The first economic schools: mercantilism and physiocrats. The first scientific schools: mercantilists and physiocrats and their influence on the development of economic theory Economic theories of mercantilists and physiocrats
Mercantilism is economic doctrine and economic policy of the period of early capitalism. Mercantilism reflected the interests of the trading bourgeoisie. The subject of research among mercantilists is the sphere of turnover. Mercantilists believed that the country's wealth was in gold and silver, and its source was foreign trade, which through unequal exchange ensured a positive trade balance.
Mercantilism has two stages in its development: early and late. Early arose even before major geographical discoveries and was relevant until the middle of the 16th century. Late - covers the period from the second half of the 16th century. to the second half of the XVII century.
Early mercantilism was characterized by an understanding of the fallacy of the concept of the nominalistic theory of money, which arose in ancient times, from the works of the ancient Greek philosopher Aristotle (IV century BC).
The later mercantilists contrasted the idea of the “balance of trade” with the idea of the “balance of money” of the early mercantilists. If early mercantilists considered the determining function of money to be the function of accumulation, then later mercantilists considered it to be the function of a medium of circulation.
The most famous representatives of mercantilism are Thomas Maine (1571-1641) and William Stafford (1554-1612) in England, Antoine Montchretien (1576-1621) in France, Antonio Serra (XVI-XVIІ centuries) and Antonio Genovesi (1712-1769) in Italy.
With the development of production, a new movement appears - physiocratism. The main representatives of this school are Francois Canet, Anne Robert, Jacques Turgot. The physiocrats, led by F. Cainet, unlike their predecessors, believed that the source of social wealth was production, not circulation. But production is only in agriculture, i.e., agriculture is the only productive sector of the economy that should be paid attention to. At the same time, the physiocrats considered the surplus product of the agricultural sector to be the source of social wealth.
Let us consider the following basic provisions of physiocratism:
the doctrine of the pure product - the essence of this doctrine is that only in agriculture the production produced exceeds its consumption;
theory of income circulation - the essence of this theory is to divide society into 3 classes:
a) productive class (farmers);
b) class of owners (state, clergy, landowners);
c) sterile class (representatives of industry, trade, artisans).
All three classes interact with each other and use money as a medium of exchange.
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1. The theory of physiocrats and its difference from the theory of mercantelists.
Mercantilism, essence and theory.
Wealth can grow through wars, colonies and foreign trade.
Policy of protectionism (high duties on the import of finished products and the export of raw materials, and vice versa).
Mercantilism went through 2 stages.
2.
The predecessor of the theory of marginalism was Gossen (XIX). As such, it appeared in the last quarter of the 19th century. This direction was based on the analysis of limit values using differential calculus. The beginning of marginalism is associated with the names of Walras, Jevons and Menger. Main ideas:
Menger considered consumers' subjective assessments of the value of certain goods as the basis for the formation of market prices for the corresponding goods, the basis for the pricing process.
3. Economic theory of A. Smith and D. Ricardo. "Paradox" and "dogma" of Smith.
A. Smith (XVIII) wrote “An Inquiry into the Nature and Causes of the Wealth of Nations” (1776), in which the labor theory of value was substantiated.
1. Division of labor - most important factor increasing labor productivity. Smith links the level of RT to market size. Analysis of class structure: landowners, workers, capitalists.
2. The theory of labor value. The natural price of a product is determined by labor costs, i.e., it represents its value. Market price is the price at which a product is sold, determined on the market under the influence of various factors. Smith distinguished between use value and exchange value. In agriculture, value is created not only by labor, but also by nature. Smith distinguished income into three classes: salary, profit and rent. Wages are the price of labor; Smith associated it with population dynamics. Profit is a deduction from the cost of the product created by the worker. Rent is the result of the worker's labor.
3. Productive labor is labor for the purchase of which capital is spent and which creates value. Unproductive labor is paid from income and does not create value. Productive labor is embodied in the product more or less long term existence. Unproductive labor is a service, the provision of which coincides with its consumption.
4. That part of the stock “from which a man expects to receive an income is called his capital.” Fixed capital does not enter into circulation and remains in the hands of its owner. Working capital constantly leaves its owner in one form and then returns in another. Unlike the physiocrats, Smith extended the division of capital to industrial production.
5. When considering reproduction, Smith reduced the value of the social product to the sum of income: salary, profit and rent. There was no permanent capital in his scheme. The social product (c+v+m) was reduced to the newly created value (v+m) - pure product. The cost of the means of production (transferred value) also breaks down into income. According to Marx, Smith's error stemmed from the fact that he did not take into account the dual nature of labor.
D. Ricardo “The Beginning of Political Economy and Taxation” (1817).
1. TTS. He distinguished between exchange and use value: exchange value is the amount of labor embodied in a product. Ricardo did not consider value as a composite value and came to the conclusion that salary and profit, profit and rent are opposed. He defined salary as the cost of necessary means of subsistence. He viewed profit as an excess of value over salary.
3. Mesaeconomics studies the activities of industries and regions.
4. Nanoeconomics studies economic activity at the level of one person.
Freakonomics- a branch of economics that focuses on behavioral economics,
challenges “common truths” and “expert assessments, tries to find an answer to the question “why is this so?”, is initially aimed at sensational discoveries, requires an unorthodox, innovative look at familiar phenomena,
demonstrates what the world really is like.
Gathering facts
Statistical
Causal
Functional
Mathematical
Econometric
Graphic
Positive
Normative
Axiomatic
7. Mercantelism: essence and theory.
It arose in the last third of the 15th century. It represented the unity of ideology, politics and practice. This is a system of ideas expressing the interests of merchant capital. A characteristic feature is a system of measures of internal and foreign policy, aimed at creating advantages for the capital of one’s own country over foreign ones - protectionism.
