Classical Political Economy Research Articles

Exchange Rate Determinants of the US Dollar and Chinese RMB: a Classical Political Economics Approach

This paper contributes to the literature on determining the real exchange rates by developing a model that is based on key propositions of the classical political economy within which the real competition governs domestic and international trade, the labor theory of value is underneath domestic and international prices and, under these conditions, the principle of absolute cost advantage shapes international trade. The econometric analysis shows that the relative real unit labor cost is a key regulator of the long-run behavior of real exchange rates in both, China and the USA, for the period 1982-2018.

Rostek, Joanna. Women’s Economic Thought in the Romantic Age: Towards a Transdisciplinary Herstory of Economic Thought

Rostek, Joanna. <i>Women’s Economic Thought in the Romantic Age: Towards a Transdisciplinary Herstory of Economic Thought</i>

Aleksandr I. Moskovskiy: on institutionalism

The article provides an overview and assessment of the legacy of most significant Russian researcher of the past decades in the field of theory and methodology of classical institutionalism — candidate of science in economics, associate professor Alexander Ivanovich Moskovskiy, who worked for many years at the Department of Political Economy at Lomonosov MSU Faculty of Economics. The article shows the original ideas of A. I. Moskovskiy on the correlation of classical political economy, other schools of the heterodox branch of economic theory and neoclassical, methodology and theory of classical institutionalism. Special attention is paid to the research of A. I. Moskovskiy on the relationship between the technological progress, socio-economic processes, as well as the content and role of labor. The article reveals that A. I. Moskovskiy is among the first and most profound researchers who not only criticized the processes of deindustrialization but showed the importance of focusing on rendustrialization of the economy, showing (based on classical institutionalism and modern Marxism methodology) that strategic planning and active industrial policy can become the most important means to solve this problem. The industrial era, during which huge enterprises were the main institutions for maintaining social order, is not coming to an end; that affects employment and the nature of work. At the same time, the scolar did not deny that postindustrial society is now increasingly characterized as a “knowledge society”, in which knowledge and information become a key resource for technological, economic, and social development. An important point relates to the analysis of A. I. Moskovskiy changes in the methods and forms of managing skilled workers in conditions of increasing complexity and knowledge-intensive labor.

On Political Economy and its Fallacies: Why Critiques and Rethinking Matter

This article is the 10th anniversary lecture of Agrarian South: Journal of Political Economy, delivered in 2021. It provides a reflection on key issues and fallacies that lie at the origins of political economy. It is argued that, as regards the problem of knowledge production, the formulation of factually and logically incorrect theories begins with English classical political economy. Political economy as developed in England in the second half of the eighteenth century—a period which saw a rapid increase in its trade especially with its colonies of conquest, while also making the transition to factory production—proceeded on the basis of verbal and material fallacies and silences which have been reproduced in historiography and the discipline of economics to this day.

Carl Menger’s Smithian contributions to German political economy

In this paper we contextualize Carl Menger’s work in relation to the transformations of German political economy from the 1860s to the 1890s. We demonstrate that his Grundsätze (1871) was a culmination of the German subjectivist tradition which had started in the early nineteenth century. Menger’s synthesis of this tradition is comparable to Adam Smith’s synthesis of earlier knowledge in the Wealth of Nations (1776). Menger’s contribution was continuous with the intellectual project of leading German economists, such as Wilhelm Roscher, to whom Menger had dedicated his book. Roscher, however, also promoted a historical turn, that was combined with a progressive policy agenda by a new generation of German economists after they founded the Verein für Socialpolitik in 1872. These divergent Roscherian legacies clashed vehemently in the Methodenstreit. During this debate Menger elaborated in his Untersuchungen (1883) an evolutionary and spontaneous theory of institutional change, in line with the legacy of the Scottish Enlightenment and in contrast to a more rationalist and constructivist theory of institutional change expounded by Gustav Schmoller and other Verein economists. The new policy-oriented direction of German political economy carried the day, also due the fundamental socio-economic transformations in the German and Austro-Hungarian Empires, and prompted Menger to restate in 1891 the social policy agenda of the classical political economists, most prominently Smith. Menger’s recurrent proximities to Smithian political economy – in the synthetic contribution of 1871, the theoretical innovation of 1883, and the policy agenda of 1891 – suggest that his arguments are best understood as a defense of what Boettke has called the “mainline” in economics.

