Classical Political Economy Research Articles

Maximum entropy economics

A coherent statistical methodology is necessary for analyzing and understanding complex economic systems characterized by large degrees of freedom with non-trivial patterns of interaction and aggregation across individual components. Such a methodology was arguably present in Classical Political Economy, but was abandoned in the late nineteenth century with a theoretical turn towards a purely mechanical approach to understanding social and economic phenomena. Recent advances in economic theory that draw from information theory and statistical mechanics offers a compelling statistically based approach to understanding economic systems based on a general principle of maximum entropy for doing inference. We offer a brief overview of what we consider the state of maximum entropy reasoning in economic research.

Technological Unemployment and the Resurgence of Political Economy

The aim of this paper is to discuss the possible impact of the “third wave” of technological unemployment on economic theorizing. Twenty-first century technological progress, heavily impacting on employment, is a process that just started but whose main new feature is already well known. This feature concerns robots (and artificial intelligence) and their entry into the production process. Robots do not simply increase labor productivity in cooperation with humans but can substitute for human labor, producing commodities without human input possible and hence, possibly, giving rise to long-term mass unemployment which will require some form of public policy intervention. This scenario exhibits important implications for economic theorizing, since mainstream theory, rooted in the general equilibrium approach, faces difficulties in dealing with a reality where social classes and the class struggle (a few robot owners vs. many unemployed humans) regain a role, labor productivity becomes irrelevant and uncorrelated with the (subsistence) wage/subsidy that must be paid to the unemployed, the labor market does not clear, redistributive policies replace the optimal allocation of scarce means, and so on. This scenario returns economic theorization to the years of classical Political Economy, when the main focus of theoretical investigation was on social classes, the class struggle and redistribution of the surplus. In particular, Sraffa’s 1960 model might represent a good foundation for further theoretical development.

ВПЛИВ ЧИННИКІВ НА МОДИФІКАЦІЇ В СИСТЕМІ ОБЛІКУ ФІНАНСОВИХ РЕЗУЛЬТАТІВ ОСНОВНОЇ ДІЯЛЬНОСТІ БУДІВЕЛЬНИХ ПІДПРИЄМСТВ

A retrospective of the origin and interpretation of the economic essence of profit is examined. The substantiation of profit by representatives of various schools of political economy is covered. It is established that the beginning of in-depth scientific substantiation of profit is characteristic of the times of mercantilism. The research of representatives of classical political economy in the identification of profit is considered important. The subject of their attention was wealth and forms of its growth in order to meet social needs.Theories of profit determination are identified. The main positions on the definition of profit are outlined by such theories as: compensatory, functional, factor, labor and psychological. The identification of profit in the current accounting standards is investigated. The peculiarities of construction are highlighted and their influence on key modifications in the system of accounting of incomes, expenses and financial results of activity of construction enterprises is outlined. Among the main features of construction are the following: duration of construction; real estate of construction products under the condition of constant movement of means and objects of labor; execution of construction works in the open area; the complexity of relationships and the diversity of participants in the construction process; territorial branching of construction objects. The components of accounting policy that affect the accounting of financial results of the main activities of construction companies are studied. Peculiarities of gross debt accounting in construction are considered.It is determined that the accounting of gross debts is also an important issue today. The informational reflection of incomes, expenses, financial results of the basic activity of the construction enterprises in the financial and statistical reporting is presented. Modifications in the system of accounting for financial results of activities in the field of construction are an open discussion area of research.

Sraffa on Marshall’s theory of value in the Cambridge lectures: achievements in an unfinished criticism

In his Cambridge lectures, Sraffa criticised Marshall’s theory on the basis of the recognition of the incompatibility between classical political economy and marginalist economics. Preparing his lectures, Sraffa had also identified the need to determine prices and distribution simultaneously although some implications of this latter result were probably not yet fully evident to him. Sraffa still accepted the Marshallian thesis that classical political economy and marginalist economics identified two alternative “ultimate standards of value”. This position bears witness to Sraffa’s initial adherence to the Marshallian theoretical framework. The road towards Production of Commodities was open, but still unfinished.