Traits of mercantilism:
Identification of wealth with money
Production was viewed as a diversion of money from circulation, i.e., as a negative phenomenon. The main area is circulation.
Wealth can grow through wars, colonies and foreign trade.
Protectionist policies (high import duties finished products and export of raw materials, and vice versa).
Mercantilism went through 2 stages.
Early I – monetary balance system (monetarism):
Increase monetary wealth countries
Maintaining an active cash balance
Active government intervention
Stafford, DeSantis, Scaruffi.
Late II – trade balance system (mercantilism):
Active trade balance based on the export of finished goods and intermediary trade
Active protectionism for industrial development
Wealth was understood as an excess of products exceeding needs
High taxation policy
Unequivalent external exchange is a source of profit
T. Men, A. Montchretien, B. Colbert.
8. Economic cycles and types of unemployment. Okun's Law.
Economic cycles– these are successive ups and downs in the level of economic activity over a certain period. The most characteristic feature of cyclicity is that development occurs in a spiral, i.e. it is progressive. Cyclicity is movement from one macroeconomic equilibrium to another.
Change of fixed capital - crisis, recession - the need for money to replace capital.
In the 70s an analysis was carried out: the cycle became 3-2.5 phase, there were no sudden changes. Previously, cycles were global, now they have become regionalized. Cycles are affected by: innovations, political and random events, monetary phenomena related to the size of the money supply.
Structure of total expenditures: the economy is slowed down by their shortage.
Unemployment– the presence in the country of people who are able and willing to work for hire at the current level of pay, but cannot find a job.
Labor force = employed and unemployed who can and want to work and are on the labor exchange.
Unemployment rate = unemployment/labor force.
Full employment – 6% unemployment
§ Voluntary- associated with people’s reluctance to work, for example, in conditions of lower wages. Voluntary unemployment increases during an economic boom and decreases during a recession; its scale and duration vary among people of different professions, skill levels, as well as among different socio-demographic groups of the population.
§ Forced (unemployment waiting) - occurs when the employee is able and willing to work at a given level wages but can't find a job. The reason is an imbalance in the labor market due to the inflexibility of wages (due to minimum wage laws, the work of trade unions, raising wages to improve the quality of labor, etc.). When real wages are above the level corresponding to the equilibrium of supply and demand, supply in the labor market exceeds demand for it. The number of applicants for a limited number of jobs increases, and the likelihood of actual employment decreases, which increases the unemployment rate. Types of involuntary unemployment:
§ cyclical- caused by repeated declines in production in a country or region. Represents the difference between the current unemployment rate economic cycle and the natural rate of unemployment. For different countries It is natural to recognize different levels of unemployment.
§ seasonal- depends on fluctuations in the level of economic activity during the year, characteristic of certain sectors of the economy.
§ technological- unemployment associated with mechanization and automation of production, as a result of which part of the workforce becomes redundant or requires a higher level of qualifications.
§ Registered- unemployed population searching for work and officially registered.
§ Marginal- unemployment of weakly protected segments of the population (youth, women, disabled people) and the lower social classes.
§ Unstable- caused by temporary reasons (for example, when employees voluntarily change jobs or quit in seasonal industries).
§ Structural- is caused by changes in the structure of demand for labor, when a structural mismatch is formed between the qualifications of the unemployed and the demand for available jobs. Structural unemployment is caused by large-scale restructuring of the economy, changes in the structure of demand for consumer goods and production technology, the elimination of outdated industries and professions, and there are 2 types of structural unemployment: stimulating and destructive.
§ Institutional- unemployment that occurs when the state or trade unions intervene in establishing wage rates different from those that could be formed in a natural market economy.
§ Friction- the time of voluntary search by an employee for a new job that suits him to a greater extent than his previous workplace.
§ Hidden:
§ formally employed, but actually unemployed persons; As a result of the decline in production, the labor force is not fully used, but is not fired either.
§ the presence of people willing to work, but not registered as unemployed. Hidden unemployment is partly represented by people who have stopped looking for work.
Okun's Law: Every 2% unemployment leads to a potential 5% drop in GNP.
Primary, secondary; organized, unorganized; cash, urgent; exchange, over-the-counter; traditional, computerized.
Participants:
Sellers (issuers), individuals and legal entities.
Investors (buyers)
Intermediaries (brokers, dealers)
Service organizations (depositories)
Regulatory and control bodies
By status: state, municipalities, international organizations, institutional participants, individuals, professional participants(exchange).
Brokerage (with the client's money for the benefit of the client)
Dealership (on your own behalf with your own money)
Central Bank Management (trust operation)
Clearing
Depository
Maintaining a register of securities (collection, storage, recording, processing)
Organization of trading on the securities market.
A security is a document certifying compliance established form And mandatory details, property rights, the transfer of which is possible only upon presentation. A non-documentary form of the Central Bank is allowed. The CB is the title of the property and the property itself, but they can be separated. Securities can be basic (at property rights) and derivatives (related to price changes). Emission, treasury, municipal, corporate, securities for individuals.
3. The bank must be state-owned
In 1717, Law created a new type of company - Joint-Stock Company. This enterprise was called the "Indium Company". An inevitable companion to the joint stock business is excitement and speculation when buying and selling shares. The rise in prices for the company's shares turned out to be artificial. In the spring of 1720, a moment came when the number of people willing to buy shares turned out to be less than the number of those who wanted to exchange them for money. The stock price plummeted. The company has ceased to be the center of attraction for issued banknotes, and the money supply splashed out. First of all, it became clear what had previously only been guessed at - the dependence of the money economy on real economy. This gave impetus to a rethinking of the role of money and trade, a general turn in economic thought towards the problems of production and distribution of wealth.
