the essence of wealth, came to the so-called concept of social wealth, the latter, in his opinion, manifests itself not in the physical mass of money, but in all the variety of useful goods and things.

Thus, according to Boisguillebert, not the multiplication of money, but, on the contrary, the growth of the production of “food and clothing” is the main task of economic science. Like W. Petty, Boisguillebert considers the analysis of problems in the sphere of production to be the subject of study of political economy, recognizing this sphere as the most significant and priority in comparison with the sphere of circulation.

2.3. Economic doctrine of F. Quesnay

The formation of the economic thought of France of this period is associated with the ideas of Pierre Boisguillebert and Francois Quesnay (1694-1774).

François Quesnay in 1758 created his "Economic Table", which became the basis for the physiocrats, who turned to the sphere of production, looking for a source of surplus value there. They limited this area to agriculture only.

In his famous "Economic Table" F. Quesnay performed the first scientific analysis of the circulation of economic life, i.e. social reproduction process. The ideas of this work testify to the need to observe and reasonably predict certain national economic proportions in the structure of the economy. He revealed the relationship, which he characterized as follows: “Reproduction is constantly renewed by costs, and costs are renewed by reproduction”

Further, Quesnay put forward the concept of "natural order", by which he understood an economy with free competition, a spontaneous game of market prices without state intervention. Quesnay also argued that when exchanging things of equal value, wealth is not created and profit does not arise, so he was looking for profit outside the sphere of circulation.

Chapter 3. The Second Stage in the Development of Classical Political Economy

3.1. Economics of Adam Smith

In the second half of the 18th century favorable conditions developed in England for the rise of economic thought. Classical political economy reached its highest development in the works of British scientists Adam Smith and David Ricardo. Like their predecessors, the founders of the classical school viewed economics as the study of wealth and how to increase it.

Adam Smith's main work on political economy is the fundamental work - "An Inquiry into the Nature and Causes of the Wealth of Nations". Smith's book consists of five parts. In the first, he analyzes questions of value and income, in the second, the nature of capital and its accumulation. In them, he outlined the foundations of his teachings. In other parts, he considers the development of the European economy in the era of feudalism and the formation of capitalism, the history of economic thought and public finances.

Adam Smith explains that the main theme of his work is economic development: the forces that act temporarily and control the wealth of nations.

"An Inquiry into the Nature and Causes of Wealth" is the first full-fledged work in economics that sets out the general basis of science - the theory of production and distribution. Then an analysis of the operation of these abstract principles on historical material and, finally, a number of examples of their application in economic policy. Moreover, all this work is imbued with the lofty idea of ​​"an obvious and simple system of natural freedom", towards which, as it seemed to Adam Smith, the whole world was moving. The central motif - the soul of "The Wealth of Nations" - is the action of the "invisible hand"; we get our bread not by the mercy of the baker, but from his selfish interest. Smith was able to guess the most fruitful idea that under certain social conditions, which we today describe by the term "working competition", private interests can indeed be harmoniously combined with the interests of society. The market economy, not controlled by the collective will, not subject to a single plan, nevertheless, follows strict rules of conduct. The impact on the market situation of the actions of one individual, one of many, can be imperceptible. Indeed, he pays the prices that are asked of him, and can choose the quantity of goods at these prices, according to his greatest advantage. But the totality of these individual actions sets prices; each individual buyer is subject to prices, and the prices themselves are subject to the totality of all individual reactions. Thus, the "invisible hand" of the market provides a result that does not depend on the will and intention of the individual.

Moreover, this market automatism may well, in a certain sense, optimize the allocation of resources. Smith took off the burden of proof and postulated that decentralized, atomistic competition, in a certain sense, provides "maximum satisfaction of needs." Undoubtedly, Smith gave deep meaning to his doctrine of "maximum satisfaction of needs." He showed that:

· Free competition seeks to equate prices with production costs, optimizing the distribution of resources within these industries;

· Free competition in the markets for factors of production tends to equalize the net advantages of these factors in all industries and thus establishes the optimal distribution of resources between industries.

He did not say that various factors would be combined in optimal proportions in production, or that goods would be optimally distributed among consumers. He did not say that economies of scale and the side effects of production often interfere with the achievement of a competitive optimum, although the essence of this phenomenon is reflected in his discussion of public works. But he did take the first step towards the theory of the optimal allocation of these resources under perfect competition.

