The life of society is very diverse. To study the various spheres of its existence, mankind has created many scientific disciplines. One of them is economic theory. The study of this science must certainly begin with the history of its emergence and development. This will help to better understand the difficult discipline.
Economy definition
There are various interpretations of this multifaceted and capacious discipline, each of which is true. On the one hand, economics is a human economic activity. On the other, a national or household. The conversation may be about the economy of an enterprise, industry or the whole country. But be that as it may, this theory is the foundation of any society.
It represents the state’s life support system, solving the tasks of not only production, but also the further distribution and consumption of various goods. We can safely say that the economy arose along with man. And today it continues to exist for the benefit of all people.
Economic science
The emergence of any of the disciplines is preceded by an attempt by people to solve certain issues related to ensuring their livelihoods. Economics and economics have also emerged for this reason. It is worth saying that the rudiments of knowledge in this discipline people still possessed in primitive society, when a certain part of any product obtained was received by each of its members.
Economic science studies the rules that help the state, company or person to solve their economic problems. That is why knowledge of this discipline is important for the development of any society.
Stages of formation
Economics and economics continued to develop along with man. The norms and rules of this discipline were first recorded in documents published in the states of the Ancient East. This was the code of laws of Babylonia, which was adopted in the 8th century BC. e. The economic commandments of mankind are recorded in the Bible. They belong to the 2nd and 1st millennia BC.
It is believed that the main stages in the development of economic science still originate in ancient society. The appearance of this scientific discipline is associated with the works of philosophers of ancient Rome and Greece. Initially, their writings considered only household management and home economics.
It is also believed that the main stages in the formation of economic science as an independent discipline took place only in the 16-17th centuries. This happened during the emergence of the capitalist system. It was at this time that relations began to develop within enterprises and between families, and international and national markets began to form. The state began to pay more and more attention to the economic life of society. All this was the reason for the wider dissemination of discipline in the production and consumption of various goods.
The main stages in the development of economic science include the emergence of political economy. This new term first appeared in the 17th century. after the publication of the book of Antoine de Montcretien - an economist from France. The work, entitled The Treatise on Political Economy, developed the theory of the need for tight government control over the existing market. Household management was no longer considered here. Political economy has become a science of the laws governing the formation of the national market. In other words, discipline has greatly expanded the scope of its study. These are the main stages in the development of economic science (briefly).
Today, the theory of the production and distribution of various goods in each country is called differently. So, in Turkey and Sweden, this is the "national economy", and in Finland this term sounds like "the doctrine of the economy." In modern Russia, the name of the discipline is “general economic theory”.
Subject of study
At all times, economists have been interested in a wide range of problems facing human society. That is why there was no single interpretation of the subject of study of this discipline. While some experts believed that science addressed the issues of material well-being of people, others claimed that theory solves the issues of organizing consumption and exchange. There were many other opinions.
Modern economic science proceeds from the fact that the subject of its study is the problem of limited resources of society and the limitlessness of the material needs of man. In today's society, discipline solves the problem of maximizing profit with minimally incurred costs.
The system of economic sciences is a general theory. Moreover, in the discipline there are three main sections:
- introduction to economic theory;
- microeconomics;
- macroeconomics.
All sections of economic science are of great importance. However, the first one is especially important. It performs fundamental and methodological functions. That is why without its study it is impossible to master both micro- and macroeconomics.
The second section of science examines small business units, giving an explanation of the choice that firms and individuals make. With regard to macroeconomics, here we study the large-scale market phenomena that arise at the level of the state and society as a whole. The second and third sections of economic science do not have clear distinctions. Micro and macroeconomics are closely related. And this is not surprising, because all decisions taken at the level of business units have a direct impact on the formation of the national market.
The functions of economic discipline
What is the role of science of production and distribution of goods created by society? The main function of the economy is cognitive. Discipline describes, summarizes and explains all the processes of the spheres of production and consumption.
The system of economic sciences is based on the economy, which is the main methodological basis of all its areas. This is the second main function of this discipline. The theory develops means and tools for studying the economics of trade and industry, transport and public catering, etc.
Economic science also has a practical function. She points to all the desirable and undesirable steps and measures that are important for the prosperity of society at this stage of its development.
There are certain socio-economic sciences. Their main function is to study various aspects of an individual’s behavior in society. Such sciences include sociology and political science, as well as psychology. The subject of study of these disciplines partially coincides with the subject of study of economic theory.