12. U. Petit and P. Boisguillebert: life and economic ideas.
William Petit ()
Anti-mercantelist views
Labor theory of value
Negation of the trade balance theory
Introduction of statistical and demographic methods into politics. Savings
Pierre Boisguilbert ()
Transfer of analysis from the sphere of circulation to the sphere of production
The key to the state’s wealth is developed agriculture
Development labor theory cost
Law of Proportional Prices
Condemnation of money as a “universal cry”, reducing its function to collateral for exchange.
13. Decomposition of the Ricardian school, subjective concepts of value.
Subjective concepts of value
Austrian school of political economy.
Carl Menger (1840 – 1921), Eugen Böhm-Bawerk (1851 – 1914) and Friedrich von Wieser (1851 – 1926). They put forward a subjective-psychological concept of the value and price of goods, which they contrasted with the labor theory of value.
Each person subjectively – himself – determines the value of goods, based on the degree of desirability of useful things for him. Moreover, the subjective value of all consumer goods, and therefore their market price, depends only on the importance of satisfying needs and the degree of their saturation. In the process of consumption, there is a natural decrease in utility. With each additional unit of this type of useful things, the degree of satisfaction from their consumption decreases and reaches a maximum value.
Smith and Ricardo's law of value states that a living human labor is the only source and substance of value - a statement that was a huge step forward on the path to objective truth. But profit is also a cost. When we try to express it theoretically, that is, through the law of value, we get an obvious logical contradiction. The fact is that profit is a new, newly created value, or more precisely, a part of it. This is an absolutely correct analytical definition. And only new labor produces new value. But what then to do with the completely obvious empirical fact that the amount of profit is not at all determined by the amount of living labor spent on its production. It depends exclusively on the amount of capital as a whole and in no case on the amount of that part of it that goes to wages. Even more paradoxical: the greater the profit, the less living labor is involved in its production.
The law of the average rate of profit, which establishes the dependence of the amount of profit on the amount of capital as a whole, and the law of value, which establishes that only living labor produces new value, become in direct contradiction in Ricardo’s theory. However, both laws define the same subject (profit). This antinomy was noted with malice by Malthus.
14. Marginalism and its principles. The Austrian school and its representatives.
The predecessor of the theory of marginalism was Gossen (XIX). As such, it appeared in the last quarter of the 19th century. This direction was based on the analysis of limit values using differential calculus. The beginning of marginalism is associated with the names of Walras, Jevons and Menger. Main ideas:
It is unacceptable to determine value by labor costs;
Value is determined by the marginal utility of the good;
Distinction between marginal and total utility based on the introduction of the concept of marginal value.
Stage 1 (): the theory of “marginal utility” and the denial of TTS. The value of each unit of any good decreases as demand saturates. The price of this good is determined limit value– the value of the last unit. That. patterns of demand dynamics were associated with the psychological behavior of the consumer.
Stage 2 (from the 1890s): Marshall, Clark, Pareto. The stage is associated with the recognition of the need for both spheres - production and consumption. It is also characterized by a rejection of the psychological approach, which brings it closer to classical political economy and allows us to call it a “neoclassical” direction in economics.
Carl Menger (XIX-XX) – founder of the Austrian school of marginalism. He rejected TTS and determined the value of goods by the importance of the needs they satisfy. Value depends on people’s subjective assessment of goods that satisfy certain of their needs. The value of each good decreases as its quantity increases.
Menger considered consumers' subjective assessments of the value of certain goods as the basis for the formation of market prices for the corresponding goods, the basis for the pricing process.
15. Basic ideas of Marshall and Jevons
Marshal:
Cambridge School Father
Main work “Principles of Economics”
Economic freedom
Automatic market self-regulation
The harm of government intervention in the economy
Demand schedule and supply schedule (Marshal's cross)
Elasticity of demand (as the effect of changes in the volume of demand on product prices)
Neither demand nor supply has an advantage in the market (in a real system, demand has an advantage in the short term, but supply has an advantage in the long term)
Jevons
Founder of the materialist school of utility theory
Distinguishes between goods, non-products and anti-products
Distinguishes between usefulness, uselessness and anti-usefulness
A product is a product that brings pleasure and prevents suffering.
Non-product - neither one nor the other
An anti-product is a product that needs to be gotten rid of
16. F. List and German historical schools.
In Germany, the refutations of the classics were neo-mercantilist in nature, since an important role was assigned to the state. German economists rejected the ideas of the classics about the objective nature of economic science. The earliest reaction of German economists to classical economic doctrine is associated with Adam Muller And Friedrich Leaf (XVIII-XIX).
