History of Economic Thought

LECTURE № 2. History of Economic Thought

The Economic theory studies the historyofeconomicthought, political economy, microeconomics, macroeconomics, international economy, world economics (international business), international economical relations, game theory, entrepreneurship, management, marketing and other economic discipline.

Labyrinth of economic thought. Repeatedly quite differently evaluated the role of government in industrial development, the importance of trade, the market to increase researchers interprets differently the same thing: what, say, wealth and in what ways it is produced?
The economy - as a subject of study over time varies substantially.
Mercantilism (from mercante-trader, a merchant) - the first school of economic theory, which originated in England, France, Italy and other countries in the initial period of formation of capitalism. This school has attempted to determine the shape of the wealth of society and ways to increase the basis of the features of the era, when the rapidly expanding international trade. French mercantilist Antuan de Montchretien in 1615 gave the name of economic theory justifying the policy of the state - political economy (the Greek politick-statecraft), is the science of management of the state economy as a science - political economy, which reveals the role of the state an increase in national wealth.

Classical political economy

Classical political economy, which has proved in scientific in own failure of mercantilism. Classical political economy theory, exploring all areas of the economy - manufacturing, distribution, exchange and consumption of material goods and services.
Physiocrats-(Greek physics-nature kratos-power, authority) - the school of political economy, which originated in France in the middle of the XVIII century. And spread to Italy, Britain, Germany and other countries. Founder and head of the Physiocrats in France was Francois Quesnay (1694-1774)

English classical political economy
Emerged and developed in XVII-XVIII centuries. The founders of this theoretical school were William Petty (1623-1687), Adam Smith (1723-1790) and David Ricardo (1772-1823), who created his theory of the growth of national wealth.
For the first time the idea that labor is a major source of wealth expressed B. Petty, who was named by Columbus of political economy. He belongs to the famous formula: Mother Nature, the work the father of wealth. Enormous contribution to the classical theory of the direction of Adam Smith made that transformed the political economy of a scientific system, after which she began teaching in higher education. In the main work - "Study on the Nature and Causes of the Wealth of Nations (1776) - he proved
"Natural order" in economic life. Foundations of this order were found dominance of private property, free competition and free trade, laissez-faire in economic activity.

Economic Doctrine of Karl Marx (1818-1883)

Karl Marx in his main economic work "Capital", to which he devoted 40 years and not had time to complete, largely on new developed classical theory of value and the theory of surplus value. American economist W. Leontief, writes that if someone wants to know what was in effect a profit, salary, and capitalist enterprise, it can get a three-volume "Das Kapital" is more realistic and qualitative information.

Neo-classical direction

Emerged in the last third of the XIX century. as opposed to the school of English classics. First of all within was the result of marginalistical (Fr. Marginal-limit) revolution. This revolution gave rise to the theory of marginal utility and the theory of marginal productivity of labor and capital.
The classic line of political economy have not studied holistic doctrine of market-based system of farming. This gap in their own way made up for the Austrian school of economics. She founded a professor of the University of Vienna, Karl Menger (1840-1921), Eugene Bohm-Bawerk (1851-1914) and Friedrich von Wieser (1851-1926). They put forward a subjective, psychological concept of value and price of goods, which opposed the labor theory of value. Marginalist revolution continued the founder of the American political economy, John Bates Clark (1847-1938). The concept of marginal utility of consumption goods, he added the theory of marginal productivity of capital and labor, directly contrasted his theory of the classical doctrine of surplus value and exploitation of the working class under capitalism.

Introduction to the theory of limiting values resulted in a mathematical school in economics (English scientist William Jevons, a Swiss economist, M. E. L. Walras, Pareto Italian explorer). That limits are allowed to apply advanced mathematics, operating with such values. With the help of mathematical methods to open many of the functional (quantitative) mathematical relations in production, consumption and market, which allowed to find the best options for the productive use of production capacity with limited resources.

3. Lecture. Subject and method of economic theory

Subject of economic theory

Economics is the science of public opinion, which explores the connections and relations between human beings and human behavior in society.
In contrast to the sociology and philoso