Discipline introduction
Concept introduction
Classical political economy is also called classical economics and bourgeois classical political economy. Generally refers to British classical economics. Its outstanding representative and the founder of the theoretical system is Adam Smith. His "The Wealth of Nations" developed capitalist economics into a complete system. With the one-sided view of trade as the only source of wealth, Smith expanded economic research from the field of circulation to the field of production.
At the same time, Adam Smith criticized the one-sided view of the Physiocrats that only agriculture creates wealth and believes that all material production sectors create wealth.
Classical economics analyzes the market mechanism of free competition and regards it as an "invisible hand" dominating social and economic activities; opposes the state’s interference in economic life and puts forward the principle of laissez-faire; analyzes the national The conditions of wealth growth and the reasons that promote or hinder the growth of national wealth.
The mainstream school of economic thought before the emergence of Keynesian theory, founded by Adam Smith in 1776. The main followers include David Ricardo, Thomas Malthus and John Mueller. Generally speaking, this school believes that economic laws (especially personal interests, competition) determine prices and factor returns, and believe that the price system is the best resource allocation method. Classical economics, economic theory system. It was born in Britain and France in the second half of the 17th century. The main representatives are Petty, Adam Smith and Ricardo of the United Kingdom, and Quesnay of France. It opposed the feudal system, advocated laissez-faire, made a preliminary scientific analysis of the economy, laid the foundation for the labor theory of value, and revealed the class structure of society and the antagonism of interests between classes. But as an eternal mode of production, there is no recognition of its limitations.
Background
The economic thought on the eve of classical economics was "merchantism".
From the 14th to the 15th century, with the rapid development of trade, especially overseas trade, mercantilism came into being. Mercantilism’s research horizon focused on the field of circulation, studying commerce and foreign trade, and demonstrating the relationship between commodities and currencies, which played an important role in the primitive accumulation of capitalism at that time. Classical political economy as a theoretical system was founded by William Petty, Adam Smith, and David Ricardo in England.
Classical economics represents the interests of the bourgeoisie in the rising period, and to a certain extent studies the internal relations of capitalist production. The basic view of mercantilism is that money is the only form of social wealth; when a country has no gold mines, wealth can only come from a surplus in foreign trade; people are poor and countries are rich; they advocate state intervention in the economy, encourage exports, prohibit or Restrict import policy.
Disciplinary development
Classical economics refers to all political economics except Marxist political economics during the period of political economics from 1660 to 1875. study. Its origin is marked by the publication of William Petty's related works (1662), and the foundation was laid for the publication of Adam Smith's representative work "Study on the Nature and Causes of National Wealth" (1776).
One of Adam Smith’s successors is Thomas Robert Malthus (Thomas Robert Malthus), who is known for his work called population theory by later generations. After Adam Smith, it was David Ricardo who promoted the development of classical political economy and made major contributions. While inheriting Smith’s theory, he also criticized some of Smith’s views, thus forming a This seems to be different from Smith's system, and some people even call this the "Ricardo Revolution". Ricardo's success has attracted a group of followers, among them the famous James Mill.
Classical economics focuses on the study of economic aggregates, which involves economic growth, international trade, currency economy, and fiscal issues. This is different from the economics of maximizing personal benefits that prevailed after 1870. Classical economics is concerned with national economic issues. Although scholars at that time also emphasized that personal interests must be respected, they emphasized how to keep personal interests in harmony with social interests. When Smith talked about this, he always enlightened people in an honest manner. National affairs are more important than individuals.
The theoretical core of classical economics is the idea that economic growth arises from the interaction of capital accumulation and labor division. That is, capital accumulation further promotes the development of production specialization and labor division, and labor division in turn improves The total output enables society to produce more capital accumulation, and the flow of capital to the most efficient production areas will form a virtuous circle of such development. Therefore, classical economics seems to want to tell people that obeying the market's allocation of resources and maintaining a virtuous circle of capital accumulation will better promote economic growth. But they also saw that the division of labor is subject to conditions. The accumulation of capital will make the existing division of labor appear on a larger scale and show that wages will rise accordingly. However, the development of division of labor is not easy to achieve. The accumulation of capital is affected by the development of the division of labor that cannot keep up. The analysis of classical economics has produced its own contradictions. Ricardo has especially emphasized this contradiction, but his explanation cannot eliminate the contradiction in this core idea.