Economic theory and philosophical anthropology: Marx, Gramsci, Sraffa and the study of human nature

In the present paper, we ask whether in the “new” Classical political economy as reproposed by Sraffa there is a satisfying theory of human behaviour and social change. To discuss this issue, we try to show a possible pathway to integrate the analytical part of his work with the historical analysis based on the materialist philosophical anthropology proposed by Marx. We will examine first the joint vision of Garegnani and Andrea Ginzburg to trace a compatibility between Sraffa’s thought and Marx’s thought, then we put forward some hints for a non-deterministic theory through Gramsci’s philosophy of praxis.

James M. Buchanan and the Soul of Classical Political Economy

Boettke and Marciano’s (2020) The Soul of Classical Political Economy curates ten previously unpublished works by James M. Buchanan. The editorial introductions to these are independently valuable as scholarly works; they shed light on the context in which the papers, essays and letters were written, and draw important connections across Buchanan’s different writings. In this review essay, I consider Buchanan on classical liberalism, Knut Wicksell and the role of the economist in light of these newly available writings. The book and review essay should prove of interest not only to historians of economics, but also to scholars and economists generally, as Buchanan’s views on the classical tradition provide important philosophical support for the entire neoliberal enterprise, particularly as it relates to public policy, public economics and public choice.

From classical political economy to “Indian Economics”: a case of contestation and adaptation in universities in colonial India

PurposeBy the mid-19th century the British colonial state introduced liberal education to India. Amongst various disciplines, political economy illustrates the concerns of the colonial state with the education of Indians, and its anxiety with quelling political discontentment. The emerging Indian nationalist intelligentsia also utilized ideas from classical political economy, first taught in educational institutions, to critique colonial policy and proposed the development of “Indian Economics”, suited to national economic interests. This paper explores the development of political economy as a specific knowledge form in Calcutta University and Bombay University, and its connection with colonial educational policy.Design/methodology/approachThis study relies primarily on university records and the proceedings of the Education Department to bring out the politically sensitive nature of the teaching of economics in colonial India.FindingsThe study finds that political economy grew from being a minor part of the overall university syllabi to becoming part of the first university departments created in early-20th-century India. The government and nationalist forces both found the discipline to be relevant to their respective agendas. The circulation of knowledge theoretical framework is found to be relevant here.Originality/valueThe history of political economy in Indian universities, especially during the 19th century, has not been dealt with in any detail. This study tries to fill this gap. The close connection between politics and the teaching of economics has also not been studied closely, which this paper does.

Vectors, Stages and Problems of Nonortodoxal Foundations of Economic Science Formation

