Topic 8 Transformation of political economy into a science 1. Classical English political economy (A. Smith, D. Ricardo, D.S. Mill); 2. Economic views of J.-B. Seya. 3. Socio-economic ideas of T.R. Malthus; 4. Economic ideas of utopian socialists. 5. Economic teachings of K. Marx.

Classical school Classical political economy is a direction of economic thought that reflects the essence of free competition capitalism. The main provisions of the classical school: 1. The wealth of society is not money, but simple products necessary for people’s lives (necessities, convenience and pleasure, as A. Smith puts it) 2. These products are provided only by material production, therefore labor in material production and will be a source of wealth, the basis of the value of goods (labor theory of value) 3. Labor is considered in different aspects: Labor is the source of wealth, value and all income in society; Labor as a commodity exchanged for other goods; Labor as an experience (the burden of labor); Labor as the cost of producing goods. 4. The main factor in increasing labor productivity is the division of labor, or specialization 5. In order for production and labor to be effective, economic freedom with its principle of laissez faire is required 6. At the center of the study is the economic man, who is endowed with selfishness and strives for personal gain , wants to constantly improve his financial situation. This selfish interest of each person forces people to unwittingly serve each other, which is a powerful incentive for economic activity and, as a consequence, leads to an increase in social wealth. (A. Smith: “It is not because of the benevolence of the butcher, the brewer, or the baker that we expect to receive dinner from them, but because of their concern for their own welfare.)

Adam Smith (1723–1790) Main work: An Inquiry into the Nature and Causes of the Wealth of Nations (1776) It consists of five books: 1. The causes of increased productivity of labor and the order in according to which its product is naturally distributed among the different classes of the people. 2. On the nature of capital, its accumulation and application. 3. On the development of well-being among different nations. 4. On systems of political economy (essay on the history of economic doctrines). 5. On the income of the sovereign or the state (the doctrine of finance). The starting point of A. Smith's economic doctrine is the idea that the wealth of a nation is created by labor in material production, and the most important factors of economic progress are the division of labor (specialization) and the growth of labor productivity. (He illustrates the progressiveness of specialization using the example of a pin factory). Money in Smith's teaching is a fleeting intermediary that facilitates the exchange of goods, a universal means of exchange. To minimize circulation costs, he called for preference for paper money Adam Smith

Adam Smith (1723–1790) A. Smith shared the labor theory of value, but was not entirely consistent on this issue, since he determined the value of a product not only by labor costs, but also by purchased labor and income. He considered the main incomes in a capitalist society to be wages, profit and rent, which are received respectively by the main classes of bourgeois society - workers, capitalists and landowners. The source of all income is labor. In this case, profit and rent are created by the unpaid labor of workers. Capital is the part of the stock on which the capitalist expects to make a profit, and the main factor in the accumulation of capital is thrift. The division of capital into fixed and circulating capital applies to all sectors of the economy. A. Smith was the first to introduce the concepts of gross and net income into economics. Gross income is the total social product. Net income is the newly created value or national income. Created the theory of absolute advantage in foreign trade. The foundation of the doctrine is the idea of ​​economic liberalism. (principle of plaissez faire): the state is the night watchman of capitalism; economic regulators (free prices that develop depending on supply and demand during competition) are the invisible hand of the market. Light taxes are the basis of the nation's well-being.

David Ricardo (1772–1823) Main work Principles of political economy and taxation (1817) The preface states the main task of political economy: to determine the laws that govern the distribution of the product between the classes of landowners, capitalists and workers. The main research method was the abstract, model method. D. Ricardo consciously and consistently professed the labor theory of value. In his opinion, only labor is the only creator of the value of freely reproduced goods. Cost is determined not by average labor costs, but by labor costs under worst-case conditions. if they are needed to satisfy society's need for a given product. Money is a technical means of exchange. He derived the value of money (gold and silver) from the amount of labor spent on their production. At the same time, he professed the quantitative theory of money, that is, he determined the value of money by its quantity in circulation. He considered gold to be the best base for monetary circulation and advocated the free exchange of banknotes for gold.

David Ricardo (1772–1823) D. Ricardo considered labor to be the source of all income in society. Wages are payment for labor. It is regulated by demographic factors, depends on the supply and demand for labor and is reduced to the cost of the worker’s means of subsistence (the subsistence minimum) due to the natural law of population (the iron law of wages). Profit is the difference between the price of goods and the price of labor (wages). It is the product of a worker's unpaid labor. One way to increase profits is to increase labor productivity. Profit is subject to the law of falling rates of profit. Rent (considered only differential rent) is the excess value over average profit, which is formed due to differences in the fertility and location of land plots. He considered land ownership to be the only basis for receiving rent. Recognized the law of diminishing soil fertility. Created the theory of comparative advantage in the international division of labor. Advocated for freedom of foreign trade and the removal of all restrictions on the export of any goods and money (the idea of ​​free trade)

Jean-Baptiste Say (1767–1832) Jean-Baptiste Say Main works: Treatise of Political Economy (1803) and Complete Course of Political Economy (). J.-B. Say presented the problems of political economy in the traditional order that has become today: production, distribution, exchange, consumption. J.-B. Say owns the theory of three factors of production: labor, land and capital participate equally in production (value creation) and generate corresponding income during distribution: wages, rent and profit. Profit, in turn, is divided into interest and business income. J.-B. Say introduced the concept of entrepreneur into economic science, considering its functions to attract idle capital at the risk of receiving large capital in the future

Jean-Baptiste Say (1767–1832) Jean-Baptiste Say Most of all J.-B. Say is known as the author of the law of markets, which later received his name. There are several formulations of this law, the most popular are the following: production itself ensures sales and supply itself generates demand. From Say’s law it follows that there are no reasons for crises of overproduction under capitalism. Only temporary disruptions in the course of social production are possible as a result of partial overproduction in certain industries.