In fairness, it should be noted that his own belief in the advantages of the "invisible hand" is least of all related to considerations about the efficiency of resource allocation in the static conditions of perfect competition. He considered a decentralized price system desirable because it produces results in dynamics: it expands the scale of the market, multiplies the advantages associated with the division of labor - in a word, it works like a powerful engine that ensures the accumulation of capital and income growth.

Smith was not content with declaring that a free market economy was the best way to live. He pays a lot of attention to the exact definition of the institutional structure that would guarantee the best possible operation of market forces.

He understands that:

· personal interests can equally hinder and promote the growth of the welfare of society;

· the market mechanism will establish harmony only when it is included in the appropriate legal and institutional framework.

Chapter 4. The third stage in the development of classical political economy

4.1. The economic doctrine of D. Ricardo

The entire economic system of Ricardo arose as a continuation, development and criticism of Smith's theory. At the time of Ricardo, the industrial revolution was in its infancy, the essence of capitalism was far from being fully manifested. Therefore, the teachings of Ricardo continue the ascending line of development of the classical school.

The peculiarity of Ricardo's position is that the subject of political economy for him is the study of the sphere of distribution. In his main theoretical work, Principles of Political Economy and Taxation, Ricardo writes, referring to the distribution of the social product: "To determine the laws that govern this distribution is the main task of political economy." One might get the impression that on this issue Ricardo takes a step backwards compared to A. Smith, since he puts forward the sphere of distribution as the subject of political economy. However, in reality this is not at all the case. First of all, Ricardo will by no means exclude the sphere of production from the object of his analysis. At the same time, Ricardo's emphasis on the sphere of distribution aims to single out the social form of production as its own subject of political economy. And although Ricardo did not bring the problem to its full scientific solution, the importance of such a formulation of the question in the works of the finalist of the classical school can hardly be overestimated.

In the works of Ricardo, in fact, an attempt is outlined to single out the production relations of people, in contrast to the productive forces of society, and to declare these relations their own subject of political economy. Ricardo actually identifies the entire set of production relations with distribution relations, thereby significantly limiting the scope of political economy. Nevertheless, Ricardo gave a deep interpretation of the subject of political economy, came close to the secrets of the social mechanism of the capitalist economy. He was the first in the history of political economy to base the economic theory of capitalism on the labor theory of value, which reflects the general relations most typical of capitalism, namely commodity relations.

The new thing that Ricardo introduced into the labor theory of value is due, first of all, to a change in the historical situation, the transition of manufacturing capitalism to machine-level capitalism. An important merit of Ricardo is that, relying on the labor theory of value, he came closer to understanding the single basis of all capitalist incomes - profit, land rent, interest. Although he did not discover surplus value and the law of surplus value, however, Ricardo clearly saw that labor is the only source of value and, therefore, the incomes of classes and social groups not participating in production are in fact the result of the appropriation of someone else's unpaid labor.

Ricardo's theory of profit has two major contradictions:

· The contradiction between the law of value and the law of surplus value, which resulted in Ricardo's inability to explain the origin of surplus value from the point of view of the law of value;

· The contradiction between the law of value and the law of average profit, which was expressed in the fact that he failed to explain the average profit and the price of production from the standpoint of the theory of labor value.

The main drawback of D. Ricardo's theory is his identification of labor power as a commodity with its function - labor. Thus, he avoids the problem of clarifying the essence and mechanism of capitalist exploitation. But, nevertheless, Ricardo comes quite close to the correct quantitative determination of the price of labor, in fact, the value of labor power. Delimiting the natural and market prices of labor, he believes that under the influence of supply and demand, the natural price of labor is reduced to the cost of a certain amount of means of subsistence, necessary not only for the maintenance of workers and procreation, but also to a certain extent for development. Consequently, the natural price of labor is a value category.

According to Ricardo, the market price of labor fluctuates around the natural price under the influence of the natural movement of the working population. If the market price of labor exceeds the natural one, the number of workers increases significantly, the supply of labor increases, at a certain stage increasing the demand for it. Due to these circumstances, unemployment arises, the market price of labor begins to fall. Its fall continues until the size of the working population begins to decline, the supply of labor decreases in accordance with the magnitude of the demand for it. At the same time, the market price of labor decreases in relation to the natural one. Thus, D. Ricardo's interpretation of the natural price of labor is rather contradictory.

