Scientific schools of economic theory. Main economic schools Theory of cyclical economic development of capitalism

Interest in economic problems arose in the ancient societies of Mesopotamia, India, China, Egypt, Greece, and Rome. Ancient societies' ideas about economic structure were an integral part of various religious or philosophical systems. Already in the Bible one can find the rules of the economic life of ancient society, the concepts of justice, property, and the principles of distribution of the produced product. We can read about what value is and what it depends on in the works of the ancient Greek philosopher Aristotle. At the same time, economics as a science took shape relatively late, at the turn of the 17th and 18th centuries. This happened during the period when capitalism arose and rapidly developed in Europe.

Economics initially developed under the name Political Economy. This term was first introduced in 1615 by the Frenchman Antoine de Montchretien. The name "political economy" comes from the Greek words: "politikos" - state, public; "oikos" - household, house; "nomos" - rule, law. At the end of the 19th - beginning of the 20th century. this name is increasingly being replaced by the term “economic theory” (Economics). This name was first introduced in 1890 by the famous English economist Alfred Marshall. During the four centuries of its existence, economic science has developed rapidly. During this time, many schools and directions of economic theory appeared (Table 1).

Table 1

Main economic schools

The most important schools	Development period	Largest representatives	Major works
Mercantilism	16th - 18th centuries	Thomas Mann (1571-1641)	"England's Wealth in Foreign Trade" (1664)
Physiocrats	18th century	Francois Quesnay (1694-1774)	"Ecological Table" (1758)
Classical political economy	office 18 - beginning 19th century	Adam Smith (1723-1790)	"Inquiries into the Nature and Causes of the Wealth of Nations" (1776)
Marxism	2nd half 19th - 20th centuries.	Karl Marx (1818-1883)	Capital (1867)
Neoclassical economic theory	Con. 19th - 20th centuries.	Alfred Marshall (1842-1924)	"Principles of Economic Theory" (1890)
Keynesianism	20 – beginning 21st century	John Maynard Keynes (1883-1946)	"The General Theory of Employment, Interest and Money" (1936)
Institutionalism	20 – beginning 21st century	John Kenneth Galbraith (b. 1908)	"The New Industrial Society" (1961)
Monetarism	20 – beginning 21st century	Milton Friedman (b. 1912)	"Capitalism and Freedom" (1962)

The first school of economic theory (political economy) was mercantilism. The word "mercantilism" comes from the Italian "mercante" - merchant, merchant. This line of economic thought was widespread in Western and Eastern Europe in the 16th-18th centuries. The ideas of mercantilism were also known in Russia; Peter I pursued an active mercantilist economic policy.

One of the most famous representatives of mercantilism was the English economist Thomas Mann (1571-1641). Like all mercantilists, he was a practical man, a man of action, was a member of the board of the East India Company, a member of the government trade committee. Thomas Man outlined the main ideas in his main work, “The Wealth of England in Foreign Trade, or the Balance of Our Foreign Trade as the Principle of Our Wealth” (published in 1664).

The main object of observation of mercantilists was foreign trade, the movement of goods and money between countries. In their opinion, the most important source of the country's wealth was foreign trade. They identified wealth itself with gold and treasures. In order for wealth to flow into a country, there must be a constant excess of exports over imports, in other words, a trade surplus is necessary. The state must regulate foreign trade in order to ensure the flow of gold and silver into the country, and pursue a policy of protecting its foreign trade interests, that is, a policy of protectionism. In particular, set high customs duties on imported goods and stimulate the export of local products.

In the mid-18th century, another well-known economic school emerged in France - the school of physiocrats. “Physiocracy” literally means “power of nature” (from the Greek “physics” - nature and “kratos” - strength, power). This was a group of scientists, the most famous of whom was François Quesnay (1694-1774). A physician by training and profession, he served as court physician under Louis XV. Only at the age of 60 did he begin to deal with economic problems. F. Quesnay became world famous thanks to his most important work, “The Economic Table” (1758).

The doctrine of the physiocrats arose as a reaction to mercantilism. Criticizing the mercantilists, they believed that the government should pay attention not to trade and accumulation of money, but, above all, to the development of agriculture. They saw the source of wealth in agriculture. Only labor in agriculture is productive labor. The “net income” arising from agriculture was considered by them as a gift from nature. At that time, in France, agriculture was the main sphere of the national economy. At the same time, the physiocrats considered industry an unproductive sector.

In his work "Economic Table" Francois Quesnay laid the foundations of the theory of social reproduction. He tried to establish proportions between various parts of the social product and examined the exchange between social classes. Essentially, this was the first macroeconomic model.

The industrial revolution at the end of the 18th and beginning of the 19th centuries led to the creation of the material and technical base of capitalism and the development of machine production. Industry became the dominant sector of the economy. The economic thought of this period sees the main source of wealth in production in general, and not only in agriculture, as the physiocrats imagined. The new direction in economic thought was subsequently called classical political economy. Classical political economy, formed in the late 18th century, was the dominant school of economics for most of the 19th century.