Thomas Robert Malthus (1766–1834) The most famous work: An Essay on the Law of Population (1798), Basic ideas: Subsistence, by virtue of the law of diminishing returns of the soil, cannot grow faster than in arithmetic progression. The population is growing exponentially and could double every 25 years if left unchecked. This desire of the population to reproduce, exceeding the growth of means of subsistence, is the law of population, dooming part of the population to poverty and extinction. Thus, Malthus was the first to point out a non-healing ulcer on the body of humanity - the discrepancy between population growth and the increase in the amount of food. Therefore, there is a need to morally curb the reproductive instinct of the lower strata of society. Hunger, disease and war are to a certain extent useful, since they reduce the population of the Earth. More people, and the means of food will be found, they said before Malthus; more food, and people will come, says Malthus. This leads to different attitudes towards state policy: let the state encourage population, they demanded in the 18th century; All incentives of this kind are useless and even harmful, Malthus believed and opposed state support for the unemployed and the poor: “It is necessary to openly refuse to recognize the imaginary right of the poor to be supported at public expense.” You have to completely not understand my teaching in order to consider me an enemy of population reproduction. The enemies I fight are vice and poverty. “A person who has come to an already busy world, if his parents cannot feed him, which he can reasonably demand, and if society does not need his labor, has no right to any food; in essence, he is superfluous on earth. Nature commands he should leave and will not hesitate to carry out his sentence herself.” It is especially necessary to insist on the dissemination of the truth that the duty of man is not to propagate the breed, but to spread by all possible means happiness and virtue, and that if a man has no reasonable hope of achieving this goal, then nature does not at all prescribe him to leave behind descendants." T.R. Malthus was a foreign honorary member of the St. Petersburg Academy of Sciences (1826) The population of the globe at the turn of the 18th-19th centuries did not exceed 800 million people

Thomas Robert Malthus T. Malthus is responsible for the discovery of the so-called iron law of wages, according to which the amount of workers' wages is determined by the cost of living. In his work Principles of Political Economy (1820), T. Malthus expressed interesting thoughts about the realization of the total social product and crises of overproduction. In his opinion, crises are temporary, as they are caused by underconsumption of workers and capitalists, their inability to absorb the entire volume of production. This gives rise to the problem of implementation, which is solved through the involvement of third parties in consumption. To these T. Malthus included the landed aristocracy, military, government officials, priests, judges, doctors and teachers. This class, although unproductive, maintains demand in society. D.M. really liked this idea. Keynes, he used it in his theory of effective demand Quotes “It is necessary to openly refuse to recognize the imaginary right of the poor to be supported at public expense.” It is especially necessary to insist on the dissemination of the truth that the duty of man is not to propagate the breed, but to spread by all possible means happiness and virtue, and that if a man has no reasonable hope of achieving this goal, then nature does not at all prescribe him to leave behind descendants." "A person who comes into an already occupied world, if his parents cannot feed him, which he can reasonably demand, and if society does not need his labor, has no right to any food; in essence, he is superfluous on earth. Nature commands him to leave and will not hesitate to carry out her sentence herself." Finding everywhere a reason for his complaints and accusations, he does not think to look at the real cause of his disasters. He blames himself almost after everyone else, and yet in reality He alone deserves censure. His only justification can only be that he is misled by the judgments disseminated by the upper classes of society. Perhaps, feeling the gravity of his situation, he regrets that he got married, but it does not even occur to him that. By marrying, he committed an act worthy of condemnation. On the contrary, he was always assured that by giving his sovereign and country new subjects, he was committing a commendable act; one gets the idea that he is suffering for a just cause, that it is unfair and cruel on the part of the sovereign and the fatherland to leave him in a pitiful position in gratitude for the benefit rendered to him at their own invitation and as a result of their repeated statements that such services from his sides are necessary. Let us leave the guilty person to the punishment awarded by nature itself. He acted contrary to the voice of reason, and therefore cannot blame anyone and must complain about himself if his action is accompanied by regrettable consequences for him. Access to parish trustees should be closed to him, and if private charity provides him with any assistance, then the interest of philanthropy insistently demands that it not be overly generous. By abandoning their children, parents commit a crime for which responsibility falls on themselves; Society suffers a relatively small loss in this case, because for it one child is easily replaced by another. If children are dear to us, it is because of the sweet passion inherent in us, called parental love. When there are people who refuse the gift sent to them by heaven itself, then society is not at all obliged to take their place. ...

Mill John Stuart () John Stuart Mill Five-volume work by D.S. Mill's Principles of Political Economy with Some Applications to Social Philosophy (1848) was considered the best textbook on political economy for at least half a century after its publication. D.S. Mill tried to combine the theory of A. Smith, Say's law of markets, T. Malthus's law of population, the doctrine of rent and the theory of foreign trade of D. Ricardo. Interesting are ideas about the historicity of the laws of distribution, about the reverse influence of prices on supply and demand, about market failures, for example, in the field of education, about the important role of the state in the development of science and technology, about the need for social peace and equalization of incomes of members of society “Only in backward countries of the world, production growth is still an important goal: what is economically necessary in the most developed countries is better distribution.” People don't want to be rich; people want to be richer than others

Utopian socialism A special direction of economic thought of the 19th century. became utopian socialism, the outstanding representatives of which were the French thinkers Henri de Saint-Simon (1760–1825) and Charles Fourier (1772–1837), as well as the Englishman Robert Owen (1771–1858). They criticized the existing capitalist system as unjust and exploitative and put forward projects for a future society. In their social ideal, private property should be replaced by public or collective property, and everyone would be rewarded according to their work. In such a society, planning of economic activities will be applied and the opposition between mental and physical labor will disappear. A. de Saint-Simon called this system socialism, R. Owen - communism. It was R. Owen who tried to put his ideas into practice, creating several communes in England and the USA (New Lemark, 1816)

Karl Heinrich MARX (1818–1883) Born in Trier, Germany Studied at the universities of Bonn and Berlin - editor of the Rhenish Gazette 1844 - beginning of friendship with F. Engels 1848 - co-author of the "Communist Manifesto" 1859 - publication of the work "Toward Political Criticism" economy" - leadership of the First International 1867 - publication of "Capital" (1st volume)

Friedrich Engels (1820–1895) Friedrich Engels, friend and closest ally of Karl Marx, one of the most outstanding scientists and revolutionaries in the history of mankind... F. Engels was born into the family of a textile manufacturer in the city of Barmen. In 1842 he moved to Manchester (Great Britain), where he worked in the office of his father’s factory; collaborated with the Rheinische Gazeta. A meeting with Marx in Paris in 1844 marked the beginning of their friendship. Engels actively participated in the organization (1847) and activities of the “Union of Communists”, together with Marx he wrote the program of the Union “Manifesto of the Communist Party” (1848). In June 1848 and May 1849, together with Marx, he published the New Rhine Newspaper in Cologne. In November 1849, Engels moved to London, and in November 1850 to Manchester, where he worked in his father's trading office for another 20 years. From 1870 he lived in London, next to Marx. F. Engels provided constant financial assistance to Marx. Together with Marx, he led the activities of the First International. After the death of a friend, he was an adviser and leader of the European socialists. The main works of F. Engels: “The situation of the working class in England” (1845); The Holy Family (1845), The German Ideology (), both with Karl Marx; "The Peasant War in Germany" (1850); "Anti-Dühring" (1878); "The Origin of the Family, Private Property and the State" (1884); "Ludwig Feuerbach and the End of Classical German Philosophy" (1886); "Dialectics of Nature" (published 1925); Photo from 1840

