Economic schools and their development

The emergence of society is associated with the realization of material and spiritual human needs. Satisfaction of needs is the main motive for people's participation in production relations and the foundation of economic development.

Value of needs

Human needs lead people to action. Needs exist in conjunction with the means by which they are satisfied. These "tools" are formed directly in the workflow. Work is an expedient activity. It manifests itself primarily in the ability of man to create objects and means for material production. In the formation of property, the central link is the appropriation of labor.

Economic interest

It arises on the basis of a system of diverse needs. Economic interests are the most important motive of labor activity. When improving production, the number of needs increases. They, in turn, contribute to the further development of the economy. The formation of needs, among other things, depends on subjective factors. They include, first of all, the tastes and inclinations of a person, the spiritual needs of the individual, physiological and psychological characteristics, as well as folk customs and habits. In this regard, the conditions under which a person is forced to establish the value of services or goods are formed.

Production activities

It is carried out with the help of an economic system. The latter is a specific social and organizational mechanism. Due to the limited resources available, it is impossible to meet the needs of all members of society. Nevertheless, civilization aspires to this goal as an ideal. This causes mankind to develop a variety of means that would allow this task to be realized. Economic theory is one of such means.

Source elements

The first signs of economic thinking are found in the writings of thinkers of Ancient Egypt and in the ancient Indian treatises. Valuable commandments concerning management are also present in the Bible. As a scientific direction, economic theory began to form more clearly in the works of ancient Greek philosophers. The first ideas are formulated by Xenophon, Aristotle, Plato. It was they who introduced the term "economy", referring to them the doctrine of the creation and management of a household in slave-owning conditions. This direction was based on elements of natural labor activity and the market.

Development of economic schools

The works of ancient Greek thinkers became the foundation for the further formation of the doctrine. It was later divided into several directions. As a result, the following major economic schools were formed:

• Mercantilism.
• Marxism.
• Physiocrats.
• Classical economical school.
• Keynesianism.
• Neoclassical school.
• Monetarism.
• Marginalism and the historical school.
• Institutionalism.
• Neoclassical synthesis.
• Left-wing school.
• Neoliberalism.
• School theory of the economy of supply.

General characteristic of the traditional direction

The main economic schools were formed under the influence of different views of different scientists. An outstanding role in the development of traditional teaching was played by such figures as F. Quesnay, U. Petit, A. Smith, D. Ricardo, D. S. Mil, Jean-Baptiste Say. With a difference of views, they were united by several common ideas, on the basis of which a classical economic school was formed. First of all, all the authors mentioned were supporters of economic liberalism. Its essence is often expressed by the phrase laissez faire, which literally means "leave doing." The principle of this political demand was formulated by the Physiocrats. The idea was to provide complete economic freedom of the individual and competition, unlimited state intervention. Both of these economic schools regarded man as an "economic subject." The desire of the individual to multiply his wealth contributes to an increase in the whole of society. The automatic mechanism of self-adjustment ("invisible hand", as Smith called it) is directed at the disparate actions of consumers and producers so that a long-term equilibrium is established throughout the system. At the same time, the continued existence of underproduction in it, re-production and unemployment becomes impossible. The authors of these ideas made a significant contribution to the formation of the school of economic science. Later they were used and improved. Many economic schools have contributed to these ideas. As a result, systems were formed that corresponded to one or another stage in the formation of society. So there was, for example, a socio-economic school.

The idea of Smith

On the basis of the school of economic theory, which advocated this figure, the concept of working value was developed. Smith and his followers believed that the formation of capital is realized not only through agriculture. In this process, the labor of other sections of the population, the whole nation as a whole, is of particular importance. Supporters of this school of economic theory argued that, participating in the production process, workers of all levels enter into cooperation, cooperate, which in turn excludes any distinction between productive and "fruitless" activities. Such interaction is most effective when it is implemented in the form of market commodity exchange.

Economic Schools: Mercantilism and Physiocrats

These teachings, as described above, existed in the 18-19 centuries. These economic schools had different views on the production of social wealth. Thus, mercantilism adhered to the idea that trade is the basis. To increase the volume of public wealth, the government should in all ways support domestic sellers and manufacturers, hindering the activities of foreign ones. Physiocrats believed that the economic basis is agriculture. Society they divided into three classes: owners, producers and infertile. Within the framework of this exercise, tables were formulated, which, in turn, became the foundation for the formation of a model of interindustry equilibrium.

Other directions 18-19 centuries

Marginalism is an Austrian school, adhering to the idea of marginal utility. The leading figure in this direction was Karl Menger. Representatives of this school explained the concept of "value" from the perspective of consumer psychology. They tried to base the exchange not on production costs, but on a subjective evaluation of the utility of the goods being sold and purchased. The neoclassical school, represented by Alfred Marshall, developed the concept of functional relationships. The supporter of the mathematical direction was Leon Walras. He characterized the market economy as a structure that is able to achieve equilibrium through the interaction of supply and demand. He developed the concept of the overall market balance.

Keynesianism and institutionalists

Keynes based his ideas on the evaluation of the entire economic system as a whole. In his opinion, the structure of the market is not initially balanced. In this regard, he advocated strict state regulation of trade. Supporters of institutionalism, Earhart and Galbraith, believed that the analysis of an economic entity is impossible without taking into account the formation of the environment. They proposed a comprehensive study of the economic system in the dynamics of evolution.

Marxism

This trend was based on the theory of surplus value and the principle of planned formation of the national economy. The leading figure in the exercise was Karl Marx. His work subsequently developed in the writings of Plekhanov, Engels, Lenin and other followers. Some of the propositions advanced by Marx were revised by the "revisionists." They included, in particular, such figures as Bernstein, Sombart, Tugan-Baranovsky and others. In the Soviet years, Marxism acted as the basis of economic education and the only legal scientific direction.

Modern Russia: HSE

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