Liszt's book - " National system political economy". His ideas formed the basis of the German historical school:
· Understanding of political economy as a national science, focused on solving problems facing the country;
· Recognition that the economy of each country develops according to its own laws;
· Taking into account the influence of not only economic, but historical and natural factors;
· Negative attitude towards liberalism;
Liszt's ideas received further development in the works of later representatives of the historical school. There are several stages in the development of the historical school in Germany:
· “Old historical school” (Rosher, Hilderbrand, Knies)
· “New historical school” (Schmoller, Brentano, Bucher)
“The newest historical school” (Sombart, Weber, Spiethof)
17. Economic doctrine of K. Marx: goods and their properties, money and their functions.
Product
Product produced for exchange
Properties
Consumption social value
Price
Money
1. Simple (x goods A to y goods B)
2. Expanded (x goods A to y goods B and k goods C)
3. General (for goods B and k goods C for x goods A)
4. Monetary (x goods A, y goods B and k goods C per 1 gram of gold)
Gold-money
High price
Portability
Storability
Infinite divisibility
Money is a commodity of universal equivalent
Functions of money:
Measure of value
Medium of exchange
Treasure Education Tool
Instrument of payment
World money
18. Economic doctrine of K. Marx: the law of value, the law of surplus value.
Law of Value regulates the exchange of goods in accordance with the amount of socially necessary labor spent on their production, i.e., according to their social value. Acts as a spontaneous regulator of all social production. Regulatory mechanism of S. z. consists in price fluctuations, in their deviation from social value as a result of competition, under the influence of supply and demand. Excess market price above cost stimulates an increase in supply, and therefore an increase in the production of goods. Deviation of the market price below cost causes a reduction in the production of goods. When the labor time spent on the production of goods decreases, prices fall; when it increases, prices rise, all other things being equal. Market price goods is the “center of gravity” around which prices fluctuate. Surplus value- the difference between the new value created in the labor process and the value of the labor force used for this. It manifests itself in the form of profit. The source of PS is the continued consumption of labor longer than the time during which its value is reproduced. It is formed through the fact that the worker sells his labor power, which is paid below the total value of the products produced by the worker. PS is a category only of the capitalist economy. PS is created exclusively in the sphere of production, and not in the sphere of circulation. The labor force created by lengthening the working day is called absolute, and the one that arises by reducing the necessary working time and changing the ratio of time spent on necessary and surplus labor is called relative.
Subject and method of the mercantilist school of economic thought
The era of the XVI-XVIII centuries. was transition period the decomposition of feudalism and the development of capitalism. On the one hand, the issues of methods of non-economic coercion of peasants, feudal production, comparative advantages of natural and market economies, etc. remained relevant. On the other hand, the origin market economy and entrepreneurship, the development of manufactures and world trade, the robbery of colonies and the process of primitive accumulation of capital required economic justification.
With the strengthening of national statehood and the development of trade, which led to an increased demand for gold and silver, a large number of purely treatises on money and its role in economic life appeared. Large businessmen, statesmen and people of science addressed them to the authorities with their proposals and demands dedicated to economic issues. Gradually a school emerged mercantilists (Mercante- merchant), which meant the emergence of systematized economic views.
Mercantilism, as the first school of economic thought, has a number of theoretical and methodological features. Their essence boils down to the following.
Ш The subject of close attention should be the sphere of circulation (primarily foreign trade) without connection with the sphere of production.
Ш The purpose of the study is the economic growth, which is understood as increasing the monetary wealth of the country. It is achieved thanks to government regulation foreign trade, achieving a positive trade balance, etc.
Ш Wealth is embodied in money, which was artificially invented by people.
Ш The value of money is related to the “natural nature” of gold and silver coins, as well as the amount of money in the country.
Ш It is necessary to stimulate the growth of the working population in the country to reduce wages.
Ш At the core economic research there must be an empirical method for describing external manifestations economic processes. This excludes the possibility of a systematic analysis of all spheres of the economy.
Features of early and late mercantilism
Early mercantilism was relevant until the end of the 16th century. During this period, the mercantilist doctrine was based on the theory of “monetary balance,” which is achieved through the following measures of government regulation:
Ш establishment of the highest possible prices for exported goods;
Ш all-round restriction of imports;
There is a ban on the export of gold and silver from the country.
Late mercantilism- XVII century - characterized by a change in the doctrines of an active “money balance” to an active “trade balance”. The basic principles of mercantilism of this period are formulated as follows.
Ш Wealth is gold, silver and other “treasures”.
Ш The purpose of foreign trade is to ensure the influx of gold and silver into the country, for which it is necessary to buy cheaper and sell more expensive.
Ш National industry must be supported by importing cheap raw materials and protective tariffs on other imports.
Ш To increase profits, wages must be kept relatively low (for example, due to population growth).
But when caring about the trade balance, it is a mistake to believe that it is possible to maintain a trade surplus for a long time without harmful consequences for the national economy as a whole. In the middle of the 17th century. there was already a tendency towards an increase in domestic prices and the outflow of capital from the country along with the influx into the country precious metals. This gradually erodes the benefits of a positive foreign trade balance.
The most famous representatives of mercantilism in Western countries Europeans are the Englishman Thomas Maine (1571-1614), the Frenchman Antoine Montchretien (1576-1621), and the Scotsman John Lowe (1671-1729).
The most mature form was English mercantilism. T. Maine’s short essays “Discourse on England’s trade with the East Indies” and “England’s wealth in foreign trade or the balance of our foreign trade as a regulator of our wealth” are the golden fund of world economic thought.
In his works, Thomas Maine acted as a trade strategist. In contrast to the “private trade balances” that regulate relations between countries, he introduced the concept of a country’s “general trade balance,” to which he attached decisive importance. Meng explained that trade deficits with some countries can be offset by trade surpluses with others. The idea of a balance of trade led to the conclusion of mutually beneficial trade.
Maine believed that the flow of money into the country was important not to increase the treasury, but because “Money creates trade, and trade multiplies money.” This prepared scientific thought to understand the active role of money and trade in stimulating the growth of production that contributes to the prosperity of a nation.