David Ricardo was the consummator of bourgeois political economy precisely because the scientific truths he revealed became increasingly socially dangerous for the political and economic positions of the ruling class.

4.2. The economic doctrine of Jean Baptiste Sey

Official economics in France in the first half of the XIX century. represented the "Say school". The "Say School" praised the capitalist entrepreneur, preached the harmony of class interests, and opposed the labor movement.

In 1803, Say's book, A Treatise of Political Economy, or A Simple Statement of the Way in which Wealth is Produced, Distributed, and Consumed, was published. This book, which Say subsequently revised and supplemented many times for new editions (during his lifetime there were only five of them), remained his main work. The labor theory of value, which the Scot followed, although not quite consistently, gave way to a "pluralistic" interpretation, where the cost was made dependent on a number of factors: the subjective utility of the product, the costs of its production, supply and demand. Smith's ideas about the exploitation of wage labor by capital (that is, elements of the theory of surplus value) completely disappeared from Say, giving way to the theory of factors of production. Say followed Smith in his economic liberalism. He demanded a "cheap state" and advocated minimizing its intervention in the economy. In this respect, too, he belonged to the physiocratic tradition. In 1812, Say published the second edition of the Treatise. In 1828-1930. Say published a 6-volume "Complete Course in Practical Political Economy", in which, however, he did not give anything new in comparison with the "Treatise".

In the first edition of the Treatise, Say wrote four pages on sales. They expressed in a vague form the idea that a general overproduction of goods in the economy and economic crises are impossible in principle. Any production itself generates incomes, for which goods of the corresponding value are necessarily bought. Aggregate demand in an economy is always equal to aggregate supply. In his opinion, only partial disproportions can arise: too much of one product is produced, and too little of the other. But it straightens out without a general crisis. In 1803, Say formulated the law according to which the supply of goods always gives rise to a corresponding demand. Those. in this way, he excludes the possibility of a general crisis of overproduction, and also believes that free pricing and minimization of state intervention in the market economy will cause automatic regulation of the market.

Production not only increases the supply of goods, but also, through the necessary coverage of production costs, generates demand for these goods. "Products pay for products" is the essence of Say's Law of Markets.

Demand for the products of any industry should increase in real terms when the supply of all industries increases, because it is the supply that creates the demand for the products of this industry. Say's law therefore warns us against applying to macroeconomic performance the judgments derived from microeconomic analysis. An individual commodity can be produced in excess relative to all other commodities; a relative overproduction of all commodities at once cannot in any way occur.

If we talk about the application of Say's law to the real world, then this affirms the unreality of the excess demand for money. "Unreality" in this case can hardly mean a logical impossibility. It must be understood that the demand for money cannot always be in excess, because this corresponds to a situation of disequilibrium.

Using Say's arguments, the bourgeoisie put forward progressive demands for the reduction of the bureaucratic state apparatus, freedom of enterprise and trade.

4.3. The economic doctrine of T. Malthus

A bright, original contribution to economics was made by the representative of the classical school, the Englishman T. Malthus. Treatise T. Malthus "Experience on the Law of Population", published in 1798, made and is making such a powerful impression on the reading public that discussions about this work are ongoing to this day. The range of assessments in these discussions is extremely wide: from "brilliant foresight" to "anti-scientific nonsense."

T. Malthus was not the first to write about demographic problems, but, perhaps, he was the first to try to propose a theory describing the patterns of population change. As for his system of evidence and statistical illustrations, a lot of claims were made against them already in those days. In the 18th-19th centuries, the theory of T. Malthus became known mainly due to the fact that its author for the first time proposed a refutation of the widespread thesis that human society can be improved through social reform. For economic science, the treatise of T. Malthus is valuable for those analytical conclusions that were subsequently used by other theorists of the classical and some other schools.

As we know, A. Smith proceeded from the fact that the material wealth of society is the ratio between the volume of consumer goods and the population. The founder of the classical school paid the main attention to the study of the patterns and conditions for the growth of production volume, but he practically did not consider issues related to the patterns of population change. This task was undertaken by T. Malthus.