The most famous and prominent representatives of this trend were the Scottish scientist Adam Smith (1723-1790) and the Englishman David Ricardo (1772-1823). A. Smith headed the department of moral philosophy at the University of Glasgow, then worked as the chief commissioner of customs for Scotland. He was the author of many works on economics and philosophy. But his main world-famous work was “An Inquiry into the Nature and Causes of the Wealth of Nations” (1776). In this work, A. Smith gives a comprehensive description of the economic system of society, examines the theory of value, the theory of income distribution, the theory of capital and its accumulation, the economic policy of the state, public finance, and gives a detailed critique of mercantilism. He managed in his book to combine most of the existing areas of economic research. The basis of all economic phenomena considered by A. Smith is the labor theory of value. The value of a product is created by labor, regardless of the industry of production. The labor contained in goods is the basis for exchange. The price of a product is determined by the labor costs for its production, as well as the relationship between supply and demand for the product. A. Smith gave a detailed analysis of the main incomes of society - profit, wages and land rent - and determined the value of the social product as the sum of society's income. The social product embodies the wealth of the country. The growth of wealth depends on the growth of labor productivity and on the share of the population engaged in productive work. In turn, labor productivity largely depends on the division of labor and its specialization.
When considering economic phenomena and processes, the classics of political economy adhered to a certain system of general premises. The main ones were the concept of “economic man” and economic liberalism (economic freedom). They considered a person only from the point of view of economic activity, where the only incentive for behavior is the desire for one’s own benefit. Morality, culture, religion, customs, politics are not taken into account. The idea of economic liberalism was based on the idea that economic laws act like the laws of nature. As a result of their action, “natural harmony” is spontaneously established in society. There is no need for the state to interfere with economic laws. The principle of economic liberalism and free trade is expressed by the famous slogan “laissez faire, laissez passer” (Approximate translation into Russian: “Let people do their own things, let things take their own course.”) In other words, this is the principle of non-interference by the state in economic activities. The expression has become a symbol of classical economic theory. In foreign trade, economic liberalism means free trade, without restrictions on exports and imports. This foreign economic policy is called free trade (from the English free trade). According to the classics, economic laws and competition act as an "invisible hand." As a result, resources are redistributed for efficient (full) use, prices for goods and resources change rapidly, and a balance is established between supply and demand. At the same time, the development of capitalism has led to periodic economic crises, overproduction of goods, and unemployment. The incomes of the rich increased, but the bulk of the population lived in poverty. All this did not fit into the framework of classical economic theory and required explanation. And on the basis of the classical theory, new schools arise, revising the conclusions of the classics. The most famous economic school, which emerged in the mid-19th century and became widespread in the second half of the 19th and 20th centuries, was Marxism.

This branch of economic theory was named after its founder, Karl Marx (1818-1883). He was born in Germany, the son of a lawyer, studied at the Universities of Bonn and Berlin, and had a Ph.D. Karl Marx lived most of his life in exile, in Paris and London. His main work was Capital, volume I of which was published in 1867. Volumes II and III of Capital were prepared for publication by F. Engels (1885, 1894), who was a friend of K. Marx and a famous theorist of Marxism.

In his economic teachings, K. Marx relied on the works of the classics of political economy. At the same time, he criticized classical economic theory and largely supplemented and developed the theoretical positions of A. Smith and D. Ricardo. K. Marx created a comprehensive system of categories and laws of the capitalist economic system. Unlike the classics, he showed the transitory nature of this system, revealed the internal contradictions of capitalism, and argued for the inevitability of replacing capitalism with socialism and communism. Many provisions of Marxism have been and are being criticized, but few deny the historical role of Marxism in the development of economic theory. Marxist economic theory emphasizes the determining role of socio-economic relations in the economic system. Therefore, the direct subject of research is production relations - the relationships that develop between people regarding the production, distribution, exchange and consumption of goods. The basis of production relations is the relationship of ownership of the means of production. The organization of production, distribution, and the wealth of different social classes depend on property relations.
K. Marx developed the labor theory of value. What was new in the theory of value was the discovery of the dual nature of labor embodied in goods. According to Marx, concrete labor creates the use value of a commodity, and abstract labor creates value, and the latter underlies the price of a commodity. Abstract labor is labor in the physiological sense, labor as the expenditure of physical and mental energy in general.

On the basis of the labor theory of value, Marx created the theory of surplus value, which explains the main source of profit and shows the mechanism of exploitation of hired workers by the owners of capital. The source of profit is surplus value, that is, the value created by the unpaid labor of workers. He also examined the laws of capitalist social reproduction, in particular, he explained the origin of cyclical economic crises. The ultimate cause of these crises is the spontaneous nature of development, due to the dominance of private ownership of the means of production. But he made a real revolution in his research method. K. Marx applied the dialectical method in the analysis of economic processes, thereby creating the method of materialist dialectics.

In the second half of the 19th century, along with Marxism, neoclassical economic theory emerged and developed. Of all its many representatives, the most famous was the English scientist Alfred Marshall (1842-1924). He was Professor and Head of the Department of Political Economy at Cambridge University. A. Marshall summarized the results of new economic research in the fundamental work “Principles of Economic Theory” (1890).

In his works, A. Marshall relied on both the ideas of classical theory and the ideas of marginalism. Marginalism (from the English marginal - limit, extreme) is a trend in economic theory that arose in the second half of the 19th century. Marginalist economists in their studies used marginal values, such as marginal utility (the utility of the last, additional unit of good), marginal productivity (products produced by the last hired worker). These concepts were used by them in the theory of price, the theory of wages and in explaining many other economic processes and phenomena.