A. Montchretien also considered trade “the main goal of various crafts”, a source of profit. He believed that gold was the key to the power of the state, and foreign trade was the best way to acquire it. Nevertheless, Montchretien advanced further than other mercantilists in understanding the differences between money, even in its golden form, and wealth and well-being. “It is not the abundance of gold and silver,” he wrote, “not the number of pearls and diamonds that makes the state rich, but the presence of items necessary for life and for clothing; whoever has more of them has greater prosperity.” Monchretien paid tribute to agriculture, saying the words: “Farmers are like the legs of the state, they lift and carry the entire weight of its body.”
John Lowe is best known as the organizer of the release paper money in France in 1719. Its financial system was built on the interaction of two institutions. On one side was a private bank organized by Low, which issued banknotes with guaranteed exchange for full-weight silver coins. Thanks to the successful activities of the bank, the government allowed Lowe's banknotes to be accepted for tax payment. This made it possible to begin active lending to various areas of activity under low interest. The bank, which actually became state-owned, had to provide money supply and keep it low loan interest to stimulate economic activity. Another component financial system was a joint stock company controlled by Lowe. Formally, it was created to develop the French colonies in North America, in fact - to manage the public debt.
Ideas and practice of mercantilism in Russia.
IN Russia XVII The policy of enslaving the peasants continued for centuries. Thus, according to the Council Code of 1649, landowners had the right to completely dispose of peasants as their own property. At the same time, within the framework of the feudal economy, an all-Russian market was taking shape, and domestic and foreign trade was growing. In industry, with the dominance of small-scale production, large metallurgical enterprises such as manufactories also developed.
New phenomena were reflected in the economic views of the time. It should be noted the views of a major political figure in the 60s of the 17th century, Afanasy Ordin-Nashchokin, who gave special meaning trade interests of Russia. He called trade “a subsistence and beneficial business” with which “states grow rich.”
The largest economic step in his activities was the New Trade Charter of 1667. The first half of the Charter is characterized by general issues organization of internal trade and customs taxation. The second part contains articles regulating foreign trade.
The New Trade Charter is imbued with the ideas of mercantilism, the desire to attract and retain precious metals into the country, to patronize trade and merchants, and is permeated by protectionist policies. Russian government sought to achieve an active trade balance, guided by the idea of patronizing Russian exports and reducing imports.
In general, Russian mercantilism of the 17th century, as in Western European countries, is economic policy absolutism, which is characterized by state intervention in economic life.
Petrine transformations at the turn of the XVII-XVIII centuries. covered all aspects of activity Russian state, including the economy. Domestic and foreign trade under Peter I was characterized by mercantilism based on a policy of protectionism. The development of production and trade required streamlining money circulation and finance. In 1700-1704. A coinage reform is being carried out, the export of precious metals abroad is prohibited.
The economic thought of this period is very diverse and interesting. You can name the works of Fyodor Saltykov, Alexey Kurbatov, Daniil Voronov. Special attention deserves the work of I.T. Pososhkov’s “Book of Scarcity and Wealth” (1724), intended for Peter I.
“The Book” belongs to the outstanding works of world economic literature of mercantilism. Among its chapters there are titles: “On the Merchants”, “On the Peasantry”, “On Agricultural Affairs”. The “Book” discusses issues of industrial development, organization public finance And monetary system, specific materials and reform projects.
It is especially important that the essay is imbued with general economic principles of a fundamental nature. Pososhkov viewed wealth as a national treasure and goal economic policy considered “national enrichment.” He put forward projects for the development of Russian industry, recommended building factories in public funds, and then transfer them into private hands, proposed introducing a system of patents for inventions, argued for the need for subsoil exploration and referred to Russia’s mineral wealth.
Pososhkov paid great attention to the development of trade, noting that “bargaining is a great matter,” and demanded strict regulation of foreign trade in order to keep prices for Russian export goods at a high level. He recommended exporting abroad only finished products made from Russian raw materials; he considered it necessary to limit the consumption of luxury goods, reduce the import of foreign goods, develop our own industry and, for this purpose, stop the export of industrial raw materials.
In general, Pososhkov’s “Book of Scarcity and Wealth” is distinguished by deep patriotism, the desire to improve the national economy and ensure the economic independence of Russia.
As general development Russian economy along with the emergence of capitalist and commodity relations within feudal system from the end of the 17th century An independent Russian economic literature began to take shape.
Historical significance of mercantilism
Mercantilism left a noticeable mark on the history of economic thought.
Firstly, the concept of the mercantilists was almost entirely addressed to the practice of economic life, although mainly in the sphere of circulation (consumption). This made it possible to introduce into scientific circulation many economic categories, identify important patterns in the field of trade, loan transactions and money circulation. Their influence on the economic spheres was not always adequate.
Rightfully considering money as the most important means for the development of domestic industry and trade, the mercantilists did not attach importance to attracting national economy foreign investments. For them, the problem of unemployment was also unimportant. The main reason for “voluntary unemployment” was considered to be “laziness” or “depravity,” which gave rise to a reluctance to work in workshops or factories for the sake of one’s own leisure time.
Secondly, mercantilism determined the specifics of the formation of market relations and the features of the classical political economy that replaced it in developed European countries and, above all, in England and France.
In England, mercantilism turned out to be the most “fruitful”. The main successes of this country's protectionist policy in the field of trade and industry in the 17th century. associated with the name of Thomas Men, one of the leaders of the East India Company. As a result of the ideological struggle against mercantilism in the works of A. Smith, D. Ricardo, T. Malthus, J.S. Mill and others achieved the best theoretical generalizations of the values of classical political economy. England, as the most economically developed power in the world during the 19th century, laid the foundation for the practical implementation of the most important anti-mercantilist position, declaring complete freedom of both domestic and foreign trade.