The relevance of the study is underpinned by continuing sharp scientific and practical discussion on the evolution of economic science aimed at obtaining exhaustive answers to such questions as: “What is orthodoxy in economic science? Why is it that the theoretical and methodological orthodoxy that accompanies the emergence and transformation of alternative directions of world economic thought cannot be overcome not only in the past but also at the present time? What is the historical significance of a retrospective analysis of vectors, stages and problems of the formation of unorthodox foundations in the development of this branch of human knowledge? and others. The findings of prominent Russian and foreign scientists-economists, allowing to reveal and comprehend the diverse methodological and theoretical components of orthodoxy in the past and present set the subject of this review article. The purpose of the study is to consider, systematize and generalize the evidentiary warnings published in the works of prominent modern researchers about the urgent need to overcome the negative consequences of orthodox maxims, which, having been absolutized since the time of the “fathers of political economy”, continue to manifest themselves to this day. The key research methods include systematic approach, evolutionary and cross-industry analysis. The results of the review incorporate conclusions and evidence that make it possible to unbiasedly comprehend the key scientific and practical problems for the fate of this science in the past and present. In particular, the author’s position is argued that the examples of postulating judgments about the presence and coexistence of “Western-non-Western”, “bourgeoisnon- bourgeois” economic science, which are still found in Russian economic literature, are based solely on the classformational research approach and therefore are completely untenable. It has been proved that from its “ancestors” and “fathers” of economics, i. e. adherents mercantilism and classical political economy principles to modern economists (from institutionalists to Keynesians and neoliberals) the existing palette of orthodox theoretical and methodological innovations accompanying the development of economic science explicitly or implicitly along with its commitment to the class analytical approach are due to a certain subtext of the absolutization of “objective economic laws”.

Konkurence a monopol v předkeynesovské neoklasice a koncepce J. Robinsonové a E. Chamberlina

The article describes when and in what form the term &#8220;monopoly&#8221; appeared in theory. First, attention is paid to A. Smith&#8217;s classical political economy and the neoclassical binary model of competition and monopoly presented by A. Marshall. Robinson&#8217;s model of imperfect competition and Chamberlin&#8217;s model of monopolistic competition of 1933 were turning points in economic theory. The article not only highlights the elements that were adopted from Marshall and Pigou of the Cambridge Neoclassical School and are common to both theories, but also emphasizes the aspects in which the approaches of Robinson and Chamberlin differ and highlights their contribution to economic theory and competition law.

David Ricardo – recognized leader in classical political economy (to the 250th anniversary of his birth)

Introduction. David Ricardo is a very prominent figure in the history of economic thought. He is a recognized leader in classical political economy and a reputable financier in both Britain and Europe in the first half of the XIX century. He is rightly considered one of the creators of the labor theory of value, he has brought it to its logical conclusion. The scientist made a significant contribution to the development of a scientific method for studying economic phenomena.Purpose of the research is to generalize the economic views of a prominent scientist on economic phenomena and processes, the action of economic laws that ensure the balance of a market economy and the basic principles of economic liberalism; analyze the Ricardo’s views on the laws of social wealth distribution between three classes of society and the impact of the existing distribution of income on the growth of wealth.Methods. The methodological basis of the study are such general scientific methods as analysis, synthesis, induction and deduction, which were used to assess the views, conclusions and recommendations of the scientist to ensure market equilibrium and increase the material wealth of society; historical – to understand the essence of the evolution of existing views on the labor theory of value, the theory of money and land rent; combining the abstract method with quantitative analysis to determine the quantitative characteristics of economic phenomena; positive and normative – to study the main and distinctive features in the views of representatives of classical political economy.Results. It has been researched the David Ricardo’s scientific work and it has been established that he was a prominent representative of classical political economy, a follower and at the same time an opponent of certain theoretical positions of Adam Smith. It was found that the most important ideas of economic theory have been reflected in his labor theory of value, the theory of capital and money, the theory of income distribution, tax theory and the theory of comparative advantage in international trade. It was established that the scientist had made a significant contribution to the development of the scientific method of research, in particular, by introducing the method of convergence from the abstract to the concrete and widespread use of the method of scientific deduction. According to the scientist, the subject of political economy should be the study of the laws of distribution of income between classes of society in the form of rents, profits and wages. D. Ricardo made a significant contribution to the justification of free trade policy in the international sphere, the importance and profitability of foreign trade for countries.Discussion. The prospect for further research is a deeper and more detailed analysis of the methods used by the scientist in the study of economic phenomena and processes. This will allow assessing the Ricardo’s contribution to the formation and development of economics more objective.