The controversy over the abolition of the Corn Law is part of the classical economics' proposition for free trade. Some economists have thus put forward the theory of free trade, among which Ricardo’s comparative cost theory is famous. The theory states that a country can benefit from importing even those goods that it has a competitive advantage, as long as it has a greater competitive advantage in producing other goods. Therefore, according to this theory, a country should concentrate more of its production capacity on industries with greater comparative advantages. The results of Hume's research on the international balance of payments issues laid the foundation for the development of theoretical research in this area. He believes that the balance of payments deficit will reduce the money supply through the outflow of gold, thereby also lowering the price level, making exports more competitive and imports less attractive. This equilibrium mechanism will continue to work until the outflow of gold is suspended. Until the income and expenditure reach equilibrium. The view of Ricardo and others is that when gold flows out, the issuance of banknotes as part of the money supply must be contracted, because the outflow of gold is a sign of too high price levels. These ideas are not without enlightening significance.
Later, the Marxist political economy was created from the critique of classical economics. Karl Marx once commented in a general way: "Classical political economy belongs to the period when the class struggle is not developing. Its last great representative, Ricardo, finally consciously put the opposition between class interests, the opposition between wages and profits, and the balance between profit and The opposition of land rent is taken as the starting point of his research, because he naively regards this opposition as the natural law of society. In this way, the economic science of the bourgeoisie has reached its insurmountable limit." But it is precisely because of its existence. With this critical relationship of theory, classical economics has become an important source of Marxist political economy.
Marx believes that classical economics refers to Western economics in a period of rising capitalism. "True modern economic science only begins when theoretical research has shifted from the circulation process to the production process." In the study of the capitalist production process, classical economics puts forward the point of view that labor creates value. The distribution theory has made a preliminary exploration, and its theoretical heritage occupies an important position in the source of Marxist political economy. However, due to its unavoidable limitations of the bourgeoisie, classical economics failed to examine the source and essence of surplus value, and failed to reveal the essence of the capitalist mode of production. Most classical economists regarded capitalism as natural and eternal. The social system cannot correctly reveal the law of the development of social economic relations.
Discipline definition
Classical economics has four different definitions:
1. According to Marx’s definition, classical economics refers to the rise of capitalism The period represents the political economy of progressive forces, while those economic theories that defend the capitalist system, represent the economic interests of the bourgeoisie, and are keen on describing the surface phenomena of the economic system are vulgar economics. The usage of the classical school is intended to distinguish it from vulgar economics and to illustrate the non-scientific and defensive nature of vulgar economics.
2. According to Keynes’s definition, all theories from Smith to his own are classical economics; Belongs to the school of classical economics. Keynes did this to highlight the innovative or revolutionary nature of his theory.
3. According to Schumpeter’s definition, Smith belongs to mercantilism, and the economic theory from 1790 to 1879 belongs to classical economics.
4. According to the widely accepted viewpoint in western economics today, classical economics refers to the publication of Adam Smith's "Research on the Nature and Causes of National Wealth" to Marshall's "Principles of Economics" Theory of the period before publication.
Representatives
Summary
The origin and development of classical economic theories are mainly in Britain and France. In the UK, from William. Petty (1623-1687) began, to David. Ricardo (1772-1823) ends; in France, it starts with Bouaguierber (1646-1714) and ends with Sismondi (1773-1842). Among them, the most representative figure is Adam of England. Smith and Quinay (1694-1774), the founder of the French Physiocrats.