Thirdly, Antoine Montchretien in his “Treatise of Political Economy” (1615) introduced the term “ political Economy", which became the uncontested name for economic science until the beginning of the 20th century.
French mercantilism gave rise to a unique school within the framework of classical political economy, which became the teaching of the physiocrats.
Physiocratism as the first theoretical system
The school of physiocrats (physics - nature and kratos - power) arose in the middle of the 18th century. in France in a situation of crisis of the feudal system, economic decline and failures in foreign and domestic policy absolutism in the pre-revolutionary situation. Center economic contradictions was in agriculture. To break the deadlock, it was necessary to break feudal agrarian relations and determine the ways and forms of development of capitalism in agriculture.
At this time, manufacturing capitalism was firmly rooted in France, and the industrial revolution began in England. The era of primitive accumulation of capital was ending, and trade exploitation agricultural countries lost its exceptional significance. Capitalist production itself increasingly became the primary source of income for the bourgeoisie. Therefore, a revision of the economic program and the theory of mercantilism was required.
The teaching of the Physiocrats was almost entirely created by the founder of the school, F. Quesnay, and was similarly developed in the works of A. Turgot, V. Mirabeau and others.
François Quesnay (1694-1774) was born into a family of small landowners. He was a self-taught genius and received his degree as a surgeon at the age of 24. Quesnay published several scientific works that brought him fame as a prominent doctor. Having become a court physician, Quesnay lives in the Palace of Versailles, where he communicates with the most important representatives of educational philosophy of the 18th century.
Quesnay became involved in economic issues at the age of 60, thanks to the publication of the Encyclopedia (1751) by Diderot and d'Alembert. He published articles “Evidence”, “Farmers”, “Grain Bread”, where he spoke as a supporter of large-scale farming. Subsequently, Quesnay left the Encyclopedia staff because he did not share their materialistic views.
The physiocrats sided with the bourgeois educators. In the 60s - 70s. they enjoyed wide influence, including abroad. The school of physiocrats created a significant literature, organized regular meetings, “economic Tuesdays,” and published the journal “Citizen's Diary” and the “Journal of Agriculture, Trade and Finance.”
Criticism of mercantilism
Quesnay and his school, coming out with their system economic views, rejected the main thesis of the mercantilists about the origin of profit from circulation. They tried to explain the increase in wealth from the process of production. In the dialogue “On Trade,” Quesnay argued that one should not mistake the wealth of merchants for the wealth of the country itself and confuse “trading factories with nations and empires,” since trade wealth is only a “cost fund” that instantly disappears with the cessation of reproduction.
On the contrary, they considered international competition to be beneficial. Foreign trade equalizes the prices of goods in different countries, but, by establishing equality of prices, it “does not offer any addition to the sum of products.” Quesnay qualified mercantilistic ideas regarding the enrichment of one country at the expense of another as illusions. Interpreting the trade problems of France from the perspective of those who are only interested in the cheapness of goods and good marketing of their products, he did not understand the problems of the initial accumulation of capital and the progressive significance of foreign trade.
Economic program
Most complete economic program physiocrats was set out in the work of Quesnay " General principles economic policy of the agricultural state." The physiocrats considered the “agricultural society” to be the ideal of social structure. “Society” is dominated by the owning class (landowners and clergy); production (farming) is carried out on capitalist principles. The economic function of farmers is to create a clean product in agriculture through the labor of hired rural workers.
A pure product is created by the land, which, thanks to its natural fertile power, not only compensates for all the costs of labor, seeds, and livestock, but also creates a certain surplus, which is a unique gift of Nature. Industrial labor does not create a pure product, but only changes the form of grain, timber, stone, ore and other things. The results of this labor only compensate for the expenses incurred, without creating any surplus. Trade that exchanges one value for another does not create a pure product. Commercial and industrial activity is fruitless, and the profit from it is similar to the wages that an artisan and merchant pay themselves.
Productive labor is labor that creates a pure product. Any other labor is unproductive, although perhaps useful. The productive class (farmers) is subject to the care of the state and the owner class. The population not engaged in agriculture constitutes a sterile class. Policy low prices on food and other goods is reprehensible, since it makes foreign trade unprofitable for the nation.
Quesnay continued the development of his ideas in his work “Chinese Despotism.” In his opinion, “security of property is the main foundation of the economic structure of society,” otherwise the land itself would remain uncultivated. He rejected the system of state land tenure, pointing out that “ land ownership should be distributed among many owners” interested in increasing income through better management.
Taxes should be light and proportional to the volume national income. They should be levied on the “pure product” and not on wages or necessary consumer goods. Single tax on the income of the land owner may be equal to half of it. Under all conditions, taxation of the farmers themselves is excluded, considering that “the expenditure of the state on agriculture should be considered as an inviolable fund, which must be carefully preserved for the purpose of obtaining tax, income and subsistence for all classes of citizens.” Otherwise, the tax degenerates into a means of robbery and destroys the state.
In the "economic table" Quesnay showed how the total annual product created in agriculture circulates between three classes: productive (farmers), barren (artisans) and landowners, providing compensation for the funds used in agriculture and industry, as well as realizing economic ties between all three classes. The table became the first model of the process of social reproduction - the circulation of annually created products and income.
When constructing the “table”, Quesnay proceeded from the following premises: 1) prices are constant during a year; 2) all income goes to consumption; 3) purchases and sales within each class are not taken into account; 4) foreign trade is ignored; 5) all land is cultivated by peasant farmers who rent it from landowners: 6) industrial goods are produced by artisans. The gross agricultural product in France, according to Quesnay's estimates, is 5 billion livres (4 billion in food and 1 billion in raw materials). Craftsmen produce products worth 2 billion livres. The country's total income is 7 billion livres.