Karl Marx (1818–1883) The main work of K. Marx is Capital (Critique of Political Economy), consisting of four volumes. The first volume is devoted to the process of production of capital, the second - to the process of its circulation, in the third - the process of production and circulation of capital is considered as a single whole, the fourth volume (Theories of Surplus Value) contains criticism of various economic theories. During K. Marx's lifetime, only the first volume was published (1867). “Dr. Marx - that is the name of my idol - is still a very young man (he is hardly more than 24 years old), who will deal the final blow to medieval religion and politics; the deepest philosophical seriousness is combined in him with the subtlest wit; imagine Rousseau, Voltaire, Holbach, Lessing and Hegel united in one person, I say united, not mixed, this will be Doctor Marx” (1841, from a letter from M. Hess, a philosopher who taught at the University of Berlin)

Marxism The main thing in Marxism is its openly class, revolutionary character. K. Marx consciously sided with the proletariat as an oppressed and exploited class and, with his economic theory, wanted to give the workers an ideological weapon in the fight against the capitalists. Marx supported his theory with organizational and practical actions, initiating the creation of such associations of advanced workers as the Union of Communists and the First International.

Marxism K. Marx developed the labor theory of value, creating the doctrine of the dual nature of labor that creates goods. He proved that the capitalist buys from the worker not labor, but labor power. The process of consumption of labor power by a capitalist is at the same time a process of simultaneous production of goods and surplus value. K. Marx studied in detail the essence and functions of money (in Volume I). This analysis of his is still considered one of the best in the history of economic science. The disclosure of the process of capital accumulation (in the seventh section of volume I) is the culmination of the teachings of K. Marx. Here he formulates the general law of capitalist accumulation: the accumulation of wealth at one pole, in the hands of the capitalists, is the accumulation of poverty and the intensification of the torment of labor at the other pole, on the side of the proletariat. Thus, the accumulation of capital itself leads to an exacerbation of the antagonistic contradictions of capitalism, they explode, the hour of capitalist private property strikes, and bourgeois society is replaced by the society of the victorious proletariat.

Marxism Studying in Volume II the course of the circulation and turnover of capital, as well as the processes of simple and expanded reproduction (in diagrams), K. Marx came to the conclusion about the cyclical nature of the development of capitalist production and the inevitability of crises of overproduction. In Volume III of Capital, K. Marx proved that all incomes of the non-proletarian classes (profit, rent, interest) are only transformed forms of surplus value, that is, they are of an exploitative nature..

Friedrich Engels (1820–1895) The second (1885) and third (1894) volumes of Capital existed only in manuscripts and sketches at the time of the author’s death. They were prepared for printing and published by F. Engels. Marx, Engels and Marx's daughters Jenny, Eleanor and Laura. Monument to Marx and Engels in Berlin

Classical
school
political
savings
Speaker
Leonova Anastasia Vitalievna
Faculty student
international relations, group
174702

England: late 17th century

Development
manufactories
Fast
industrial
climb
Banks,
joint stock
society,
exchanges
The era of the greats
inventions
New
sources
arrived
Industrial
capital
The class has grown
hired
workers

New Economic School

1) What constitutes the wealth of the people?
↓
2) Study of the production sector
↓
3) analysis of the sphere of circulation, but starting from new
positions, proposing new principles
pricing
↓
4) a new explanation of the nature of money

The main differences between the classical school of economic theory and mercantilism:

The main differences between the classical school
economic theory from
mercantilism:
Subject of economic analysis
becomes not the sphere of circulation, but the sphere
production
The difference between intrinsic value and
price of the goods
The basis of the classical school is labor
theory of value

The main position of the classical school

The wealth of society is not created in
circulation, and in all spheres of material
production. Merchants do not produce anything
product, but only deliver it to
various directions
William Petty

Basics of the labor theory of value:

The cost of the goods is “equal to the cost
amount of silver or gold that
at the same time another person can get,
transport it, mint it into a coin"
The source of value is specific labor
silver mining, the value of the product of labor
determined as a result of its exchange for
precious metals

Adam Smith

Division of labor
Money and its functions
Theory of value
The principle of the "invisible hand"
Basic Rules
taxation
Adam Smith

Division of labor

Specialization
↓
Multiple magnification
labor productivity

"The Great Wheel of Circulation"

Money is a special commodity, spontaneously
standing out from the mass of goods
Money is a tool that can
measure the value of goods

Theory of value

Labor costs for the production of goods
provide a basis for comparing them
cost.
The value of the goods is determined
not at the cost of individual labor
commodity producer, and average
costs for a given level of development
production.

The principle of the "invisible hand"

Minimal intervention in the economy
and market self-regulation
Economic liberalism
“...let everything go by itself,
naturally, without
coercion"

Basic tax rules:

Proportionality
Minimality
Certainty
Convenience for the payer

Basic principles of political economy

Research of the sphere of production (sphere
treatment-secondary)
Cost basis of prices
Cost category is the only one
original category of economic
analysis
Improving the well-being of the population
The role of money as a medium of exchange

Bibliography

World economic thought. Through the prism
centuries. In 5 volumes / ed. G.G. Fetisova, A.G.
Khudokormova. – M.: Mysl, 2005
Logacheva E. Economic theory. M, 2014
Economic theory course. Ed. 5 / ed.
M.N. Chepurina, E.A. Kiseleva – Kirov: 2005
Smith A. An Inquiry into Nature and Causes
wealth of nations. M., 2009
Electronic library of economics
literature: www.libertarium.ru.

Classical political economy
this is the direction in the development of economic thought,
based on the principles of non-interference by the state in
economic practice that originated during the period
approval of the market economy as
the dominant way of managing.