From the point of view of T. Malthus, there is a contradiction between the "instinct of procreation" and the limited land suitable for agricultural production. The instincts make humanity multiply at a very high rate, "exponentially". In turn, agriculture, and only it produces the food products necessary for people, is capable of producing these products at a much lower rate, "in arithmetic progression." Therefore, any increase in food production will be absorbed sooner or later by an increase in population. Thus, the cause of poverty is the ratio of the rate of population growth and the rate of growth of living goods. Any attempt to improve living conditions through social reform is thus brought to naught by the growing human mass.

T. Malthus connects the relatively low growth rates of food products with the action of the so-called law of diminishing soil fertility. The meaning of this law is that the amount of land suitable for agricultural production is limited. The volume of production can grow only due to extensive factors, and each next land plot is included in the economic circulation with more and more costs, the natural fertility of each next land plot is lower than the previous one, and therefore the overall level of fertility of the entire land fund as a whole tends to decrease . Progress in the field of agricultural production technology is generally very slow and is not able to compensate for the decline in fertility.

Thus, endowing people with the ability for unlimited reproduction, nature, through economic processes, imposes restrictions on the human race that regulate the growth of numbers. Among these constraints, T. Malthus identifies: moral constraints and poor health, which lead to a decrease in the birth rate, as well as vicious life and poverty, which lead to an increase in mortality. The decrease in the birth rate and the increase in mortality are ultimately determined by the limited means of subsistence.

In principle, quite different conclusions can be drawn from such a formulation of the problem. Some commentators and interpreters of T. Malthus saw in his theory a misanthropic doctrine that justifies poverty and calls for wars as a method of eliminating the surplus population. Others believe that T. Malthus laid the theoretical foundations for the "family planning" policy, which has been widely used in the last thirty years in many countries of the world. T. Malthus himself only in every possible way emphasized only one thing - it is necessary for each person to take care of himself and be fully responsible for his hindsight.

Chapter 5. The Fourth Stage in the Development of Classical Political Economy

5.1. The economic doctrine of J. S. Mill

John Stuart Mill is one of the finalists of classical political economy and "a recognized authority in scientific circles whose research goes beyond technical economics."

J.S. Mill published his first "Experiments" in political economy when he was 23 years old, i.e. in 1829. In 1843, his philosophical work "System of Logic" appeared, which brought him fame. The main work (in five books, like that of A. Smith) entitled "Fundamentals of Political Economy and Some Aspects of Their Application to Social Philosophy" was published in 1848.

J.S. Mill accepted the Ricardian view on the subject of political economy, highlighting the "laws of production" and "the laws of distribution."

To the theory of value, J.S. Mill considered the concepts of "exchange value", "use value", "value" and some others, he draws attention to the fact that the cost (value) cannot increase for all goods at the same time, since the cost represents is a relative concept.

Wealth, according to Mill, consists of goods that have an exchange value as a characteristic property. “A thing for which nothing can be obtained in return, no matter how useful or necessary it may be, is not wealth ... For example, air, although it is an absolute necessity for a person, has no price on the market, since it can be obtained practically free of charge." But as soon as the limitation becomes tangible, the thing immediately acquires an exchange value. The monetary expression of the value of a commodity is its price.

The value of money is measured by the number of goods that can be bought with it. “Other things being equal, the value of money changes inversely with the amount of money: any increase in the amount lowers their value, and any decrease increases it in exactly the same proportion ... This is a specific property of money.” We begin to understand the importance of money in the economy only when the monetary mechanism fails.

Prices are directly set by competition, which arises from the fact that the buyer tries to buy cheaper, and sellers try to sell more expensive. Under free competition, the market price corresponds to the equality of supply and demand. On the contrary, “the monopolist may, at his discretion, charge any high price, so long as it does not exceed that which the consumer cannot or will not want to pay; but it cannot do this, only by limiting the supply.

In a long period of time, the price of a commodity cannot be lower than its cost of production, since no one wants to produce at a loss. Therefore, the state of stable equilibrium between supply and demand "occurs only when objects are exchanged for each other in proportion to their production costs."

Mill calls capital the accumulated stock of products of labor arising from savings and existing "through its constant reproduction." Saving itself is understood as "refraining from current consumption for the sake of future benefits." Therefore, savings increase with the rate of interest.

Production activity is limited by the amount of capital. However, “every increase in capital leads or can lead to a new expansion of production, and without a certain limit ... If there are people capable of working and food for their livelihood, they can always be used in any kind of production.” This is one of the main provisions that distinguish classical economics from later ones.