In his theory of price, A. Marshall relies on the concepts of supply and demand. The price of a good is determined by the relationship between supply and demand. The demand for a good is based on subjective assessments of the marginal utility of the good by consumers (buyers). The supply of a good is based on production costs. The manufacturer cannot sell at a price that does not cover its production costs. If classical economic theory considered price formation from the position of the producer, then neoclassical theory considers pricing both from the position of the consumer (demand) and from the position of the producer (supply). Neoclassical economic theory, like the classics, is based on the principle of economic liberalism, the principle of free competition. But in their research, neoclassicists place greater emphasis on the study of applied practical problems, using quantitative analysis and mathematics to a greater extent than qualitative (substantive, cause-and-effect). The greatest attention is paid to the problems of efficient use of limited resources at the microeconomic level, at the enterprise and household levels. Neoclassical economic theory is one of the foundations of many areas of modern economic thought.

Modern economic theory is a combination of different economic schools and directions widespread in the world at the turn of the 20th - 21st centuries. Conventionally, three leading trends in modern economic theory can be distinguished: Keynesianism, institutionalism, and monetarism. Keynesianism as a direction of economic theory arose in the 30s of the 20th century, during the period of the Great Depression - the global economic crisis of 1929-1933. and the long depression that followed. The name of this direction is associated with the name of John Maynard Keynes (1883-1946), the famous English economist, statesman and publicist. He was a graduate of Cambridge University, a student of A. Marshall and A. Pigou. J.M. Keynes's main work, The General Theory of Employment, Interest and Money, was first published in 1936.

Essentially, J.M. Keynes was the founder of modern macroeconomics. The new macroeconomic school criticizes classical and neoclassical economic theory for its ignorance of the problems of crises, unemployment and inflation. Moreover, Keynesians abandon such premises of the previous theory as the separate existence of markets for goods, labor and money, mandatory equality of savings and investments, price flexibility, and the principle of laissez faire, that is, the principle of non-intervention by the state in the economy.

A market economy, Keynes argues, cannot be self-regulating; it cannot provide “effective demand” sufficient to fully utilize the resources available in society. In order to stimulate aggregate demand, and therefore production, government regulation of the economy is necessary through fiscal and monetary policies. For example, during an economic downturn, the government must increase government spending and reduce taxes. For several decades of the 20th century, from the late 30s to the mid-70s, Keynesianism was the dominant school of thought in both theory and economic policy in developed Western countries.

Along with Keynesianism, one of the most widespread schools of modern economic thought is institutionalism. As a movement, institutionalism arose at the turn of the 19th and 20th centuries. in the USA, and has since spread throughout the world. A more precise name for institutionalism is the institutional-sociological school.
A feature of institutionalism as a current of economic thought is the use of the concepts “institution” (custom, established order) and “institution” (order enshrined in the form of law, institution) for the analysis of economic phenomena and processes. Institutions that are part of the economy and influence economic behavior are the family, the state, moral standards, law, trade unions, corporations, and other social phenomena. Institutionalism does not consider in theory an “economic man”, but a versatile personality. Just like Keynesianism, institutionalists reject the premise that a market economy is capable of self-regulation. Within the framework of this direction, concepts of the modern economic system as a “post-industrial”, “information” society are being developed.

One of the most famous modern institutionalists is the American economist John Kenneth Galbraith (b. 1909). Harvard professor, statesman, ambassador to India, Galbraith is also known for his economic works, each of which was a bestseller not only in academic circles, but also among the educated part of the public in general. One of his most important works is “The New Industrial Society” (1961). In a modern market economy, a “new industrial society”, in Galbraith’s terminology, large corporations that produce complex equipment dominate. And in corporations, the real power is not the owners, but the “technostructure”. Technostructure is this layer of specialists in technology, management, finance, scientists, designers. The technostructure plans the work of the corporation for years to come. And planning, in turn, requires stability. When planning, production and sales are carried out according to plan, and the role of entrepreneurship, competition, and market forces is reduced to a minimum, if not completely eliminated. At the same time, business goals change. The technostructure has little interest in maximizing profits; it is interested in the company developing steadily and having a strong position in the market. Institutionalism is in many ways close to Keynesianism.

Monetarism, as one of the most important trends in modern economic thought, is the enemy and main opponent of both Keynesianism and institutionalism. The name of the direction comes from the Latin “coin” - monetary unit, money. Monetarism originated in the USA and began to spread in the 50-60s of the 20th century. Its main ideologist is Milton Friedman (b. 1912), a professor at the University of Chicago, a former adviser to the American president on economic issues. He outlined his economic views in several works, the most famous of which is Capitalism and Freedom (1962).

The most important feature of monetarism as an economic school is that its supporters pay main attention to the monetary factor, the amount of money in circulation. The slogan of the monetarists is: “Money matters.” In their opinion, the money supply has a decisive influence on economic development; the growth of national income depends on the growth rate of the money supply. Monetarism continues the traditions of the classical and neoclassical schools of economics. In their theory, they rely on such classics as economic liberalism, minimal government intervention in the economy, the need for free competition, and price flexibility when demand and supply change. The influence of monetarism in the world intensified in the 70s and 80s, when inflation and budget deficits became the main problems of the economy. Monetarists associate the emergence of these problems with the theory and practice of Keynesianism and with government regulation of the economy.

Questions for self-control:

1. Why is economic theory a developing science?

2. What are the historical background for the emergence of economic theory?
3. Who are the mercantilists and physiocrats? What did they see as the source of material wealth?