1. Gradual breakdown of feudal
relations (landlessness
peasants)
2. Bourgeois revolution at its head
with Oliver Cromwell (15991658) and what followed
turning England into
constitutional monarchy.
3. A compromise has been reached between
landowners and the bourgeoisie.
4. Decisive role in politics
economic
interests of the bourgeoisie.
Causes
classical
political economy in
England

English statistician and
economist, William Petty
(1623-1687)
These authors condemned
protectionist system
which held back freedom
entrepreneurship. by them
priority was emphasized
the meaning of liberal
principles of management in
creation of a national
wealth in the field
material production.
French economist Pierre de
Boisguillebert (1646-1714)

Stages of evolution of classical political economy
The first stage (from the end of the 17th century to the beginning of the second half of the 18th century) – justification of ideas
free trade and entrepreneurship: economic teachings of W. Petty and P.
Boisguillebert. Peculiarities of interpretation of the categories wealth, money, value,
income.
Wealth, according to W.
Petty, form not only
precious metals and stones,
including money, but also land,
houses, ships, all goods.
So wealth
is being created in the field
material production,
(not in circulation).
W. Petty didn't count the money
the wealth of the country and wrote,
that we should not accumulate them,
and put it into circulation.
The cost was determined
labor expended, and
namely, by labor,
spent on production
silver as money
material.

The second stage (the period of the last third of the 18th century) - A. Smith:
the formation of political economy as a science. Teachings of A. Smith and
his work "An Inquiry into the Nature and Causes of Wealth
peoples."
Economic teachings of Adam Smith (1723 -1790)
Key ideas:
1. The source of wealth is the product of the total labor of everyone
spheres of production, representatives of various types of labor
and professions (“the annual work of nations”).
2. The prerequisite for the growth of wealth is the division of labor.
3.Labor theory of value - “labor is
the only universal, as well as the only accurate
measure of value." Different types of work are equivalent.
4.The concept of the “invisible hand”
5. The state plays the role of a “night watchman”, and not
regulator of economic processes.
Prerequisites for the second stage:
The rapid development of capitalism due to
foreign trade, government
loans, development of colonies.
Creation of large centralized
manufactures and capitalist farms.
The process continues
landlessness among peasants, growing
number of hired workers.
England is turning into an industrial-agrarian country.

Disadvantages of A. Smith's teaching
1. I did not understand the essence of money as a universal equivalent, that money
act as a social form of wealth. Money only
medium of exchange, fleeting intermediary facilitating exchange
goods.
2.The price of the goods did not include the transferred cost. Considering
that capital accumulation is the transformation of profit into
additional salary, saw the benefit of workers in accumulation
capital.
3.Linked the concept of “productive” and “unproductive”
labor with the concept of capital.
4. “Productive” labor is paid from profits on capital,
“unproductive” labor does not create profit.

The third stage (first half of the 19th century) - the development of political economy in the works
economists D. Ricardo, J. B. Say, T. R. Malthus. Theories of value, capital,
income, reproduction. “Iron” law of wages D. Ricardo.
The teachings of J.B. Say. Theory of three factors of production, theory of income, value.
J.B. Say's law of markets, or the concept of crisis-free economic growth.
The teachings of T. R. Malthus. Population theory.
Distinguishes between
cost and
material
wealth. Premise
increasing wealth -
productivity growth
labor. Cost depends
not from abundance, but from
difficulty or ease
production.
The population is growing in
geometric
progression, and means
existence - in
arithmetic due to
law of diminishing
soil fertility
Overproduction
goods and economic
crises are impossible.

What Smith and Ricardo have in common:
1. There are three main classes in society
(landowners, entrepreneurs, workers) and
three types of income: rent, profit, wages
pay.
2. Supporters of the labor theory of value
3. Supporters of economic liberalism
David Ricardo (1772 -1823)

The fourth stage - the final stage of the classical direction (other half of the 19th century) was marked
the works of J.S. Mill and K. Marx. J.S. Mill (1806-1873) in his work “Principles of Political Economy”,
1848, systematized the economic ideas of the classical school and substantiated the requirements of the English
liberal bourgeoisie to social reformism.
J.S.Mill
1873)
(1806-
Karl Marx (1818-1883)

The main merit of A. Smith and D. Ricardo
Presented the processes
happening in the economy in
in the most general form as
sphere of interrelated laws and
categories.
From searching for external forces or
appeals to the authorities' reason
turned the analysis into the sphere of identifying
internal reasons underlying
basis of market functioning
economics

The most important features of the classical school:
1. The concept of economic man.
2.Equality of the contracting parties.
3.Full awareness
4. Fluidity of resources.
5.The growth of the working population closely depends on the total fund
wages.
6. Absolutization of profit as the goal of entrepreneurship.
7. High mobility of wage levels.
8. The main thing is capital accumulation.
9. Special attitude to land as a factor of production.
10. Unconditional economic liberalism.

Disadvantages of classical political economy
The disadvantages of classical political economy were the underestimation of the role of the state in
economics, in absolute terms of its provisions and conclusions.
Within the framework of this doctrine, the economic opposition of classes was formulated
bourgeois society, which allowed some Ricardian socialists (T. Godskin, W.
Thompson et al.) draw revolutionary conclusions. At the beginning of the 19th century. economic theory
characterized by the emergence of new directions and schools within both classical
political economy and proletarian political economy. During this period there was
industrial revolution based on new productive forces (steam engine, mass
production, machine tool industry, etc.), the industrial proletariat, trade unions appeared,
The first crises of overproduction occurred.

Slide 1

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STAGES OF DEVELOPMENT OF ECONOMIC SCIENCE When studying the development of economic science, one should highlight the main periods (stages): “ECONOMY” - THE PERIOD FROM ANCIENT TIMES TO THE MOMENT OF THE ORIGIN AND DEVELOPMENT OF CAPITALIST RELATIONS (16th - 17th CENTURY) POLITICAL ECONOMY - THE PERIOD OF FORMATION AND FORMATION OF ECONOMIC SOCIAL VIEWS AS A SEPARATE INDUSTRY KNOWLEDGE - SCIENCE (18th - 19th CENTURY) "ECONOMICS" - MODERN ECONOMIC SCIENCE, REPRESENTED BY VARIOUS SCHOOLS AND DIRECTIONS

Slide 3

“ECONOMY” comes from the ancient Greek words “oikos” (house), “nomos” (law). What should be understood as “housekeeping laws”. The origins of economic science should be sought in the teachings of thinkers of the ancient world, first of all, in the cradle of European and world civilization - Ancient Greece. The first attempts to theoretically comprehend the economic structure of society were made in the writings of Xenophon (430-335 BC), Plato (428-348 BC) and in the teachings of Aristotle (384-322 BC). Greece. Attica Peninsula. Athens. Raphael Santi "The School of Athens"

Slide 4

Aristotle (c.384 - c.322 BC) Made a great contribution to the development of economic science with his analysis of the forms of value, the duality of goods and the development of forms of trade. His reasoning about ways to acquire wealth and satisfy needs is interesting. Aristotle's main work is Politics. Antisthenes (Xenophon) (c.435 - c.360 BC) A representative of the wealthy Athenian aristocracy - in his treatise "Domostroy" he praised the virtues of agriculture and condemned crafts and trade. He entered the history of economic teachings as a scientist who first analyzed the division of labor, and when speaking about the value of goods, he considered value both in the sense of consumer value and in the sense of exchange value