The cycle of all economic life begins with the peasants paying landowners 2 billion livres of rent or rent. With this money, landowners buy 1 billion livres worth of grain from peasants and from artisans consumer goods for 1 billion livres. This concludes their participation in the turnover. Craftsmen spend all their income of 2 million livres on purchasing grain (1 million) and raw materials (1 million) from peasants. Out of a gross income of 5 million livres, the peasants spend 2 million livres on food and crops and 1 million livres on purchasing goods from artisans; They gave 2 million livres of the pure product created by the land as rent to the landowners.
The entire economy, therefore, can be represented as a directed graph with three nodes (classes of society), each of which includes goods worth the same amount as goods output from it. As a result, the economy is in stable equilibrium. Since the laws of economics are natural, the state, without interfering in economic life, should only maintain order, take care of education and roads.
A. Turgot as the finalizer of the physiocratic theory
Anne Robert Jacques Turgot(1727-1781) graduated from the seminary and theological faculty of the Sorbonne. At the age of 25 he held a judicial position in the French Parliament. Since 1761, the intendant of the city of Limoges, since 1774 - the general controller of finance, i.e. Minister of Finance. His reform innovations encountered fierce resistance from parliament. In 1776, Turgot was forced to resign. This meant the impossibility of implementing the physiocratic program under conditions of absolutism and the departure of the school from the historical arena.
The main work of A. Turgot “Reflections on the creation and distribution of wealth” (1770). Like every physiocrat, he believed that only land provides a pure product. Analyzing the behavior of the “sterile class,” Turgot distinguishes in it the owners of capital and wage workers. Capital brings income, which is divided into a part that reimburses the costs of creating products (this includes wages for workers), and another part that makes up the profit on capital. Profit on capital consists of the capital owner's wages, business income and land rent. This understanding of capital had a huge impact on the subsequent development of economic thought.
Let us list the main provisions of the physiocrats who played a role in the future development of economic thought.
Ш The behavior of the economy is natural and natural. Therefore, the functions of the state should be limited, and the individual should be given economic freedom.
Ш Reproduction can be represented as a static equilibrium.
Ш Free trade is necessary.
Ш Direct taxes are better than indirect taxes.
After studying this chapter, you will know.
- what is mercantilism as the first pan-European economic doctrine;
- the main features of early and late mercantilism;
- the difference in the views of representatives of monetarism and mature mercantilism;
- the importance of mercantilism for the development of economic science;
- theoretical ideas of representatives of the physicrats school.
Basic Concepts: early mercantilism, monetarism, late
mercantilism, natural wealth, artificial wealth, active money balance, trading profits, political economy, profit from alienation, “spoilage of money”, metal theory of money, “Gresham’s law”, quantity theory of money, national wealth, Colbertism, dumping, protectionism, manufacturing capitalism, concept of “natural law”, trade surplus, social class, general economic equilibrium, economic liberalism, “Trade Charter”, “Politics” (“Political Dumas”), seigniorage.
Economic doctrine of mercantilists
Characteristics of the era
Since the 14th century In the countries of Western Europe, feudalism is entering a stage of disintegration, and market relations are rapidly developing, which is expressed in the displacement of the natural economy by the commodity-money economy. Trade is becoming the most important sector of the economy, and the role of money as a means of circulation is growing. Wealth is increasingly identified not with the totality of natural goods, not with feudal privileges, as before, but with money. As K. Marx noted, both individuals and the state are overwhelmed by the “universal thirst for money.” The strength of the state is now measured by its monetary resources, and the stability of economic life directly depends on the stability of monetary circulation.
Characteristic economic phenomenon for Western European countries in the XIV-XVI centuries. there was a growing shortage of money in circulation and a simultaneous increase in distrust in the “spoiled” coin, which has repeatedly been the cause of economic and political instability in society. The development of foreign and domestic trade encountered a real obstacle - a shortage of hard currency due to a lack of precious metals. In England, as early as the law of 1381, the export of money outside its borders was prohibited, and debts to foreign merchants had to be covered by English goods. The export of English coins was prevented by regulations adopted in the 15th-16th centuries. “Spending Laws,” which obliged foreign merchants to spend the proceeds from the sale of their goods on the purchase of English goods. In fact, this meant a ban on exporting coins abroad. When entering the country, English and foreign merchants were obliged to exchange their existing foreign money for English money.
In such a situation, the countries with deposits of precious metals were in the most favorable conditions. In the XIV century. Spain and Portugal, which had the largest sources and reserves of gold and silver, emerged as European economic leaders. The rulers of these countries sought by all means to preserve and increase reserves of precious metals. Until the 17th century. Spain, under threat of death penalty, prohibited their export from the country.
End of the 15th - beginning of the 16th century. characterized by stormy economic development European states: England, Holland, France, i.e. those countries that were located on the Atlantic coast. Great geographical discoveries change the nature of trade relations and their directions, and maritime trade between continents is rapidly developing. A flow of precious metals from South America is flowing into European countries. The pursuit of gold by European countries and the desire to expand trade with the East and America were the result of the development of a commodity economy, which was formed in the depths of the natural economy. A powerful impulse for its emergence was the separation of the city from the countryside, crafts from agriculture.
The development of commercial farming and the expansion of exchange contribute to significant changes in the agricultural sector
England, and later France. In agriculture, a transition is taking place from subsistence farming to cash farming, serf labor is being replaced by hired labor, rental relations are developing, and large-scale farming is emerging.
