School
Classical economics
Overview
Classical economics, also known as the classical school of economics or classical political economy, is a school of thought in political economy that flourished primarily in Britain in the late 18th and early-to-mid 19th century. It includes both the Smithian and Ricardian schools. Its main thinkers are held to be Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, and John Stuart Mill. These economists produced a theory of market economies as largely self-regulating systems, governed by natural laws of production and exchange (famously captured by Adam Smith's metaphor of the invisible hand).
Adam Smith's The Wealth of Nations in 1776 is usually considered to mark the beginning of classical economics. The fundamental message in Smith's book was that the wealth of any nation was determined not by the gold in the monarch's coffers, but by its national income. This income was in turn based on the labor of its inhabitants, organized efficiently by the division of labour and the use of accumulated capital, which became one of classical economics' central concepts.
In terms of economic policy, the classical economists were pragmatic liberals, advocating the freedom of the market, though they saw a role for the state in providing for the common good. Smith acknowledged that there were areas where the market is not the best way to serve the common interest, and he took it as a given that the greater proportion of the costs supporting the common good should be borne by those best able to afford them. He warned repeatedly of the dangers of monopoly, and stressed the importance of competition. In terms of international trade, the classical economists were advocates of free trade, which distinguishes them from their mercantilist predecessors, who advocated protectionism.
The designation of Smith, Ricardo and some earlier economists as "classical" is due to a canonization which stems from Karl Marx's critique of political economy, where he critiqued those that he at least perceived as worthy of dealing with, as opposed to their "vulgar" successors. There is some debate about what is covered by the term classical economics, particularly when dealing with the period from 1830 to 1875, and how classical economics relates to neoclassical economics.
Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).
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Of this nature is the fallacy in what is called, by Adam Smith and others, the Mercantile Theory in Political Economy. That theory sets out from the common maxim, that whatever brings in money enriches; or that every one is rich in proportion to the quantity of money he obtains. From this it is concluded that the value of any branch of trade, or of the trade of the country altogether, consists in the balance of…
John Stuart Mill, A System of Logic, Ratiocinative and Inductive
States what Classical economics is; the author is tied to Classical economics in the knowledge graph.
They appeared as immediate forerunners of the famous Report of the Bullion Committee of 1810, in which Ricardo’s views were adopted.[133] The singular circumstance, that Ricardo and his adherents, who held money to be merely a token of value, are called bullionists, is due not only to the name of that committee, but also to the nature of their theory. In his work on political economy, Ricardo repeated and developed…
Karl Marx, A Contribution to the Critique of Political Economy
States what Classical economics is; the author is tied to Classical economics in the knowledge graph.
If, therefore, Political Economy be a science, it cannot be a collection of practical rules; though, unless it be altogether a useless science, practical rules must be capable of being founded upon it. The science of mechanics, a branch of natural philosophy, lays down the laws of motion, and the properties of what are called the mechanical powers. The art of practical mechanics teaches how we may avail ourselves of…
John Stuart Mill, Essays on some unsettled Questions of Political Economy
States what Classical economics is; the author is tied to Classical economics in the knowledge graph.
Philosophers who discussed Classical economics
- Frédéric Bastiat
- John Stuart Mill
- Adam Smith
- Thomas Sowell
- Henry Sidgwick
- Friedrich Engels
- Nicholas Georgescu-Roegen
- Louis Althusser
- Antoine Destutt de Tracy
- Eugen Dühring
Related ideas
- Feudalism
- International trade
- Industrial Revolution
- John Stuart Mill
- Karl Marx
- James Mill
- Labor theory of value
- Capital (economics)
- Adam Smith
- Milton Friedman
- Mercantilism
- Neoclassical economics
- School of thought
- Invisible hand
- Thomas Robert Malthus
- The General Theory of Employment, Interest and Money
- Say's law
- John Maynard Keynes
- Marxian economics
- Political economy
- François Quesnay
- Jean-Baptiste Say
- Market economy
- Piero Sraffa
Place in the tradition
Part of Liberalism.