5. Name the representatives of the classical school. What is their contribution to the development of economic science?

6. Name the most prominent representatives of marginalism and formulate the essence of their theory.

7. Formulate the main meaning of modern neoclassical and Keynesian theory. What are their main differences?

History of the development of economic theory

The history of the emergence and development of economic science is very interesting; it is replete with numerous dramatic events, scientific revolutions and periods of calm. Interest in economic problems arose in the ancient societies of Mesopotamia, India, China, Egypt, Greece, and Rome. Ancient societies' ideas about economic structure were an integral part of various religious or philosophical systems. Already in the Bible you will find the rules of economic life of ancient society, the concepts of justice, property, principles of distribution of the produced product. You can read about what value is and what it depends on in the works of the ancient Greek philosopher Aristotle. At the same time, the science of economics took shape relatively late, somewhere at the turn of the 17th and 18th centuries. This happened during the period when capitalism arose and rapidly developed in Europe.

Economics initially developed under the name Political Economy. This term was first introduced in 1615 by the Frenchman Antoine de Montchretien. The name "political economy" comes from the Greek words "politikos", which means state, public, "oikos" - household, house, "nomos" - rule, law. At the end of the 19th and beginning of the 20th century, this name was increasingly replaced by the term “economic theory” (Economics). This name was first introduced in 1890 by the famous English economist Alfred Marshall. During the four centuries of its existence, economic science has developed rapidly. During this time, many schools and directions of economic theory appeared. We will give a brief summary of the history of the development of economic thought, highlighting only some of the most important schools of economic theory. This story is summarized in the table.

The most important schools	Development period	Largest representatives	Major works
Mercantilism		Thomas Mann (1571-1641)	"England's Wealth in Foreign Trade" (1664)
Physiocrats		Francois Quesnay (1694-1774)	"Ecological Table" (1758)
Classical political economy	end 18 - first half. 19th century	Adam Smith (1723-1790)	"Inquiries into the Nature and Causes of the Wealth of Nations" (1776)
Marxism	2nd half 19th - 20th centuries.	Karl Marx (1818-1883)	Capital (1867)
Neoclassical economic theory	end of 19th - 20th centuries.	Alfred Marshall (1842-1924)	"Principles of Economic Theory" (1890)
Keynesianism	20 - early 21st centuries.	John Maynard Keynes (1883-1946)	"The General Theory of Employment, Interest and Money" (1936)
Institutionalism	20 - early 21st centuries.	John Kenneth Galbraith (b. 1908)	"The New Industrial Society" (1961)
Monetarism	20 - early 21st centuries.	Milton Friedman (b. 1912)	"Capitalism and Freedom" (1962)

The first school of economic theory (political economy) was mercantilism. Word "mercantilism" comes from the Italian "mercante" - merchant, merchant. This line of economic thought was widespread in Western and Eastern Europe in the 16th-18th centuries. The ideas of mercantilism were also known in Russia; Peter I pursued an active mercantilist economic policy.

The formation of the economic views of mercantilists took place during the era of the creation of the world market, the emergence and development of capitalism in Europe. Great geographical discoveries had already ended, colonial wars were going on, colonial empires were flourishing. The development of world trade led to the strengthening of the role of the merchants. And mercantilism became the spokesman for the interests of this layer of society.
One of the most famous representatives of mercantilism was the English economist Thomas Mann (1571-1641). Like all mercantilists, he was a practical man, a man of action, was a member of the board of the East India Company, a member of the government trade committee. Thomas Man outlined the main ideas in his main work, “The Wealth of England in Foreign Trade, or the Balance of Our Foreign Trade as the Principle of Our Wealth” (published in 1664).
The main object of observation of mercantilists was foreign trade, the movement of goods and money between countries. In their opinion, the most important source of the country's wealth was foreign trade. They identified wealth itself with gold and treasures. In order for wealth to flow into a country, there must be a constant excess of exports over imports, in other words, a trade surplus is necessary. The state must regulate foreign trade in order to ensure the flow of gold and silver into the country, pursue a policy of protecting its foreign trade interests, that is, a policy protectionism. In particular, set high customs duties on imported goods and stimulate the export of local products.

In the mid-18th century, another well-known economic school emerged in France - the school of physiocrats. "Physiocracy" literally means “power of nature” (from the Greek “physis” - nature and “kratos” - strength, power). This was a group of scientists, the most famous of whom was François Quesnay (1694-1774). A physician by training and profession, he served as court physician under Louis XV. Only at the age of 60 did he begin to deal with economic problems. F. Quesnay became world famous thanks to his most important work, “The Economic Table” (1758).
The doctrine of the physiocrats arose as a reaction to mercantilism. Criticizing the mercantilists, they believed that the government should pay attention not to trade and accumulation of money, but, above all, to the development of agriculture. They saw the source of wealth in agriculture. Only labor in agriculture is productive labor. The “net income” arising from agriculture was considered by them as a gift from nature. At that time, in France, agriculture was the main sphere of the national economy. At the same time, the physiocrats considered industry an unproductive sector. In his work "Economic Table", Francois Quesnay laid the foundations of the theory of social reproduction. He tried to establish proportions between various parts of the social product and examined the exchange between social classes. Essentially, this was the first macroeconomic model.

The basis of all economic phenomena considered by A. Smith is the labor theory of value. The value of a product is created by labor, regardless of the industry of production. The labor contained in goods is the basis for exchange. The price of a product is determined by the labor costs for its production, as well as the relationship between supply and demand for the product.

A. Smith gave a detailed analysis of the main incomes of society - profit, wages and land rent - and determined the value of the social product as the sum of society's income. The social product embodies the wealth of the country. The growth of wealth depends on the growth of labor productivity and on the share of the population engaged in productive work. In turn, labor productivity largely depends on the division of labor and its specialization.
When considering economic phenomena and processes, the classics of political economy adhered to a certain system of general premises. The main ones were the concept of "economic man" and economic liberalism(economic freedom). They considered a person only from the point of view of economic activity, where the only incentive for behavior is the desire for one’s own benefit. Morality, culture, religion, customs, politics are not taken into account.