Slide 5

Plato (c.428 – c.348 BC) The natural economic concept was also characteristic of Plato’s economic views. In his project on state structure, he assigned to the state the function of resolving the contradiction between the diversity of people's needs and the uniformity of their abilities. According to Plato, private property could only be owned by persons incapable of political activity, i.e. representatives of the third estate: farmers, artisans and traders. Philosophers who govern society and guardians should not have any property. Touching upon the issues of commodity production, Plato came to the understanding that in the process of exchange there is a reduction to “proportionality and uniformity” of disproportionate and diverse goods. The ancient period of development of economic views, which did not go beyond the scope of philosophical views themselves, can be considered a time for the development of general approaches to understanding economic processes as a whole. It is also necessary to note the appearance in ancient times of practical documents and recommendations for rational housekeeping. A large number of such texts appear in ancient Rome. It is worth noting the treatise of Marcus Porcius Cato “On Agriculture” (2nd century BC), or the work of Palladius “On Agriculture” (4th century AD)

Slide 6

ECONOMY OF THE MIDDLE AGES The feudal lords (church, aristocracy and nobility) own land as the main means of production, the economy is predominantly subsistence in nature. Personally dependent peasants make up the majority of the population employed in production. MEDIEVAL CITY The free population of cities is united along professional lines into corporations (guilds). Cities are fighting with feudal lords for independence. Associations of cities emerge, such as the Hanseatic League. Cities are centers of crafts and trade. The economic thought of the era of feudalism covers a wide range of problems, starting with the justification of the legality of ownership of feudal land, the eternity of the division of society into classes, and ending with increased attention to the problems of commodity-money relations. At the same time, as a rule, supporting the development of commodity-money relations, except for usury, the ideologists of that time sought to preserve the feudal system.

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Great geographical discoveries Development of trade As a result of the Great geographical discoveries, the world market begins to take shape, economic ties expand and revive. There is a need to increase and expand production. A significant increase in trade stimulates the development of production and the emergence of new forms of organizing production activities. The first manufactories appeared - enterprises using manual labor and division of labor within the production cycle. The importance of cities as centers of trade and production is increasing. The importance and volume of commodity-money relations increases significantly.

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MERCANTILISM Since capitalist relations began to take shape primarily in the sphere of trade, the first, early movement of economic thought in the 15th - 17th centuries. - mercantilism (from the Italian "mercante" - merchant, merchant) - consisted in knowledge of the laws of trade. According to this theory, the wealth of a society is expressed in the accumulation of money, especially gold and silver, through trade. Of all activities, priority was given to labor engaged in trade, especially international trade, since it contributed to the accumulation of wealth. Mercantilism was not yet an economic science. Its main provisions are the result not of theoretical analysis, but of a simple description of observed phenomena and partly their classification. Hans Holbein the Younger. Georg Giese, German merchant in London (1532) Early mercantilism Purpose of study - sources of wealth Subject of study - trade Late mercantilism Protectionism Balance of trade

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POLITICAL ECONOMY 1615 - Antoine de Montchretien (1575-1621) “Treatise on Political Economy” “The happiness of people: lies mainly in wealth, and wealth in work.” The founder of classical political economy is William Petty. His economic views were formed in the conditions of the rapid growth of capitalist relations in England. He is the author of a number of works: “Treatise on Taxes and Fees”, “A Word to the Wise”, “Political Arithmetic”, “Miscellaneous about Money”. Like many other researchers of economic processes, W. Petty was not a “pure” economist. He was a sailor, a doctor, and in his research he developed the idea of ​​a trade surplus. “The wealth of each country,” argued W. Petty, “lies mainly in the share that it has in foreign trade, ... and the production of such goods and the conduct of such trade, which contributes to the accumulation in the country of gold, silver, precious stones and etc. are more profitable than other types of production and trade." Paying tribute to mercantilism, he laid the foundations of the labor theory of value. Petty’s well-known formula “labor is the father and most active principle of wealth, land is its mother” can be considered one of the variants of his doctrine about the source of value. William Petty 1623 - 1687

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CLASSICAL POLITICAL ECONOMY Representatives of classical political economy in France in the 18th century. were François Quesnay and Anne Robert Jacques Turgot. They transferred the question of the origin of social wealth from the sphere of circulation to the sphere of production. At the same time, they limited the latter only to agriculture, believing that wealth was created only in this industry. F. Quesnay (1694-1774) A. Turgot (1727-1781). Therefore, this direction in the development of economic thought was called the school of physiocrats (the term is derived from the Greek words “nature” and “power”).

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CLASSICAL POLITICAL ECONOMY The outstanding English economist Adam Smith went down in history as the “Prophet of free competition”. His greatest merit can be considered that in the world of economics he discerned a natural self-regulating order discovered by Newton in the physical sublunary world. The main idea in the teachings of A. Smith is the idea of ​​liberalism, minimal government intervention in the economy, market self-regulation based on free prices that develop depending on supply and demand. The main work of his life, “An Inquiry into the Nature and Causes of the Wealth of Nations” (1776), had a tremendous influence on the subsequent century. Economic life, according to Smith, is subject to objective laws that do not depend on the will and conscious aspirations of people. The starting point of his entire study is the problem of the division of labor, which binds “egoistic individuals” into a single society. After examining this problem, he proceeds to expound on the origin and use of money. Smith made a significant contribution to the theory of value, to the doctrine of income, of productive and unproductive labor, of capital and reproduction, and of the economic policy of the state. Adam Smith (1723-1790)

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CLASSICAL POLITICAL ECONOMY Classical political economy is not a homogeneous, uniform teaching and contains a number of directions, the authors of which considered certain aspects of economic life from their own, original point of view. The classical school laid the foundations for the entire diversity of modern economic views. Jean Baptiste Say (1767-1832) began to develop another tradition of interpretation of value, laid down by A. Smith - the theory of factors of production. He was the first of the classics to clearly and unambiguously formulate the idea that the value of a commodity is equal to the sum of wages, profit and rent, i.e. the amount of income of the owners of production factors used in the manufacture of a given product. The most important contribution made by the classical scholar Thomas Robert Malthus (1766-1834) to economics was his development of the “theory of population,” in which he linked economic and demographic factors. Moreover, in his formulation of this question, the dependence turns out to be two-way: just as the economy affects changes in the population, so the size of the population affects the economy. J. Sismondi (1773-1842). For him, the whole interest of political economy from a theoretical point of view came down to explaining crises, and from a practical point of view - to finding measures to prevent them and improve the situation of workers. He thus becomes the head of a whole series of economists, whose activities did not stop throughout the 19th century. Not being socialists, but not blinded by the vices of the liberal regime, these writers were looking for a middle path in which, while correcting the abuses of freedom, they would not sacrifice their principles.

