History of Economic Thought

The history of economics is quite long and rich. People have always been interested in processes that directly or indirectly influenced their prosperity.

The subject of the history of economic doctrines is the stages of the formation of the economy, its development and transformation on a large time interval. She also examines in detail the main directions of economic thought, which dominated in this or that period.

Unfortunately, this article can not fit the whole history of economic doctrines. It seems only possible to indicate the key stages in the development of schools and directions from ancient times to the end of the 19th century.

The history of economic doctrines begins with the attempts of Aristotle and Plato to somehow systematize the information known to them in this field. Aristotle made a particularly valuable contribution. He was the first to call the economy a science, he studied economic activity, he developed the theory of price, money and value.

The origin of the term "economy" is due to Xenophon, a historian and writer from ancient Greece. The name consists of two words, which in aggregate have the meaning of "law on the conduct of the economy."

The history of economic doctrines connects with the division of exchange and labor in society the formation of the economy as one whole on the scale of the state. This indicates the emergence of the need for knowledge about the economy of the country as a whole. In the early 17th century, A. Montchretien published a treatise on political economy, proved that the main purpose of production is trade, and gave the final name to the young science. This economist, as well as Jean Baptiste Colbert, Thomas Man, IT Pososhkov - representatives of mercantilism, the main direction of economic thought of the time. At the heart of the prosperity of the nation, they saw the accumulation of precious metals.

In the same years, there was an opposite viewpoint, expressed by the followers of the school of physiocrats. They believed that only the work of village workers on the land could bring in incomes, which far exceed costs. All other activities are only engaged in the processing of products, without producing anything new.

And, of course, the history of economic doctrines is not conceivable without such classics of science as Adam Smith, Jean-Baptiste Say, David Ricardo. On many issues, they had differences, but there were a number of prerequisites that united them. So, all of them argued that the state should not interfere in economic processes and provide the individual with economic freedom, allowing them to compete freely. The aspiration of a person (as a subject primarily economic) to multiply his wealth necessarily entails and augmenting the riches of the whole society as a whole. Adam Smith called the self-adjusting economic mechanism an "invisible hand". It, thus, directs actions of manufacturers of production and its consumers so that the economic balance is observed. In such a system, unemployment can not last for a long time, a surplus of goods can be produced or its deficit can be felt. Followers of Adam Smith and he himself believed that not only agriculture creates the wealth of the nation, but also the labor of the other classes.

The fact that the market economy is exploitative, created the doctrine of Karl Marx. It was based on the value of labor and believed that the wealth of the people was the work of mercenaries. Without paying for the labor of ordinary workers, the capitalists receive huge profits, thereby society is polarized into two classes: the rich and the poor. And within such a capitalist system, the revolution of the proletariat necessarily ripens. In practice, the theory of the German economist was not confirmed.

In the late 19th century, Alfred Marshall became the founder of the neo-classical direction. He proved that the welfare of producers and consumers will reach its maximum only when economic entities will be able to compete freely.