James M. Buchanan and Young J. Yoon, Individualism and Political Disorder

James M. Buchanan was a towering figure in 20th century economics. He did not single handedly resurrect classical political economy in the second half of the 20th century and rescue it from the Marxist interpretation or the technocrats’ disregard, but any account of modern political economy would be woefully incomplete without giving Buchanan primary of place in the narrative. His main insights are basic: (1) one cannot engage in public economic analysis without postulating a theory of the st...

Проецирование эволюционной трансформации идеализма на базовые методологические подходы оценки экономической эффективности проектов

The article studies theoretical and methodological approaches of subjective and objective idealism, General scientific subjective and consumer methodological approaches, analyzes the scientific positions of economic schools of mercantilism and marginalism, considers the views of the economic school of physiocrats, the ideology of objective rationalism of classical political economy. In the course of theoretical research, the process, tendency and regularity of transformation of the main principles of subjective and objective idealism into the basic characteristics of consumer and system methodological approaches, which are the basis for evaluating the economic efficiency of investment projects, are established.

Socialist alternatives to capitalism I: Marx to Hayek

This paper surveys the development of the concept of socialism from the French Revolution to the socialist calculation debate. Karl Marx’s politics of revolutionary socialism led by an empowered proletariat nurtured by capital accumulation envisions socialism as a “top-down” system resting on political institutions, despite Marx’s keen appreciation of the long-period analysis of the organization of social production in the classical political economists. Collectivist thinking in the work of Enrico Barone and Wilfredo Pareto paved the way for the discussion of socialism purely in terms of the allocation of resources. The Soviet experiment abandoned the mixed economy model of the New Economic Policy for a political-bureaucratic administration of production only loosely connected to theoretical concepts of socialism. The socialist calculation debate reductively recast the problem of socialism as a problem of allocation of resources, leading to general equilibrium theory. Friedrich Hayek responded to the socialist calculation debate by shifting the ground of discussion from class relations to information revelation.

Thomas Malthus’s Rhetorical Political Economy

ABSTRACT David Ricardo and his followers forged rational argumentation and empirical verification into the discipline of classical political economy. Thomas Malthus distinguished his own view of the discipline from Ricardian social science by prudentially applying his rationally derived and empirically verified models to complex historical circumstances. He theorized this addition in the second edition of his Essay on the Principle of Population, refined it in his Principles of Political Economy, and he practiced prudential argumentation in his arguments about the corn laws (1814–15). This Malthusian political economy is rhetorical in two senses of the word. First, Malthus inserted prudence (a virtue associated with rhetoric since antiquity) into political economy. Second, by appealing to people’s lived experiences, Malthus made political economy popularly persuasive.

Thomas Malthus’s Rhetorical Political Economy

ABSTRACT David Ricardo and his followers forged rational argumentation and empirical verification into the discipline of classical political economy. Thomas Malthus distinguished his own view of the discipline from Ricardian social science by prudentially applying his rationally derived and empirically verified models to complex historical circumstances. He theorized this addition in the second edition of his Essay on the Principle of Population, refined it in his Principles of Political Economy, and he practiced prudential argumentation in his arguments about the corn laws (1814–15). This Malthusian political economy is rhetorical in two senses of the word. First, Malthus inserted prudence (a virtue associated with rhetoric since antiquity) into political economy. Second, by appealing to people’s lived experiences, Malthus made political economy popularly persuasive.

Human Development from the Perspective of Ecology

The pursuit of the liberation of all mankind and the comprehensive development of human freedom is the theme of all marxist theories.Marx in the criticism of classical political economics "abstract", to the whole history of the definition of "general", found the abstract "general" of the people behind the objective existence and state of development, so as to clearly indicate the relationship between man and nature of human development has experienced on the basis of the nature of the dependence on one stage, gradually from natural objects depends on the stage and with the natural fusion of freedom comprehensive stage, and the concrete connotation of man's free overall and implementation path.

