14-th topic. Classical economics – extension

As a last representative of English classical economics David Ricardo’s economic system (XVIII century), in contrast with A.Smith, is different by its integrity, logical structure and sequence.

Essentially, our approach to A.Smith’s doctrine is appropriate also for Ricardo. Thus, also the Ricardo’s doctrine approaches to economy mainly as a mutual natural action system of demand and supply. These consents don’t approach to rationality of behaviors as a major subject of economic system.

For the Swiss philosopher J.C.L. Sismondi (1773-1842) because of depending on government welfare of the people is object for political economics. Differently from English classics he considers economic relations as natural processes. In this regard, he prefers to manage the economic processes by government.

Sismondi’s doctrine completed with the “Crisis theory”. For this theory, the inconsistency between production and consumption, especially decline of consumption usually results in crisis.

In the Sismondi’s theory presentation of consumption decline as a cause of crisis shows that, this theoretical concept jointly approaches to issues about economic growth and social-economic development. But, this impedes to distinguish the issues about economic growth and social welfare.

“An essay on the principle of population” by Thomas Robert Malthus (XIX century) defined strong relationship between population growth and food reserves. As if, this concept finds the optimal level of population growth. Some economic thinkers consider that, this concept helps to discuss the impact of population changes to economy. Supporters of this concept consider that, in the second half of XIX century and after world wars in the XX century decline in childbirth reduced the interest of economic science on population growth problems.

Also, this theory mainly focuses on issues about inconsistency between resources and needs. But, as a solution way of this problem the concept doesn’t find the ideas about management of behaviors. The concept as a solution way prefers the management of population growth, that is strongly contradicts with social values of humanity. 

Some materials were used from the book of “The history of economic studies” published under  editing by M.Meybullayev

Aghanemat Aghayev