The term political economy

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:40

The market mechanism is a complex and very dynamic structure that depends on a huge number of factors: the inflation rate, the balance of supply and demand, the activity of its participants, government regulation and, of course, the state of the economy as a whole. At the same time, it is the last element that plays one of the most important roles in the he althy development of the entire society.

The formation of the modern economy was influenced by a large number of schools and teachings. Institutional, neoclassical, Marxist, Keynesian, mercantilist and other trends have made a huge contribution to what is now called the economy and market relations. The theories and reflections of ancient philosophers spurred medieval thinkers to strive to find answers to all questions relating to the relationship between the buyer, seller and state.

So, Montchretien, the founder of the school of mercantilism, first introduced such a concept as political economy. Part of this term appeared during the life of Xenophon. It was the ancient Greek writerand the politician introduced the word "economy", which meant "the laws of housekeeping." Mercantilists began to consider this concept in a more global sense - in relation not only to the family, but also in the context of the state. That is why Montchretien introduced the term "political economy" in his treatise. Literally translated, it means "public or state management of farms."

Gradually, this expression began to acquire more and more meaning and expand the boundaries of its meaning. And, as a result, political economy has grown into a separate science. Such scientists and thinkers of the classical school as Smith, Ricardo, Quesnay, Boisguilleberg, Turgot, Petit and others began to analyze not only the sphere of circulation, but also the sphere of production directly. This is what made it possible to consider the internal laws of the functioning of a complex market mechanism and gave rise to such a new science as political economy.

Thanks to the representatives of the classical school, the labor theory of value began.

This can be seen especially clearly in the writings of David Ricardo, who was the first to take it as the basics for analyzing the differences between wages and profits, as well as between profit and rent. At the same time, the theory of the classical school was aimed at expressing the interests of the bourgeois strata of the population. It was precisely when the formation of capitalism and capitalist modes of production took place, and was gaining itsthe still completely undeveloped class struggle of the proletariat. Then the representatives of this school began to fiercely support the separation of feudal atavism.

It was the English classical political economy that formed the basis of one of the Marxist teachings. However, not only the socialist school is based on the teachings of Ricardo and Quesnay - in the 30s of the 19th century in Great Britain and France, a science that was changed and contradicted the theory of the classics was being developed. She renounces the theory of labor value that has already become customary and names its completely different sources - land, labor and capital. Scientists such as Say, M althus and Bastiat do not consider the laws of development of production, but rely solely on economic phenomena. This theory has been called "vulgar political economy".