Scientific approaches to the economic category «public sector efficiency»

The article investigates scientific approaches to the category of «public sector efficiency» that have been formed in foreign and domestic economic theory. The author substantiates the necessity of functioning of the public sector system of the national economy and evaluating the effectiveness of its activities. The author considers the first points of view in the scientific world of the physiocrat F. Kene, as well as representatives of the school of classical political economy W. Petty and D. Ricardo in determining the performance of government structures. We study the works of the founders of the concepts of effective functioning of activities in the market economy, including state organizations, such as V. Pareto, A. Pigou, J.M. Keynes, P.F. Drucker, and others. Modern concepts of the efficiency of the public sector of the economy in Western economic theory, developed by P.E. Samuelson, W.D. Nordhouse, R.A. Musgrave, J.E. Stiglitz, N.G. Mankyu, K.R. Mcconnell, and others. Analyzes the scientific approaches to evaluating the effectiveness of the public sector in the national economy domestic scientists-economists such as E.V. Balatsky, O.A. Kokorina, T.D. Romashchenko, Yu.I. Treschevsky, V.V. Lukyanova, O.V. Rudakova, E.M. Samorodova, A.V. Revkuts, S.R. Muravyov, etc. On the basis of analysis of scientific works the author has selected a targeted, cost management and production approaches to the evaluation of the effectiveness of the public sector. In the course of the study, it was concluded that evaluating the performance of the public sector of the national economy based on only two aspects is not appropriate, since it does not fully reflect the activities of all structural components of the public sector. The author believes that the structure of the public sector of the economy includes three main, specific and quite independent elements-management structures, state corporations and the «social sector of the state». Therefore, it is advisable to conduct a study of the efficiency of activity of the public sector of the national economy using a three-component indicator that reflects all areas of activity and aspects of its functioning.

Theory of Consumer Behavior in Economic Science

The aims of this article is to study the evolution of the theory of consumer behavior in economic science in the context of the ratio of rational and irrational motives of behavior and the answer to the question: can the theory of economic communications become an instrument for the further development of the theory of consumer behavior. The research methodology includes the method of rational reconstruction of scientific knowledge, the method of comparative analysis, the historical method, the method of scientific abstraction and others. The theoretical basis of the study is the work of representatives of various areas of economic thought in a historical context, including ancient philosophers, scholastics, mercantilists, representatives of classical political economy, neoclassical economic theory, behavioral economics, institutional economics, systemic economic theory.The author concludes that the further development of the theory of consumer behavior is possible based on a synthesis of the theory of productive consumption and the theory of economic communications.

The past and present of abolition: reassessing Adam Smith’s “liberal reward of labor”

Abolish prisons; abolish police; abolish immigration enforcement: current “abolition” movements have yet to receive the attention that international political economy has given to its social justice forerunners, e.g. World Social Forum and Occupy. I argue that to make the current abolition movement legible to the field first requires a retrieval of abolition’s import for classical political economy. Towards this aim, I reassess the ways in which Adam Smith’s ethical prospecting of the “liberal reward of labor” referenced abolition. I then contextualize Smith’s agonistic argument for commercial society within late seventeenth to early nineteenth century struggles over imperial commerce, especially Atlantic slavery. For this purpose, I take a prompt from the institutional framework of “abolition democracy” provided by Angela Davis and WEB Du Bois. Specifically, I examine the ways in which the prospect of abolition challenged a) existing institutions that rendered enslaved labor in plantation economies as property; as well as b) the patriarchal institutions in England that rendered labor through a “master/servant” relation. I conclude by arguing that current abolition movements prompt us to address the obfuscation in classical political economy of particular agents and sites through which struggles over freedom have been waged across capital’s imperium.

Teleología y Trabajo: Finalidad subjetiva en la Lógica de Hegel y el Proceso de trabajo en Marx.