He played an important role in the disintegration of feudal relations. trading capital. In a number of European countries, the process of initial accumulation of capital began, accompanied by the strengthening of the political influence of merchant and usurious capital, the source of growth of which was in the sphere of circulation.
Mercantilists- were convinced that only money (gold and silver) and treasures personify the wealth of the nation and state. The increase in wealth, they believed, required protectionist measures to regulate foreign trade and ensure that exports were encouraged, imports were restrained and national industry was fully supported. Along with this, due to the lack of proper theoretical knowledge in the field of population, mercantilists considered it possible to maintain low level wages due to population growth (labor supply).
The concept of wealth in early and late mercantilism
In the economic literature, two stages are usually distinguished in the development of mercantilism - early and late. The main criterion for such a division is the “justification” of the ways (means) of achieving an active trade balance, i.e. positive balance in foreign trade.
Early mercantilism
Early mercantilism arose even before the great geographical discoveries and was relevant until the middle of the 15th century! V. At this stage, trade relations between the countries were poorly developed and sporadic. To achieve a positive balance in foreign trade, early mercantilists considered it advisable:
· set the highest possible prices for exported goods;
· limit the import of goods in every possible way;
· prevent the export of gold and silver from the country (monetary wealth was identified with them).
Consequently, the theory of monetarism of the early mercantilists can be regarded as a theory of “money balance”.
Early mercantilism was characterized by an understanding of the fallacy of the concept of the nominalistic theory of money, which dates back to ancient times, including the works of the ancient Greek philosopher Aristotle (IV century BC). Arguing this way, the nominalists denied not only the commodity nature of money, but also its connection with precious metals.
However, during early mercantilism, as in the Middle Ages, the government engaged in defacement of the national coin, reducing its value and weight in the hope of enticing foreign merchants to exchange their money for native ones and buy more goods. The transformation of money into a symbol, a fixed ratio of gold and silver money in circulation (the bimetallism system) was justified both by the facts of the circulation of inferior money and by the erroneous statement that gold and silver are money due to their natural properties, performing the functions of a measure of value, a treasure and world money.
Late mercantilism
Late mercantilism covers the period from the second half of the 16th century. to the second half of the 17th century, although some of its elements continued to manifest themselves in the 18th century. At this stage, trade relations between countries become developed and regular, which was largely due to the encouragement of the development of national industry and trade by the state. To achieve a trade surplus, recommendations were put forward:
· conquer foreign markets thanks to relatively cheap goods (i.e. low prices), as well as resale of goods from some countries in other countries;
· allow the import of goods (except luxury goods) while maintaining a positive trade balance in the country;
· export gold and silver to carry out profitable trade transactions, mediation, i.e. to increase their number in the country and maintain a positive trade balance.
The later mercantilists shifted the emphasis in the theory of monetarism, contrasting the idea of the “balance of money” of the early mercantilists with the idea of the “balance of trade.”
Recognizing the commodity nature of money, the late mercantilists continued to see their value in the natural properties of gold and silver. However, it was they who determined the transition from the metallic to the quantitative theory of money and the system of monometallism. And if early mercantilists considered the determining function of money to be the function of accumulation, then later mercantilists considered it to be the function of a medium of circulation.
The emergence of the quantity theory of money seemed to be a natural reaction to the “price revolution” of the 16th century, caused by a huge influx of gold and silver into Europe from the New World and showing a causal relationship between changes in the quantity of money and prices of goods. According to the later mercantilists, the value of money is inversely related to its quantity, and the price level of goods is directly proportional to the quantity of money. They tendentiously believed that increasing the supply of money, increasing the demand for it, stimulates trade.
Physiocrats- considered wealth not money, but “products of the earth.” Agricultural production, and not trade and industry, from their point of view, is the source of society's wealth, which is determined by the “natural” law established by God himself.
For physiocrats, the wealth of a nation increases if there is and is constantly reproduced the difference between the products that are produced in agriculture and the products that were used to produce these products during the year, i.e. so-called land rent in kind. Quesnay called this difference “pure product” and considered the only “productive class” in society to be the landowning class. Quesnay argued that “among all the means for acquiring property, there is not one that would be better, more profitable, more pleasant and decent for a person, even more worthy for a free person, than agriculture.”
The main work of F. Quesnay, “Economic Table” (1758), contains a scheme for dividing society into three main classes:
· productive class of farmers;
· class of land owners;
· “sterile class” - people not employed in agriculture.
All three social classes are in a certain economic interaction. Through the mechanism of purchase and sale, the process of distribution and redistribution of the “pure product” occurs and the necessary prerequisites are created for the constant renewal production process, i.e. reproduction. Quesnay sees this process as consisting of the following stages:
· farmers rent land from landowners for money and grow crops on it;
· land owners buy products from farmers and industrial products from artisans, as a result of which part of the money they receive for renting land goes to rural owners and artisans;
· farmers purchase industrial goods from industrialists;
· Industrialists purchase agricultural goods from farmers.
· As a result, farmers again receive cash for renting land.
Thus, the economic process was presented to the physiocrats as a natural harmony, which could even be described strictly mathematically. Subsequently, this idea was further developed in various attempts to build mathematical models production and distribution of products and in modern economic science exists in the form of numerous sectoral and product balances, intersectoral models, formalized versions of theories of macroeconomic equilibrium and economic growth.
An integral part economic theory physiocratism is the idea of government non-interference in the natural course of economic life. If we proceed from the scheme proposed by F. Quesnay, there is simply no room left for any conscious, active government policy* in the field of economics. More precisely, according to Quesnay, the state must establish laws that would correspond to the “natural laws” of nature, and with this the economic functions of the state can be considered exhausted.