Wang Yanan and the Complex of DAS Kapital

Economist Wang Yanan is one of the translators of the full Chinese translation of Das Kapital. Wang Yanan and Guo Dali became attached to Das Kapital at the Great Buddha Temple by chance because of their high level of English, the same interests and coincidences. In order to pass the language barrier of translating "Das Kapital", accumulate knowledge of classical political economy and increase the perceptual understanding of the capitalist system, Wang Yanan traveled eastward to Japan and went to England, Germany and other countries. After co-translating "Das Kapital", Wang Yanan used the knowledge structure of "Das Kapital" to investigate and analyze Chinese society, and wrote "The Principles of Chinese Economy". Since then, Wang Yanan has studied Das Kapital from a holistic, partial and critical perspective. Wang Yanan spent his entire life in the translation, research, dissemination and application of Das Kapital. Wang Yanan's complex with "Das Kapital" has left a scholar's spirit of concentration, hard study, integration of theory with practice, and knowledge gained through discussion to scientific researchers.

The language of pluralism from the history of the theory of price determination: Natural price, equilibrium price and administered price

AbstractThis paper seeks to identify terminology to aid in distinguishing the approaches to the theory of price determination as presented in classical political economy, neoclassical economics and post‐Keynesian economics. Through a review of the respective literature, a dominant usage is identified for the theoretical price concept in each theory. Natural price is identified with classical theory, equilibrium price with neoclassical theory and administered price with post‐Keynesian theory. Use of the differentiated terminology is advocated for improving clarity in pluralist discourse on the theory of price determination and the role of prices in modern market economies with their inherent complexity.

Enclosing the Seas

Abstract This article outlines a process of enclosing private property on the Arabian Sea through the colonial imposition of secure property rights during the nineteenth century. The article proceeds in two paralleled sections. The first section explores the violence of the natural world through the lens of shipwrecks. It traces a shift in the right to shipwrecked property from littoral communities to the merchants who owned the cargo before it was seized by the waves. The second section traces the shift from merchants who deployed violence as an essential tool in commercial competition, to relying on the British Empire for the security of their property and the strategic use of force. On the one hand, both these transitions involve the imposition of classical political economy and the colonial seizure of protection rents obtained by merchants. However, they also reflect the ways in which maritime potentates and influential merchants were able to co-opt imperial policies and profit from this transition. Over the course of the nineteenth century, violent coercion was expunged from the skillset of Arabian Sea merchants, but only after compensating merchants and coastal communities for relinquishing the profits of protection.

Varieties of peripheral capitalism: on the institutional foundations of economic backwardness*

This paper critically analyses the literature spawned by Peter Hall and David Soskice’s influential book on the varieties of capitalism. It takes as a starting point the critiques within the comparative political economy literature about the supply-side views on economic growth, and the problems with emphasizing the nature of firm behavior as the source of institutional variety. It argues that demand-led growth, as discussed by Post-Keynesian authors, provides an important alternative to the conventional approach to the explanation of varieties of institutional experience. It suggests that understanding the reasons for institutional variety within capitalism requires incorporating the work of Cambridge Keynesians which recovered the work of Classical political economy authors and extended Keynes’s ideas on effective demand to explain the process of accumulation. It also requires incorporating the ideas of Prebisch and the Latin American Structuralists, who analysed the limits to accumulation in peripheral countries. The paper also discusses the limitations of Neo-Kaleckian models of demand-led growth used by some authors in the comparative political economy literature, and it suggests a new taxonomy for ordering varieties of capitalism.

Reproductions

As a counterpart to the discussion of recent theories of “social reproduction” and their confrontation with the Marxian critique of political economy, this essay develops a genealogy of the concept of “reproduction” itself, from a semantic and historical point of view. Observing the intersection of problems coming from the realm of natural history and from classical political economy, which involve three different significations (remaining invariant despite displacements in their uses) and which we identify by means of the classical categories of mimesis (reproduction of a model), genesis (continuation of life), and poiesis (restoration of a stock), the essay is consequently able to compare strategies of crisis resolution and to reconstruct an imaginary of revolution based on mutation and interruption.