La explicación del proceso de trabajo en la formulación expuesta en El Capital implica una síntesis de la concepción de objetividad en el pensamiento de Marx; que rompe con el iusnaturalismo de la Economía Política Clásica. No obstante, su estructuración dialectico- práxica del trabajo como finalidad en la relación sujeto- objeto fue objeto de una fundamentación contradictoriamente re-naturalizadora. La teleología de Marx expuesta en El Capital se sustenta en una asunción crítica de la teleología hegeliana. En aquella la finalidad subjetiva tiene por base la acción subjetiva reducida por las fuerzas de la exterioridad natural superior. En Marx, por el contrario, se observa una renovada comprensión del proceso de trabajo, con una objetividad que comprende el momento subjetivo y la transformación de la exterioridad como partes del proceso de trabajo. No obstante, el análisis de esa diferenciación, frente a la teleología de Hegel, puede servir de base a una visualización de los elementos lógicos que contesten las interpretaciones que fundamentan de forma exteriorisante y re-naturalizadora el proceso de trabajo como finalidad.

КОНЦЕПЦІЇ МІЖНАРОДНОГО БІЗНЕСУ У ТЕОРЕТИЧНОМУ ДИСКУРСІ ПРОЦЕСІВ ОФШОРИЗАЦІЇ ЕКОНОМІЧНОЇ ДІЯЛЬНОСТІ

Financial and economic activity of business structures in global conditions is characterized by significant expansion of scale and diversification of organizational and managerial forms, innovation and digitalization of production processes, radical modernization of technological base in the format of industry 4.0, as well as systematic development of corporate networks and further deeper integration into them of national economies of almost all countries of the world. Under such conditions and taking into account the dominance of multinational enterprises (MNEs) in the world economic structure, the question of utilization of mechanisms and tools of offshorization of economic operations raised to a great extend in the context of realization of diversification of outsourcing corporate strategies, tax planning and erosion of tax base. Since 2010s, the world theoretical discourse of international business outlines offshorization of economic activity into a separate and independent direction of the general theory of competitive advantages and factors of production, although a scientific interest in this issue originated in classical political economy and theories of international trade, direct and portfolio foreign investment, multinational enterprises, management and the international division of labor. The article reveals the transformational changes that have undergone the essential content, implementation mechanisms, forms and levels of offshorization of business activities under the influence of leading patterns and trends in the development of world economy at different stages of its evolutionary progress. It is proved that the theoretical qualification of business offshoring always faces significant methodological difficulties related to the constant diversification of international business and the increasing complexity of its organizational and managerial structures, as well as the diversification of business and state interaction in the implementation of the social contract. Considerable attention is paid to the study of the paradigm of international business and justification of its universal nature to explain the objective reasons of offshorization of business, foreign direct investments and economic activity of multinational enterprises in both regional and global dimensions.

Households production in State and stateless societies: three tales and one letter

Interpreting three tales based on the words of Hume, Hobbes, and Nozick, and a letter by Vilfredo Pareto, we present a comparative analysis of household production in several societies with and without State. The community we analyse is formed by two households, which may either follow a selfish or an altruistic logic. Furthermore, unless the stateless community has a common defence against external marauders or implements protection in cases of bad weather, the household production can be stolen or damaged. The society with State is ruled by a Government that can be either partisan or bipartisan. The economic analysis of the private and public choice of this community allows us to compare the efficiency and inequality of several configurations of society, as depicted by classical political economy.

Routledge Historical Resources: History of Economic Thought

Routledge Historical Resources: History of Economic Thought (HET) is an online platform of curated Taylor & Francis‐owned content. The journal articles, thematic essays, and primary and secondary source documents cover economic thought in the period from 1700 through 1914. HET covers major economic schools of thought, including classical political economy, the Enlightenment, and socialism. These currents of thought are used along with notable figures, time periods, and topics—including money and banking, public economics, poverty, and economic crises—to categorize documents. The browsing functionality in HET is user-friendly and makes use of faceted searching. HET’s most glaring flaw is the lack of a machine-readable text alternative for some primary source documents that are rendered as PDF facsimiles of the original documents; these PDFs impede not only researchers using assistive technology but also users attempting to search the full text of those documents.