The idea of economic liberalism was based on the idea that economic laws act like the laws of nature. As a result of their action, “natural harmony” is spontaneously established in society. There is no need for the state to interfere with economic laws. The principle of economic liberalism and free trade is expressed by the famous slogan “laissez faire, laissez passer” (Approximate translation into Russian: “Let people do their own things, let things take their own course.”) In other words, this is the principle of non-interference by the state in economic activities. The expression has become a symbol of classical economic theory. In foreign trade, economic liberalism means free trade, without restrictions on exports and imports. This foreign economic policy is called free trade(from English free trade - free trade).

According to the classics, economic laws and competition act as an "invisible hand." As a result, resources are redistributed for efficient (full) use, prices for goods and resources change rapidly, and a balance is established between supply and demand. At the same time, the development of capitalism has led to periodic economic crises, overproduction of goods, and unemployment. The incomes of the rich increased, but the bulk of the population lived in poverty. All this did not fit into the framework of classical economic theory and required explanation. And on the basis of the classical theory, new schools arise, revising the conclusions of the classics. The most famous economic school, which arose in the mid-19th century and became widespread in the second half of the 19th and 20th centuries, there was Marxism.

In his economic teachings, K. Marx relied on the works of the classics of political economy. At the same time, he criticized classical economic theory and largely supplemented and developed the theoretical positions of A. Smith and D. Ricardo. K. Marx created a comprehensive system of categories and laws of the capitalist economic system. Unlike the classics, he showed the transitory nature of this system, revealed the internal contradictions of capitalism, and argued for the inevitability of replacing capitalism with socialism and communism. Many provisions of Marxism have been and are being criticized, but few deny the historical role of Marxism in the development of economic theory.
Marxist economic theory emphasizes the determining role of socio-economic relations in the economic system. Therefore, the direct subject of research is production relations - the relationships that develop between people regarding the production, distribution, exchange and consumption of goods. The basis of production relations is the relationship of ownership of the means of production. The organization of production, distribution, and the wealth of different social classes depend on property relations.

K. Marx developed labor theory of value. What was new in the theory of value was the discovery of the dual nature of labor embodied in goods. According to Marx, concrete labor creates the use value of a commodity, and abstract labor creates value, and the latter underlies the price of a commodity. Abstract labor is labor in the physiological sense, labor as the expenditure of physical and mental energy in general.

Based on the labor theory of value, Marx created the theory surplus value, which explains the main source of profit and shows the mechanism of exploitation of hired workers by capital owners. The source of profit is surplus value, that is, the value created by the unpaid labor of workers. He also examined the laws of capitalist social reproduction, in particular, he explained the origin of cyclical economic crises. The ultimate cause of these crises is the spontaneous nature of development, due to the dominance of private ownership of the means of production. But he made a real revolution in his research method. K. Marx applied the dialectical method in the analysis of economic processes, thereby creating the method of materialist dialectics.

IN about the second half of the 19th century, along with Marxism, emerges and develops neoclassical economics. Of all its many representatives, the most famous was the English scientist Alfred Marshall (1842-1924). He was Professor and Head of the Department of Political Economy at Cambridge University. A. Marshall summarized the results of new economic research in the fundamental work “Principles of Economic Theory” (1890).

In his works, A. Marshall relied on both the ideas of classical theory and the ideas of marginalism. Marginalism(from English marginal - limit, extreme) is a movement in economic theory that arose in the second half of the 19th century. Marginalist economists in their studies used marginal values, such as marginal utility (the utility of the last, additional unit of good), marginal productivity (products produced by the last hired worker).

These concepts were used by them in the theory of price, the theory of wages and in explaining many other economic processes and phenomena.
In his theory of price, A. Marshall relies on the concepts of supply and demand. The price of a good is determined by the relationship between supply and demand. The demand for a good is based on subjective assessments of the marginal utility of the good by consumers (buyers). The supply of a good is based on production costs. The manufacturer cannot sell at a price that does not cover its production costs. If classical economic theory considered price formation from the position of the producer, then neoclassical theory considers pricing both from the position of the consumer (demand) and from the position of the producer (supply).

Neoclassical economic theory, like the classics, is based on the principle of economic liberalism, the principle of free competition. But in their research, neoclassicists place greater emphasis on the study of applied practical problems, using quantitative analysis and mathematics to a greater extent than qualitative (substantive, cause-and-effect). The greatest attention is paid to the problems of efficient use of limited resources at the microeconomic level, at the enterprise and household levels. Neoclassical economic theory is one of the foundations of many areas of modern economic thought.

Keynesianism as a direction of economic theory arose in the 30s of the 20th century, during the period of the Great Depression - the global economic crisis of 1929-1933. and the long depression that followed. The name of this direction is associated with the name of John Maynard Keynes (1883-1946), the famous English economist, statesman and publicist. He was a graduate of Cambridge University, a student of A. Marshall and A. Pigou. J.M. Keynes's main work, The General Theory of Employment, Interest and Money, was first published in 1936.

