Classical political economy

The origin of this school in the 17th century is due to the fact that the official first economic doctrine - mercantilism - is outdated, and could no longer solve the problems facing the economy of that time. Classical political economy, the ancestor of which is universally recognized by W. Petty, passed in its formation certain stages, which I would like to talk about in more detail.

The first stage - the end of the 17th century and the beginning of the 18th century, when W. Petty in England, and Pierre Boisguillebert in France began to develop new provisions for that time concerning economic issues, which were soon transformed into a thought such as the classical school of political economy.

It should be noted that in the classical school in the middle of the 18th century such an interesting trend developed as physiocracy, the founder of which is Francois Quesnay. Representatives of this trend put agriculture at the forefront, believing that only it really creates a product. And, for example, the same smiths simply transform the existing materials, so their activities are not so significant.

The second stage is completely connected with the outstanding economist Adam Smith, whose work "The Wealth of Nations" (1776) still causes the greatest interest of science. His famous "invisible hand of the market" was recognized as an outstanding idea of that time and for a long period was recognized as the only correct one. The bottom line is that there are certain objective laws that contribute to the fact that any search for the benefit of an individual will still lead to the benefit of the whole society. In turn, the market is a mechanism that balances between the interests of sellers and buyers.

The third stage (almost the entire first half of the 19th century) was marked by a transition, primarily in England, to automated production, which facilitated the industrial revolution. Classical political economy at that stage developed by D. Ricardo, T. Malthus, J.B. Say.

At the final, fourth stage, which took the whole second half of the 19th century, Karl Marx, first of all, generalization of the best works presented during all the time, while there was a classical school of political economy.

It should be said that often this school is called a little differently - bourgeois political economy. The fact is that it was precisely with this that classical political economy gained its development, since representatives focused on protecting the interests of the bourgeoisie. His proposals on the non-interference of the state in the economy of the classics were opposed to the ideas of mercantilists who advocated the widespread application of protectionist policies.

Classical political economy is a truly fundamental study of many economic processes on the basis of not just speculations and assumptions, but theoretical studies. Thus the classics contrasted with mercantilist empiricism.

Classical political economy is characterized by the following factors:

1. The basis of the labor theory of value. Classics said that any product is valued in terms of how much effort was spent on its production.
2. The state should minimize interference in the economy.
3. The view of the classics is chained to the sphere of production, while the sphere of circulation is taking second place.
4. The category "economic man" has been introduced, that is, only that everyone seeks to profit, but moral and moral principles are neglected.
5. Money was not given much attention, most of their functions were simply not considered. Money is just something that can be used to exchange goods.
6. The dependence was allocated: the more wages, the greater the increase in workers, and vice versa.

Thus, classical political economy is a doctrine that replaced mercantilism, which, due to certain factors (the development of commodity-money relations, the completion of the process of the initial accumulation of capital , etc.) did not keep pace with the economic progress of the society of that time. However, for science, both currents are of incredible value and are studied with interest not only by economists.