United Kingdom
1. William. Pei (1623-1687). He is one of the most famous economists in the middle and late 17th century in England. He has engaged in many professions throughout his life, and in 1658 he was elected as a member of the Irish Parliament. Pedi was diligent in collecting information and good at thinking, so he left many records and manuscripts. There are more than 10 books on economics and economic statistics published only, and the content involves many aspects. In these works, Peti not only discussed the issues of foreign trade and the struggle for hegemony, but also focused on the issue of colonies. Like other mercantilists, Petty paid great attention to the issue of British foreign trade, which was especially evident in his earlier works including "Taxation Theory" (1662). In the view of wealth, Petty still regards the amount of currency ownership as a sign of a country's wealth. He believes that various material products are "just the wealth of one time and one place", and only metal currency "is wealth at any time and anywhere." Therefore, "the huge and ultimate result of the industry is not the abundance of general wealth, but the abundance of gold, silver and jewellery. To this end, "every effort should be made to produce commodities that can be earned from overseas and brought back currency." "In terms of foreign trade, he regards foreign trade as a source of happiness, a method of gaining wealth and power. If imports significantly exceed exports, the import of foreign goods should be restricted.
Mercantilism’s thoughts on business and colonial expansion are more specific. Petty formed his own complete set of colonial theories through political anatomy of Ireland. This theory has universal significance for the United Kingdom, and therefore for the mid to late 17th century. The British colonial policy and expansion activities had a direct impact on the establishment of the First Empire.
2. Adam Smith (1723-1790). Many people know that Adam Smith was from "invisible "The hand of a man" began. Both Marx and Western economics have no doubt that Adam Smith is the most outstanding representative of classical economics. Marx said: "In Adam. According to Smith, political economy has developed into a certain whole, and the scope of its inclusion has been formed to a certain extent. "Samuelson, the most famous contemporary American economics, said: "We can take Adam. The year Smith published "The Wealth of Nations" was regarded as the birth year of the economics he is studying now. "The Wealth of Nations" was published in 1776, and the "Declaration of Independence" was also published this year. After a comprehensive consideration, it is difficult to say which document has more important historical status. The "Declaration of Independence" sent a brand new to society Appeal, calling society to devote itself to the pursuit of life, freedom and happiness, and "The Wealth of Nations" explains how such a society works."
It was exactly a hundred years from Petty to Smith. During this period, British economics has been developing continuously, and the more influential ones are Locke, North, Massey, Hume, Stuart and so on. Smith founded the classical economic system on the basis of absorbing the research results of predecessors. Before Smith, almost all economists focused on economic policies, paid little attention to how the market economy works, and were eager to intervene in the market. Smith's greatest contribution is that he started by understanding the complicated problem of how the market economy works, and made a major discovery, namely, the self-regulating natural order (also called the free market mechanism). Here, we have to share one of Smith’s incisive words: "Everyone is not trying to promote public welfare, what he pursues is only his personal interests, and, in doing so, just like on many other occasions, he is An invisible hand leads to the promotion of a goal, and this goal is by no means what he pursues. Because he pursues his own interests, he often promotes social interests, and the effect is better than when he really wants to promote social interests The effect is much greater."-This is the famous "invisible hand".
Of course, Smith’s contribution is not only in this, it is just that he found the key to open the door of economics. His economic thoughts are mainly concentrated in the "Research on the Nature and Reasons of National Wealth". From the title of the book, it can be seen that it mainly studies the sources of wealth and how to increase wealth, and finds out the reasons that promote and hinder the growth of wealth. He has denied The view of mercantilism that only foreign trade is the only source of wealth has also discarded the prejudice that only agriculture can create wealth, and pointed out that the labor in any department is the source of wealth. "The Wealth of Nations" consists of five chapters, the main content of which is: The first chapter "the reasons for the increase in labor productivity, and the order in which labor production is naturally distributed to each class", and elaborated on the division of labor, currency, value, wages, and profit. , Land rent and other categories. The second chapter "The Nature of Assets and Their Accumulation and Uses" discusses how capital accumulation can increase national wealth. The third "On the Different Development of Wealth in Different Countries" examines the history of economic development from the Roman Empire to the late 18th century. The fourth chapter, "On the System of Political Economy", examines the influence of various economic theories and policies on the growth of national wealth. The fifth chapter "On the income of the monarch or the country" examines the influence of national finance on the growth of national wealth, which is equivalent to finance.
3. David Ricardo (1772--1823). Ricardo was born in a wealthy family and never went to college. Because of marrying a non-Jewish woman, his father severed ties with him. At that time he was only 800 pounds, 12 years later, he made billions of dollars. At this time, he even