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CLASSICAL POLITICAL ECONOMY WORK (Work) Ford Madox Brown, England (1821-1893) Art Gallery, Manchester The formation and development of classical political economy occurred against the background of serious changes in the economic and social life of society. Traditional feudal relations were replaced by a new economy - a market economy, which in the initial stages of its development was characterized by deep social stratification of society. The abuses in factories in the first half of the 19th century have been described thousands of times: the exploitation of children of all ages in the most unhealthy and cruel conditions, the almost endless working hours of women and adult workers, starvation wages, ignorance, rudeness, disease and the vices that arise in such deplorable conditions. In England, doctors' reports, House of Commons questionnaires, speeches and revelations of Robert Owen aroused public indignation. The requirement to limit the labor of children in cotton spinning mills since 1819 is the first timid step in the field of labor legislation. J.B. Say, traveling through England in 1815, stated that the worker in England, despite the fact that he has a family, and despite efforts often worthy of the highest praise, can earn only three-quarters, and sometimes only half of his expenses.

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CLASSICAL POLITICAL ECONOMY The most prominent economist of the era of the industrial revolution in England was D. Ricardo. He formulated a series of economic laws that became part of the treasury of political economy. The central place in the teachings of D. Ricardo is occupied by the theories of value and money, wages and profits, land rent, the doctrine of capital and reproduction. David Ricardo (1772-1823). Paul Samuelson, in his economics textbook, rates David Ricardo as a key figure of the 19th century: "He was one of the lucky ones. Classical, neoclassical and post-Keynesian scholars all trace their ancestry to his circle. The same can be said of the Marxist socialists." . Summing up the results of the consideration of the classical school, it should be noted that the main object of research here is production as such, regardless of its sectoral characteristics, as well as the distribution of benefits. Its outstanding representatives put forward and substantiated a system of concepts and categories that represent a scientific reflection of many economic processes.

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MARXISM Karl Marx 1818 - 1883 Karl Marx was born in Trier (Germany) into the family of a lawyer. During the period of revolutionary events in Europe 1848 - 1849, he actively participated in the work of the international organization “Union of Communists” and, together with Engels, wrote its program “Manifesto of the Communist Party” (1848). In 1867, Marx’s main work, “Capital” (vol. 1) which provides an analysis of the development of capitalism and its historical limits; Marx did not complete work on the following volumes; Engels prepared them for publication (vol. 2, 1885; vol. 3, 1894). In the last years of his life, Marx actively participated in the formation of proletarian parties. Marx developed the principles of a materialist understanding of history (historical materialism), the theory of surplus value, studied the development of capitalism and put forward the position of the inevitability of its death and the transition to communism as a result of the proletarian revolution. Marx's ideas had a significant influence on social thought and the history of society in the late 19th and 20th centuries. Marx was the organizer and leader of the 1st International, founded on September 28, 1864 in London. The successor to the work of Marx and Engels was V.I. Lenin, who developed Marxist teaching in new historical conditions. The merit of the German philosopher and economist K. Marx lies not only in his development of an original doctrine - the theory of surplus value and the law of concentration (automatic expropriation), but also in the fact that his works became the starting point for modern radical political economy (XX century). In addition, his economic theory served in the 20th century as one of the components of the social ideology of socialist countries with a planned economy, thus contributing to fundamental changes in both the economic and general history of mankind in this century.

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MARGINALISM In the 1870s, economics underwent a “Marginalist Revolution,” which led to dramatic methodological and theoretical shifts. It is from this moment that we can consider the beginning of modern economic analysis. Among the most important elements of marginalism as a direction in economic science, the following should be highlighted: The use of marginal (i.e. incremental) values. The word “marginalism” itself comes from the Latin margo, which means edge, limit. Marginalists are the first to use the categories marginal utility and marginal productivity. Static. Marginalists lost interest in the “laws of motion” of capitalism, which were the concern of the classics. The focus of economic research after the Marginalist Revolution shifted to the study of the use of scarce resources to satisfy people's needs at a given time. Subjectivism, i.e. an approach in which all economic phenomena are studied and assessed from the point of view of an individual economic entity. It is not for nothing that marginalism is sometimes called a subjective school of economics. Currently, marginalism (mainly on the basis of the Lauzan school), due to the addition of components of the classical school, has been transformed into “NEOCLASICS (NEOCLASSICAL SCHOOL)”. The marginalist direction of economic thought is usually divided into two schools due to differences in methodology - Austrian and Lausanne. Austrian School Carl Menger 1841-1921 Friedrich von Wieser 1851-1926 Lausanne School Leon Walras 1834-1910 Vilfredo Pareto 1848-1923

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ECONOMIC SCIENCE from ancient times to the end of the 19th century Economy Aristotle, Antisthenes, Plato Mercantilism Atuan de Montchretien PHYSIOCRATS F. Quesnay, A Turgot Classical political economy Adam Smith, Jean B. Say, David Ricardo, Robert Malthus... Medieval thinkers Thomas Aquinas, William of Ockham Marxism K. Marx, F. Engels, V. Lenin Marginalism F. von Wieser, K. Menger, L. Walras...

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NEOCLASSICAL SCHOOL Currently, marginalism, due to the addition of components of the classical school, has been transformed into “NEOCLASICS (NEOCLASSICAL SCHOOL)”. Prominent representatives of which are: Alfred Marshall and Joseph Schumpeter. Alfred Marshall 1842-1924 A. Marshall. Main work: “Principles of Economic Science” (1890). The fact that the neoclassical school is a synthesis of the ideas of (early) marginalism and the classical school seems especially obvious when we turn to the works of the recognized founder of the neoclassical school, the English economist A. Marshall. "Principles of Economic Science" is written in the traditional manner of the classics - with long digressions, rich factual material, reasoning on social and moral topics. The subject of economic science, from the point of view of A. Marshall, is those incentives that guide a person in his economic activities. These motives are quantifiable: the strength of a particular incentive that forces a person to take some action is equal to the monetary payment required for the person to perform this action. Schumpeter Joseph Alois 1883-1950 Joseph Schumpeter, economist and sociologist. Born in Austria-Hungary, since 1932 in the USA. Essays on the problems of the economic cycle, the history of economic doctrines. He considered the history of political economy as a process of ascending development of the analytical apparatus and methods for studying economic phenomena. Author of the concept of economic dynamics, in which the central place is given to the entrepreneurial function. He proposed a dynamic concept of the cycle, where cyclicality is considered as a pattern of economic growth. The fundamental problem of any economic system, Schumpeter declared, is to achieve and maintain equilibrium. In the model, all firms are in a state of stable equilibrium, and revenues equal costs. Profit and interest are zero, prices are based on average costs, and economic resources are fully utilized. This model introduces a new production function corresponding to a new relationship between costs and output. The introduction of a new function is carried out by the Innovator, seeking to obtain greater profits than conventional methods can provide.