Bitcoin as a digital commodity

ABSTRACT The paper demonstrates that Bitcoin is not money but rather a digital commodity that has value but no value-added. We show that both the production of and the speculation with Bitcoin draw from the existing global pool of value-added. By extending the Classical Political Economy approach and the New Interpretation of the labour theory of value to the domain of digital commodities, the paper argues that Bitcoin mining is an automated reproduction process that requires no direct (living) labour and thus creates no new value. Bitcoin, in this regard, is not ‘digital gold’. Between sectors, Bitcoin mining redistributes wealth and value-added already in existence, while Bitcoin miners with more computational power compete to appropriate the mining profits within the blockchain. The Bitcoin blockchain then creates rivalry in both the ownership and the use of the digital commodity through non-legal means. Our approach can be further expanded to the larger domain of automated digital commodities that are reproducible without the expenditure of direct, living labour.

Etatism and liberalism as leading and competing paradigms for the development of economic theory

Introduction. Economic theory as a fundamental economic and social science, born out of the dominance of the market (capitalist) mode of management, is constantly evolving, improving and enriching by new ideas and concepts. A penetrating analysis of the nature of its historical development makes it possible to identify and characterize certain cycles in the changing ideological attitudes of theoretical economists.Purpose of the research: study of the nature and trends of economic theory through the prism of the main paradigms, the formulation of their own evaluative judgments and the forecast of subsequent paradigmatic changes.Methods: deductive and comparative analyses.Results. The main paradigms of the development of theoretical economic thought are defined by the author as etatism and liberalism. The ideology of etatism tilts one part of economists on the side of the state, hopes for its «collective mind» in the regulation of economic and social life; liberal ideology makes the rest of the theorists advocates economic freedom, liberal ideology makes the rest of theorists advocates economic freedom, rational model of individual and «natural order» behavior under the influence of the market laws. Three paradigm cycles have been traced and described in the development of economic theory: 1) mercantilism → classical political economy → Marxist political economy (from the beginning of the XVI th century to the last third of the XIX th century); 2) Marxist theory → neoclassical economics→ keynesian economics (from the last third of the XIX th century up to the 1970s of the XX century); 3) keynesian economics → neoliberal and new classical economic theory → behavioral (experimental) economics (from the mid-1970 s.).Discussion. The analysis concluded that instead of the initial antagonism of economic ideologies of etatism and liberalism, since the second cycle, there has been a trend towards convergence and mutual enrichment. In the near term, the growth of etatistic ideology in the development of economic science is forecast, as evidenced by interest in the «experimental economy» The main explanation of the cyclicality of the main paradigms of the development of the theoretical economy the author sees in the change of generations of outstanding scientists-economists, change of «intellectual fashion».

Broad strokes towards a grand theory in the analysis of sustainable development: a return to the classical political economy

ABSTRACT This article aims to provide some broad strokes towards an analytical and methodological framework for the analysis of sustainable development. This is done by calling sustainable development's scholars to return to the multilayered legacy of the classical political economy and conceive sustainable development in both historical and transhistorical terms. It is argued that a return to the tradition of the classical political economy, through the lens of Smith’s, Mill’s and Marx’s stage theories of development, provides a powerful theoretical framework able to contextualise, develop and integrate the multiple, diverse, and middle-range contemporary strands in development studies. The classical political economy provides an analytical backbone of certain elements, including the important role of history, the necessity of an interdisciplinary approach, and the analytical priority of social classes that could be critical in enriching sustainable development studies. Students and scholars of international development would benefit from this worthwhile exercise that distinguishes in a succinctly and methodically manner between the current state of development studies and classical political economy perspectives on economic development.

Freedom and Capitalism in Early Modern Europe: Mercantilism and the Making of the Modern Economic Mind

Freedom and Capitalism in Early Modern Europe: Mercantilism and the Making of the Modern Economic Mind