Keynes and his followers focused on the analysis of macroeconomic problems. They study the most important macroeconomic indicators and the relationships between them, in particular, the relationship between investment and national income, between government spending and the volume of national production, between inflation and unemployment.
Essentially JM Keynes was the founder of modern macroeconomics.
The new macroeconomic school criticizes classical and neoclassical economic theory for its ignorance of the problems of crises, unemployment and inflation. Moreover, Keynesians abandon such prerequisites of the previous theory as the separate existence of markets for goods, labor and money, mandatory equality of savings and investments, price flexibility, and the principle of laissez faire, that is, the principle of non-interference by the state in the economy.

A market economy, Keynes argues, cannot be self-regulating; it cannot provide “effective demand” sufficient to fully utilize the resources available in society. In order to stimulate aggregate demand, and therefore production, government regulation of the economy is necessary through fiscal and monetary policies. For example, during an economic downturn, the government must increase government spending and reduce taxes. For several decades of the 20th century, from the late 1930s to the mid-1970s, Keynesianism was the dominant school of thought in both theory and economic policy in developed Western countries.

Along with Keynesianism, one of the most widespread schools of modern economic thought is institutionalism. As a direction, institutionalism arose at the turn of the 19th and 20th centuries. in the USA, and has since spread throughout the world. A more precise name for institutionalism is the institutional-sociological school.

A feature of institutionalism as a current of economic thought is the use of the concepts “institution” (custom, established order) and “institution” (order enshrined in the form of law, institution) for the analysis of economic phenomena and processes. Institutions that are part of the economy and influence economic behavior are the family, the state, moral standards, law, trade unions, corporations, and other social phenomena. Institutionalism does not consider in theory an “economic man”, but a versatile personality. Just like Keynesianism, institutionalists reject the premise that a market economy is capable of self-regulation. Within the framework of this direction, concepts of the modern economic system as a “post-industrial”, “information” society are being developed.
One of the most famous modern institutionalists is the American economist John Kenneth Galbraith (b. 1909). Harvard professor, statesman, ambassador to India, Galbraith is also known for his economic works, each of which was a bestseller not only in academic circles, but also among the educated part of the public in general. One of his most important works is “The New Industrial Society” (1961).

In a modern market economy, a “new industrial society”, in Galbraith’s terminology, large corporations that produce complex equipment dominate. And in corporations, the real power is not the owners, but the “technostructure”. Technostructure- this layer of specialists in technology, management, finance, scientists, designers. The technostructure plans the work of the corporation for years to come. And planning, in turn, requires stability.
When planning, production and sales are carried out according to plan, and the role of entrepreneurship, competition, and market forces is reduced to a minimum, if not completely eliminated. At the same time, business goals change. The technostructure has little interest in maximizing profits; it is interested in the company developing steadily and having a strong position in the market. Institutionalism is in many ways close to Keynesianism.

Monetarism, as one of the most important directions of modern economic thought, is the enemy and main opponent of both Keynesianism and institutionalism. The name of the direction comes from the Latin “coin” - monetary unit, money. Monetarism originated in the USA and began to spread in the 50-60s of the 20th century. Its main ideologist is Milton Friedman (b. 1912), a professor at the University of Chicago, a former adviser to the American president on economic issues. He outlined his economic views in several works, the most famous of which is Capitalism and Freedom (1962).

Monetarism continues the traditions of the classical and neoclassical schools of economics. In their theory, they rely on such classics as economic liberalism, minimal government intervention in the economy, the need for free competition, and price flexibility when demand and supply change. The influence of monetarism in the world intensified in the 70s and 80s, when inflation and budget deficits became the main problems of the economy. Monetarists associate the emergence of these problems with the theory and practice of Keynesianism and with government regulation of the economy.

Conclusion

The brief description of the development of economic theory given in this essay is, of course, not exhaustive. But this brief introduction to the history of economic thought introduces us more closely to economic problems and gives us a very general idea of some terms and concepts that will be useful in further acquaintance with economic theory.

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Economic theories that were formed at the end of the 19th and beginning of the 20th centuries are considered modern. They are represented by a wide variety of positions, views, and concepts.

Let us highlight the main directions of modern economic thought and characterize them in the most general terms. These include

1) neoclassical;

2) Keynesian;

3) institutional-sociological.

Neoclassical the direction arose as a reaction to the economic teachings of K. Marx, his critical understanding. It dominated until the 30s of the 20th century. and praised free competition. The crisis and the Great Depression showed the inability of free competition to overcome contradictions and solve all socio-economic problems. As a result, a new economic doctrine appears - Keynesianism, which requires serious intervention in the state's economy. When, in the 70s and 80s, excessive government intervention in the economy began to slow down the development of social production, neoclassical teaching again acquired relevance and retains it to this day. In Western economic literature, this direction is called “new classical economics.”

The neoclassical direction of economic science is represented by the modern theories of monetarism and neoliberalism.

Monetarism- a theory based on the idea of the decisive influence of the money supply on prices, inflation and the course of economic processes. Monetarists reduce economic management primarily to state control over the money supply, the issue of money, the amount of money in circulation and in reserves, achieving a balanced state budget and establishing high bank interest rates.

American scientist Milton Friedman (born in 1912) is one of the largest authorities in modern economic science, the recognized head of the “new monetarist school”, winner of the Nobel Prize in Economics for 1976. His economic advice was used in Chile during the reign of Pinochet and in the economic policy pursued by R. Reagan in the USA. On the cover of M. Friedman’s book “Freedom of Choice,” Reagan wrote: “It should be read by everyone who is interested in the future of America.” According to M. Friedman, all major economic shocks are explained by the consequences of monetary policy, and not by the instability of the market economy, so the state should interfere as little and carefully as possible in market relations.