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MONETARISM Milton Friedman 1912- Monetarism is considered one of the directions of neoclassical economic thought. It originates in the mid-1950s in the USA. One of the recognized founders and leaders of monetarism is a representative of the so-called Chicago School, Milton Friedman. Initially, monetarism arose as a separate branch of experimental research in the field of monetary circulation, namely, as an analysis of the demand for money. It subsequently evolved, covering an increasingly wider range of economic issues. Ultimately, by the mid-1970s, it turned into a respectable doctrine, the recipes of which began to be used by the governments of many capitalist countries. In theoretical terms, monetarism, on the one hand, is based on certain provisions of the neoclassical synthesis (for example, the theory of property), and on the other, is a continuation of the pre-Keynesian neoclassical quantity theory of money. The main works of M. Friedman: “Research in the field of the quantitative theory of money” (1956); M. Friedman, A. Schwartz "Monetary history of the United States, 1867 - 1960" (1963). All goods acquired and stored by an economic entity can be represented in the form of its assets. Their combination forms a portfolio of assets. Money is an asset along with other goods. Assets are held by an individual either because they generate monetary income (financial assets: stocks, bonds), or because they have a certain utility as such (non-financial assets: for example, durable consumer goods, capital goods), or because that they provide convenience, liquidity and security (money). The individual's task is to allocate his available resources (wealth) in such a way as to maximize his utility. The new quantitative theory of money is interested, first of all, in the volume of funds stored in monetary (liquid) form, i.e., in other words, the demand for money. The demand for money is determined by three main groups of factors: a) the total wealth of the economic entity; b) the costs and benefits associated with various forms of storing wealth; c) the individual's preferences regarding various forms of storing wealth.

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KEYNESIANism In 1936, the book by the English economist J.M. Keynes, “The General Theory of Employment, Interest and Money,” was published. It is generally accepted that this book marked the beginning of the so-called “Keynesian Revolution,” which, along with the Marginalist Revolution, is the most significant event in the history of economic analysis over the past two centuries. However, modern research in the history of economic analysis has shown that the Polish economist M. Kalecki and a group of German economists called “German Keynesians” also played a significant role in the implementation of the Keynesian revolution. All of them anticipated some of the scientific discoveries of J.M. Keynes and therefore, along with him, can be considered as the creators of the Keynesian revolution. The Keynesian revolution can be interpreted in different ways; the revolution consisted of ensuring the isolation of an entire branch of economic science - macroeconomics - into an independent discipline. Thanks to the Keynesian revolution, the analysis of macroeconomic problems began to be carried out independently of studies of aspects of value, competition, consumer behavior, etc. On the other hand, the Keynesian Revolution was a reaction to the shortcomings of the neoclassical approach to the analysis of economic life. What arose during the Keynesian revolution was supposed to become both a methodological and theoretical alternative to the neoclassical school. The world economic crisis of the late 1920s - 1930s and especially the Great Depression of 1929 - 1933 experimentally proved the inconsistency of this approach and, probably, turned out to be the main "specific historical" cause of the Keynesian revolution. In the course of its implementation, the elements of aggregate demand, especially investment in fixed capital, were highlighted. Their variability has been shown to cause variability in real national income and employment levels. As a result, it was possible to demonstrate that a market economy is internally unstable, and its normal state is forced unemployment (i.e., if we use modern macroeconomic terminology, the normal state is the actual level of unemployment exceeding the natural one). Therefore, there is a need for active government intervention in the macroeconomic functioning of a market economy. Such intervention is best carried out through discretionary (macroeconomic) policies, i.e. policies that are implemented at the discretion of the government depending on the state of the economic situation.

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KEYNESIANism John Maynard Keynes 1883-1946 The basis of J. M. Keynes's approach to economic analysis is the idea of ​​"monetary economics", which was set out in writing in an obscure article in 1933 and, unfortunately, is not clearly formulated in his "General Theory" . In presenting this idea, J. M. Keynes sharply contrasted himself with both the classics and neoclassics (and he called both “classics”) in highlighting the essence and role of money. In his opinion, the object of study of the “classics” was the “real exchange economy.” This is an economy in which money “... is used only as a neutral link in transactions with real objects and real assets and does not influence the motives and decisions” of economic entities. In such an economy, money acts only as a unit of account and a means of exchange, not being a durable asset and not performing the function of a store of value, being only a “convenience”. The peculiarity of the approach of the “classics” was that they transferred the laws of the “real exchange economy” to the contemporary market economy. J.M. Keynes believed that such a transfer was unfounded and pointed out that it was more important to analyze a different type of economy, which he called a “monetary economy.” In such an economy, money is a durable asset and is used as a store of value. Mikhail Kaletsky 1899-1870 The main works of M. Kaletsky were published in the 1930-1950s in the form of scattered articles and were republished after the Second World War in the form of two somewhat overlapping collections: “The Theory of Economic Dynamics. An Essay on Cyclical and Long-Term Changes in capitalist economics" (1956); "Selected essays on the dynamics of the capitalist economy. 1933 - 1970" (1971). In a number of his works, some of which were published back in the 1930s, the Polish economist M. Kalecki, independently of J. M. Keynes, came to largely similar conclusions, and in some aspects his analysis turned out to be much deeper. Therefore, together with J.M. Keynes, M. Kalecki can be considered the founder of macroeconomics in general and in particular (and above all, post-Keynesian macroeconomic theory).