Mill acknowledges, however, that other limitations are inherent in the development of capital. One of them is the reduction in income from capital, which he explains by the fall in the marginal productivity of capital. Thus, an increase in the volume of agricultural production "can never be achieved otherwise than by increasing the expenditure of labor in a proportion that increases that in which the volume of agricultural production increases."

On the whole, in stating the question of profit, Mill tends to adhere to the views of Ricardo. The emergence of an average rate of profit leads to the fact that profits become proportional to the capital employed, and prices become proportional to costs. “So that profit can be equal where costs are equal, i.e. costs of production, things must be exchanged for each other in proportion to their costs of production: things that have the same costs of production must also have the same value, because only in this way will the same costs bring the same income.

Mill analyzes the essence of money on the basis of a simple quantitative theory of money and the theory of market interest.

Mill's work meant the completion of the formation of classical economics, the beginning of which was laid by Adam Smith.

5.2. The economic doctrine of Karl Marx

One of the fundamental economic doctrines of the 19th century is Marxism. The ideas of Marx and Engels were set forth in many works, but the main one, containing the economic concept of Marxism in the most expanded form, is Capital.

The first volume of "Capital" includes the definition of the concepts of value, exchange value, forms of value and their development. The study of the forms of value, from simple to monetary, was of great importance for the study of the essence and origin of money. An important conclusion of Marx was the position that in the conditions of spontaneous commodity production, the economic relations of people are manifested through the relations of things. This gives rise to commodity fetishism.

Further, Marx analyzes the process of exploitation of hired labor power, formulates the doctrine of surplus value, which reveals the essence of labor power as a commodity, its common features with ordinary goods and specific features as a commodity of a special kind. In addition, Marx considers the process of production of surplus value. Of particular importance in Marx's study of the mechanism of creating surplus value is the analysis of constant and variable capital, as well as the two main ways to increase surplus value: by lengthening the working day and by reducing the necessary working time. The main conclusion of the first volume of "Capital" is the idea of ​​a historical trend of the capitalist trend.

In the second volume of "Capital" Marx explores the process of circulation of capital. He considers the metamorphoses of capital and their circulation, the turnover of capital, the reproduction and circulation of all social capital. Important in the development of the Marxist doctrine of capital and its structure was the division of capital into fixed and circulating.

Marx makes the basis of his analysis of the reproduction of all social capital by dividing it into two subdivisions - the production of means of production and the production of means of consumption. Using this division, Marx constructs his schemes of simple and extended reproduction. Based on the analysis of these schemes, the movement of the social product is studied both within each subdivision and between them.

The third volume of "Capital" contains a study of the process of capitalist production taken as a whole. It reveals the dialectical unity of the process of reproduction and circulation of capital, considers the transformation of surplus value into profit, profit into average profit, and value into the price of production. In addition, the loan capital and interest are examined. Marx shows that loan capital is a detached part of industrial capital, that in loan interest the fetishization of production relations reaches its highest level. The study of the converted forms of surplus value ends with an analysis of ground rent.

In general, the economic theory of Marxism had a great influence on the development of European, and especially Russian, economic science.

Conclusion

The classical school of political economy is one of the mature trends in economic thought that have left a deep mark on the history of economic thought. The economic ideas of the classical school have not lost their significance to this day. The classical direction originated in the 17th century and flourished in the 18th and early 19th centuries. The greatest merit of the classics is that they put 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, the liberal trend in the economy. Representatives of the classical school developed a scientific understanding of surplus value, profit, taxes, land rent. In the depths of the classical school, in fact, economic science was born.

The main ideas of classical political economy are:

Bibliography:

2. Bartenev A., Economic theories and schools, M., 1996.

3. Blaug M. Economic thought in retrospect. M.: "Delo Ltd", 1994.

4. Yadgarov Ya.S. History of Economic Thought. M., 2000.

5. Galbraith J.K. Economic theories and goals of society. Moscow: Progress, 1979.

6. Zhid Sh., Rist Sh. History of economic doctrines. M.: Economics, 1995.

7. Kondratiev N.D. Fav. op. M.: Economics, 1993.

8. Negeshi T. History of economic theory. - M.: Aspect - press, 1995.