Neoliberalism- a trend according to which it is necessary to reduce (minimize) government intervention in the economy (a principle laid down by A. Smith), because private enterprise can lead the economy out of the crisis and ensure its recovery and the well-being of the population. Hence, it is important to provide the maximum possible freedom to entrepreneurs and traders in economic activities. Among modern economists, the representative of this direction is

Friedrich A. von Hayek (1899-1984), who was born in Germany and worked in England. He became a preacher of the market economy of the 20th century, winner of the Nobel Prize in Economics for 1974. In the book “The Road to Serfdom” Hayek proves that the refusal of economic freedom and market pricing leads to dictatorship, to economic slavery, and asserts the superiority of the market economic system over a mixed and “command” economy, emphasizes that socialist ideas of a state economy are doomed to complete failure.

Direction of economic theory, whose founder is an Englishman John Maynard Keynes(1883-1946), theoretically justifies state regulation of a developed market economy by increasing or decreasing demand through changes in the cash and non-cash money supply. In his opinion, with the help of such regulation it is possible to influence inflation, employment, eliminate uneven demand and supply of goods, and suppress economic crises. J.M. Keynes comes from a scientific background; his father was an economist. Keynesian ideas influenced the development of economics and politics for several decades in the first half of the 20th century. worldwide. Keynes's influence on public opinion turned out to be the strongest after A. Smith and K. Marx. His main work, “The General Theory of Employment, Interest and Money” (1936), sets out his theory and program of state regulation of the economy. He was declared the "savior of capitalism" and his theory was hailed as the "Keynesian revolution in political economy." At the same time, Keynes borrowed a number of theoretical positions from the classical political economy of A. Smith and D. Ricardo, as well as from the economic theory of Marxism (in particular, from the Marxist theory of reproduction).

The third direction of modern foreign economic thought is institutional-sociological, whose representatives are T. Veblen, J. Commons, W. Mitchell, J. Galbraith. Its supporters view the economy as a system where relations between economic entities are formed under the influence of economic and non-economic factors, among which technical and economic factors play an exceptional role. By institutions they mean corporations, trade unions, and the state. In this direction of economic theory, the disadvantages of capitalist society are noted: the dominance of monopolies and the costs of free market elements, the growing militarization of the economy, certain vices of the “consumer society” (for example, lack of spirituality), etc. The American economist Thorstein Veblen (1857-1929) became famous throughout the world for his book "The Theory of the Leisure Class" (1899), in which he refuted the attempts of political economists to simplify reality and the belief that human behavior can be described mathematically, using equations. He believed that only temporary stability was possible in society. As a result of the revolution, the rich will freely improve their situation, while the poor will continue to suffer deprivation. Due to the fact that consumption in modern society becomes a means of increasing status, the quantity of goods at high prices will increase more quickly than at low prices. Entrepreneurs' thirst for profit pushes them to unprincipled actions: attempts to eliminate competition and limit the production of goods. His attacks on capitalism created almost personal hostility towards him. During his lifetime, the roads to academic honors and prestige in the scientific world were closed to him. Veblen was doomed to spiritual loneliness and death in poverty, but his theories remain relevant today.

In this direction, the problem of transformation, transformation of modern society occupies an important place. Proponents of institutionalism believe that scientific and technological progress leads to overcoming social contradictions, to a conflict-free social evolution of society from industrial to post-industrial, super-industrial or “neo-industrial (i.e., information)” society. Absolutization of the role of technical and economic factors made it possible to put forward the theory of convergence (J. Galbraith, P. Sorokin - USA, R. Aron - France, J. Tinbergen - the Netherlands).

Neoclassical economic theory arose in the 1870s. Representatives: Carl Menger, Friedrich von Wieser, Eugen von Böhm-Bawerk (Austrian school), W. S. Jevons and L. Walras (mathematical school), J. B. Clark (American school), Irving Fisher, A. Marshall and A. Pigou (Cambridge School). Neoclassical direction explores the behavior of the so-called an economic person (consumer, entrepreneur, employee) who seeks to maximize income and minimize costs. The main categories of analysis are marginal values (see Marginalism). Economists neoclassical direction developed the theory of marginal utility and the theory of marginal productivity, the theory of general economic equilibrium, according to which the mechanism of free competition and market pricing ensures a fair distribution of income and full use of economic resources, an economic theory of welfare, the principles of which form the basis of the modern theory of public finance (P. Samuelson) , theory of rational expectations, etc.
Supporters neoclassical direction unites the idea that a market economy will function best if each of its subjects is given maximum economic freedom. IN In this sense, neoclassicists are direct followers of A. Smith.

The bifurcation of economic science into paradigms,

defending the benefits of entrepreneurs and proletarians

XIX century - “golden age” of economic science. It became a generally recognized ideology of society, they began to teach it in all higher educational institutions, and began to write textbooks for teaching the younger generations. Many generally recognized professionals in economics have emerged.

The first course in political economy was taught in 1801 by D. Stewart, a student and friend of A. Smith. In the 19th century economic education became a compulsory course in all universities, and the first professionals in political economy - teachers - emerged.

In the 19th century In general, the concept of the classical school of economics dominated. It was taught in institutes.

Classical political economy was a step in the theorization of economic science, that is, a transition to a monistic understanding of economics. As a result, pluralism and the number of economic schools decreased. Economic science emerged as a unified ideology for the economic development of society.

Classical political economy led to an increase in the importance of economic science in society.