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INSTITUTIONALISM Institutionalism is a direction in economic thought that places the main emphasis on the analysis of institutions. Institutions “as a first approximation” should be understood as rules and principles of behavior (“rules of the game”) that people follow in their actions. The reservation “to a first approximation” is made due to the fact that in different movements of institutionalism this key term is interpreted somewhat differently. And in general, institutionalism is so heterogeneous that its study as a single whole is almost meaningless - the different currents in institutionalism itself differ so greatly. Neo-institutionalism (also called new institutionalism) in its most general form can be understood as an attempt to bring the institutional approach into the mainstream of modern economic analysis. Neo-institutional theory is an economic analysis of the role of institutions and their impact on the economy. The founder of old institutionalism (and institutionalism in general) is the Norwegian-American Thorsten Veblen. Thorsten Veblen 1857-1929 T. Veblen is best known for his sharp criticism against the neoclassical understanding of man as a rational optimizer. Man, according to T. Veblen, is not “a calculator that instantly calculates the pleasure and pain” associated with the acquisition of goods, i.e. benefits and costs of obtaining them. The behavior of an economic entity is determined not by optimizing calculations, but by instincts that determine the goals of activity, and institutions that determine the means of achieving these goals. Instincts are goals of conscious human behavior, formed in a certain cultural context and transmitted from generation to generation. The choice of means to achieve goals formed by culturally determined instincts is determined, as already noted, by institutions. Institutions, according to T. Veblen, are “a habitual way of thinking that tends to prolong its existence indefinitely.” In other words, institutions include various rules and stereotypes of behavior, some of which are enshrined in the form of legal norms and public institutions. CONCLUSION Modern economic science, thanks to the accumulated experience of development, is represented by various directions and schools. Very often, the research of economists includes the knowledge and methodology of other scientific disciplines: sociology, demography, social psychology, history, statistics, various practical experiences, etc. Despite differences in views, sometimes diametrically opposed, economic science at the present stage continues to develop dynamically. The variety of methodology and the use of different approaches to studying problems ultimately allows us to obtain the most objective picture of modern economic life, and also contributes to the search for options for effective influence and forecasting. The importance of economic science in the modern world is evidenced by the awarding of the Nobel Prize in Economics since 1969. Nobel Laureate Medal in Economics

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When preparing the presentation, materials and literature were used: I.V. Rozmainsky, K.A. Refrigerator. History of economic analysis in the West. St. Petersburg, 2000 Yadgarov A.S. History of Economic Thought. M. Infa - M 2000 Berezin I. Brief history of economic doctrines. M. 2000 http://www. economicus.ru http://www.ie.boom.ru http://www.ek-lit.agava.ru http://www. libertarium.ru http://www.sai.msu.su/cjackson/index.htm

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Classical school of economics (political economy) Third stage of development David Ricardo (1772-1823) A successful businessman. Banker. Thanks to successful speculation in funds and bread in the City of London, David already had a capital of several million by the age of 25. Work “Principles of Political Economy and Taxation” (1817)

He showed the greatest interest in issues of: - cost, - distribution, profit - comparative utility in foreign trade. Basic postulates: the value and price of a product are determined by different factors, the value of a product is not formed by all labor, but only by socially necessary labor, which was labor under the worst conditions of production. Ricardo’s money also has a value, which he defines in two ways: - the amount of labor spent on their production;

- derivative of their quantity in circulation; Ricardo's profit was proportional to the expenditure of capital on the purchase of labor, which created the surplus product - the basis of profit. Ricardo also considered labor to be a commodity, and its value was determined by wages. The “natural” cost of labor was determined by the minimum means for the reproduction of labor, and the market value consisted of the relationship between supply and demand in the labor market.

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Classical school of economics (political economy) Third stage of development David Ricardo (1772-1823)

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Classical school of economics (political economy) Further development of the classical school Socialization of economic thought

The further development of capitalism complicated the social structure of capitalist society. Economic thought immediately responded to this, incorporating representatives of all social strata who carefully worked through the economic heritage and found in it what best suited their interests and needs. Classical political economy contained so many of the latest theoretical research and so many contradictions that it gave birth to several directions in the economic theory of the 19th century, contradictory in content and united in origin.

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Classical school of economics (political economy)Further development of the classical school

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Defenders of the “unimpeachable” development of capitalism: J.B. Sey, T.R. Malthus, N.U. Senior, F. Bastia, G.C. Carey They have developed an effective method of defense against attacks from opposing factions. Any accusation of capitalism for socio-economic sins was completely rejected by theories appropriate to the case, or was explained by the still insufficient development of capitalism itself, or was explained by the guarantee of economic well-being in the future. Classical school of economics (political economy)Further development of the classical school

Classical school of economics (political economy) Defenders of the free development of capitalism Jean Baptiste Sey (1767-1832) a major French manufacturer who for a long time commented on and expounded the teachings of A. Smith Work “A Complete Course of Practical Political Economy” (1829) “The Law of Markets” is the central point in the teachings of J.B. Sow. Its essence: 1) the exchange of product for product automatically leads to equilibrium between purchase and sale. 2) aggregate demand and aggregate supply are always equalized: the cost of created goods = income, which is used to buy goods at cost. Conclusion: crises of overproduction in a market economy are impossible. The first one is true. Demand creates supply The second is wrong! The development of commodity exchange strengthens the contradiction between value and use value, leads to the allocation of money as a special kind of commodity, and not just an instrument of exchange, therefore, in a market monetary economy, overproduction is possible - an excess of supply over monetary demand

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Classical school of economics (political economy) Defenders of the free development of capitalism Jean Baptiste Sey (1767-1832) Law of value: -the sale of some goods has a positive impact on the sale of others. Successful trading in one industry provides funds for the purchase of other industries; -the more producers there are, the more extensive the sales of products; -with the support of consumers (regulation of wage levels), production develops, as effective demand increases.

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Classical school of economics (political economy) Defenders of the free development of capitalism Jean Baptiste Sey (1767-1832) Equal factors of value creation: land labor capital. Accordingly, three main sources are divided into three types of income: wages (for labor) and rent (payment for land). interest (payment for capital) Money is just an instrument of exchange, since people do not need money, but what they buy with it. Thus, the cost depends on: the utility of the product, the costs of producing the product, demand (direct relationship) supply (inverse relationship). Conclusion: Zh.B. Seay abandoned A. Smith's labor theory of value.

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Classical school of economics (political economy) Defenders of the free development of capitalism Thomas Robert Malthus (1766-1834) English priest and professor of political economy explained all the troubles of the human race: by the actions of “natural laws and human passions”, the stinginess of nature, the excessively rapid reproduction of the human tribe Objects of existence grow in arithmetic progression, and the population - geometrically. A surplus population is of necessity doomed to poverty, hunger and extinction. No reforms, no property revolutions will change this harsh natural pattern. Malthus denied the exclusive role of labor as a source of value, since the other main element was profit, which was passed off as a surplus over and above the labor spent on the production of goods.

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