Мизес и Хайек в МК „Кремиковци“

The author makes an attempt to investigate functioning of the largest metallurgical plant in Bulgaria – “Kremikovtzi” MC – through the prism of Misesian and Hayekian arguments concerning the economic organization of the socialist society. The main conclusion is that the arguments with a high degree of abstraction – especially those of Mises - remain invisible at the level of a particular enterprise. The views of Hayek, however, those of the classical political economists, and of Simeon Demostenov find their confirmation in the everyday life of the metallurgical combine even before its official opening in 1963 and until the last day of the Bulgarian socialist regime in 1989. To some extend “Kremikovtzi” is representative for the economic reality in Bulgaria during the era of socialism and is indicative of the results and shortcomings of the state-implemented industrialization of the country. Bulgaria became an industrialized country, but it is not sure whether the industrialization was successful.

Beyond Rational Choice: International Trade Law and The Behavioral Political Economy of Protectionism

ABSTRACT The classic political economy of trade models state behavior on the international plane by reference to the formation of domestic interests. Voters, interest groups, and politicians are rational actors in this model, pursuing their economic preferences without cognitive or motivational distortions. This article questions the sufficiency of the rational choice model in the formation of contemporary trade policy. Starting from the classic political economy story, this article explores real-world deviations from rationally expected outcomes by drawing on cognitive psychology. Using both theoretical and empirical analysis, we seek to identify key distortions that can better explain voter and politician behavior in the current trade wars. We begin with loss aversion in that individuals have asymmetrical attitudes towards gains and losses. Rising inequality within the rich world amounts to a perceived relative loss particularly for middle-class citizens. Combined with the absolute rise of equality between countries, this can trigger a double loss frame—both as an individual loss and a national loss—that can profoundly shape anti-trade preferences in certain countries. Framing trade as a security threat also invokes powerful hawkish biases. Lastly, the availability bias can be provoked by social media mechanisms making people tend to focus on particular risks and overweight their import.

THEORETICAL BASIS OF BUDGETARY REFORM (IN THE CONTEXT OF THE UKRAINIAN REALITIES)

Introduction. Budget reform is a form of solving the problems that have accumulated in the budgetary system of Ukraine in the course of its development. Problem. For successful budget reform, it is very important to clearly outline its theoretical basis within the framework of a more general theory - public finance, which is developing in the context of the main areas of economic theory. Purpose: to consider (according to the main areas of economic theory) the provisions of the theory of public finances, as well as special theoretical approaches to budgeting and reforming the budget system, which, based on the realities of today, can form the theoretical basis of budget reform in Ukraine. The presentation of the material of the article. The article shows that within the classical theory of public finance, the scientific provisions of the German cameramen regarding optimal tax rates, physiocrats regarding balancing of budget revenues and expenditures, representatives of classical political economy regarding budgeting favorable conditions for the market, representatives of the German historical school concerning an increase in the share of government spending in GDP, marginalists on the equivalence of taxes and public goods, representatives of neoclassical eq. onomic school to introduce a progressive tax system. It is noted that within the framework of the modern theory of public finances, the scientific provisions of Keynesianism and neo-Keynesianism on countercyclical budgetary regulation of the economy, monetarism regarding the influence on the aggregate demand for changes in the amount of money in circulation, the new neoclassicism to reduce the tax burden on business, and the non-classical synthesis are important policies based on social justice, and neoinstitutionalism with respect to state budgeting institutions. It also emphasized the need to use specific theoretical approaches to reforming the country's budgetary system. Results and its discussion. Selected scientific provisions of the budget reform may find practical application provided that the Ukrainian realities of military-political and socio-economic content are taken into account. Conclusions. The scientific provisions of the classical and contemporary theory of public finances, as well as specific theoretical approaches to reforming the budget system, formulated in line with the main lines of economic thought, can form the theoretical basis of budget reform in Ukraine. Their use in the development and implementation of the reform must be based on the Ukrainian realities of today.