Its postulates:

1. A person is considered exclusively as an “economic man” who has only one desire - for his own benefit, for improving his situation. Morality, culture, customs, etc. are not taken into account.
2. All market subjects and transactions are free and equal before the law. They must be far-sighted and prudent. No one is to blame for their mistakes or failures.
3. Each subject is fully aware of prices, profits, wages and rents in any market, both now and in the future.
4. The market ensures complete mobility of resources: labor and capital move freely to the right place.
5. The elasticity of the number of workers in terms of wages is not less than one. In other words, an increase in wages leads to an increase in the size of the labor force, and a fall, on the contrary, leads to a decrease in workers.
6. The only goal of a capitalist is profit.
7. The main factor in the growth of wealth is the accumulation of capital.
8. There is a free market, and the government generally does not interfere in the economy. The main regulator of the market is the “invisible hand” according to A. Smith. It ensures optimal resource allocation.

In the 19th century capitalism was formed in the main countries of Europe and developed successfully. It became the dominant system. Its basis was the wage labor of proletarians. The contradictions between entrepreneurs and proletarians grew, and it became obvious that he did not achieve his main slogan “Liberty, equality and fraternity.” The economic differentiation of people has led to the opposite of their interests. The principle “The rich get richer and the poor get poorer” began to apply. All this was a social order for economic science, in which the processes of divergence of paradigms that meet the interests of different classes of society began.

The main divergence of economic sciences is the formation of its two modern paradigms: entrepreneurial and proletarian. And their main difference is the theorization of economic science: some economists tried to continue this historical trend of classical economics, while others considered this approach to be verbiage and began to look for other directions for its development.

All subsequent economic schools were based on the ideas of classical political economy. And today it is the generally recognized spiritual heritage of all economists. But after it, economic schools began to diverge. The classics took different ideas as a basis, and as a result, different directions of economic thought arose - a variety of modern economic schools.

When analyzing modern economic schools, one will have to refer not only to the ideas of classical political economy, but also to the ideas of their opponents.

When analyzing modern economic schools, you need to know modern theory. When studying IEM, first-year students do not know economic theory, and therefore they simply have to assert certain thoughts.

The first stage is the era of mercantelism. Representatives of this school are A. Montchretien, T. Men, J. Stewart. Their main ideas boiled down to the fact that the wealth of society is exclusively precious metals or metallic money, and the source of increasing wealth is foreign trade.

The second stage - the era of the physiocrats. Their teaching arose in France in the middle of the 18th century. The founders of this school were F. Quesnay, A. Turgot, V. Mirabeau. They transferred their analysis of economic processes from the sphere of circulation to the sphere of material production, primarily to agriculture.

The third stage is the period of the classical school of bourgeois political economy. Its founders are the English economists W. Petty, A. Smith, D. Ricardo. The main thing in their doctrine is that the wealth of nations is the value which underlies wages, profit and land rent.

The fourth stage is the development of Marxist political economy. Its founders are K. Marx and F. Engels. Marxist political economy provided answers to many economic questions that had already been posed by predecessors and to a certain extent developed, in particular: about the labor theory of value, about the law of surplus value, the doctrine of economic formations and social methods of production, about the dialectical unity of productive forces and production relationships, etc.

Development of economic theory in Russia.

Among the first Russian economists was I. T. Pososhkov , peasant entrepreneur, inventor and thinker during the reign of Peter I.

M. V. Lomonosov made a certain contribution to the development of economic thought.
Important economic ideas were put forward by thinkers and writers. A. N. Radishchev advocated the establishment of private ownership of land by peasants.
N.I. Turgenev expressed ideas about free trade, taxes, and published the work “Experience in the Theory of Taxes” (1818), which laid the foundation for Russian financial science.

G. V. Plekhanov, a prominent economist in Russia in the 19th century, translated a number of works by K. Marx and F. Engels into Russian.

V.I. Lenin, a follower of Marxist political economy, developed the ideas of “Capital” in relation to the era of imperialism.

M. I. Tugan-Baranovsky, an economist, studied crises and Russian industry.

N.I. In his economic research, Bukharin devoted much attention to the theory of marginal utility, the theory of value, including objective and subjective value, as well as the theory of profit, its formation and distribution in various societies.

N.D. Kondratiev, a Russian economist, first formulated the theory of large cycles: “Large Cycles of Conjuncture” (1928). In the economic literature, large cycles are called “Kondratieff cycles.”

Modern directions and theories

Marginalism. The subject of research in this area was the limit values in economic processes.
Keynesianism. The subject of research in this area is the quantitative functional dependencies of the reproduction process

Basic ideas of Keynesianism:

-the market economy does not have a constantly functioning self-regulation mechanism.
-the determining direction of state regulation of the economy is to stimulate demand;
-effective savings are determined by the size of investments.

Neoclassical synthesis. Basic principles of neoclassical synthesis:

-optimal combination of market mechanism and government regulation. The market determines prices and production volumes, and the state regulates economic processes through taxes and government spending;
-combination of higher macroeconomic goals (economic efficiency, stability of economic growth, social justice);
-balance of aggregate demand and aggregate supply.

Monetarism. Basic ideas of monetarism:

-defense of the concept of complete harmony of a free market economy without government intervention;
-recognition of money as a stabilizing factor in the reproduction process by regulating money circulation

Institutionalism The subject of study in this area is institutions, social phenomena (institutions) in the system of economic relations and their impact on reproductive processes.

Scientific schools of economic theory. Main economic schools Theory of cyclical economic development of capitalism

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Development of economic theory in Russia.

Modern directions and theories

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