Methodology
The subject considered by any science is studied using certain methods. The methods of economics are different. In their list are:
1. Formal logic. With its help, economic phenomena are studied from the side of their form and structure.
2. Analysis. This method involves the study of each part of the subject under consideration separately.
3. Induction. This is a method of following from the particular to the general and constructing a certain theory based on the collected facts.
4. Deduction. The main principle of this method is to build hypotheses, which are subsequently compared with facts.
5. Comparison. This is a method that reveals the similarity and difference of processes, as well as phenomena, and allows you to identify new things through already studied.
6. The analogy. This method involves the transfer of some properties from the already studied phenomenon to the unknown.
7. Dialectics. This is a method using an extensive set of diverse cognitive techniques.
8. Scientific abstraction. It assumes the invariance of all phenomena of the economic sphere, in addition to the studied.
9. The historical method. This method allows you to evaluate the features that have various economic systems.
10. The logical method. Its application provides a transition from simple to more complex.
Existing methods of economic science include economic and mathematical modeling. It is a simplified description of reality. Such a model should help in determining the causes of various economic phenomena, their changes, patterns, as well as the consequences that they may bear.
The origin of economics
The systematization of such an important discipline for human society proceeded in parallel with the formation of states. The first stages of economic science took place during the heyday of the countries of the Ancient World. The origins of this discipline are reflected in the writings of philosophers and some state rulers. These thinkers sought to idealize a slave-owning society and subsistence economy, while relying on the norms of ethics, morality and morality.
The initial main stages of the development of economic science were passed thanks to the philosophers of ancient Greece. In their writings, they systematized naive fragmentary ideas about the production and distribution of material goods. At the same time, the emergence of a new discipline that has a scientific look.
In the list of these prominent thinkers are Xenophon, Plato and Aristotle. Moreover, the main stages in the development of economic science from its origin to the present day cannot be described without mentioning these scientists. After all, it was Plato who introduced the concept of “economy”. This philosopher was the first to attempt to justify the correct division of labor and singled out industries such as trade, craft and agriculture. Xenophon favored subsistence farming and considered the existence of free people and slaves to be natural.
A huge contribution to the development of economic science was made by Plato. He created the theory of an ideal state, the basis of which is justice. In his opinion, in such a social system, everyone should do only what he is able to do the most.
Aristotle also contributed to the development of economic science. In his works reflected all the areas of knowledge that existed at that time. According to Aristotle, slavery is the basis of any production, and slaves are living tools. Moreover, he argued that a person is not able to exist outside the state and society.
The development of economic science was continued in the era of feudal economy. Moreover, the theory of production and distribution of goods had a theological character. The writings of philosophers of the Middle Ages justified the economic dominance of church and secular feudal lords. One of these scholars was the Arab statesman, philosopher and historian Ibn Khaldun.
The main stages in the development of economic science and economic systems cannot be described without mentioning his works. Ibn Khaldun insisted on the eradication of greed and squandering, spoke out negatively about large usurious operations and argued about the god-worthiness of trade. In contrast to the theories of the philosophers of the Ancient World, the Arab thinker elevated money made in the form of coins of gold and silver into the category of the most important elements of economic life.
In Western Europe, the most significant authors of economic thought in the Middle Ages were St. Augustine and Thomas Aquinas. The first of these two philosophers insisted on the universal necessity of labor, expressing the idea of the equivalence of mental and physical form. At the same time, the thinker considered it a great sin to make trading profit and usurious activity.
According to the theory of Thomas Aquinas, all things on Earth do not belong to people, but to God. That is why, by their nature, they must be common. The philosopher condemned usury, but insisted on the necessity of the existence of estates and private property.
Creation of schools of economic theory
The gloomy times of the Middle Ages are over. But the main problems of economic science have not been resolved. They consisted in the fact that the philosophers of the countries of the Ancient World, as well as the Middle Ages, could not compose a single teaching. Their views were fragmentary.
The Renaissance was the period of the creation of the first school of economic theory. It was called mercantilism, which translated from Latin meant "to trade." Adherents of this theory identified the wealth of the nation with silver and gold, the source of which was the sphere of circulation. Representatives of this school were not theorists. Most of them were seafarers.
In those days when great geographical discoveries had not yet been made, early mercantilism was formed. Actually, this direction was until the middle of the 16th century. Representatives of this school saw only legislative ways to increase wealth. They banned the export of silver and gold, and also limited import operations.
From the 16th to the mid-17th century, late mercantilism received its dawn. The basis of the teachings of this school was an increase in the flow of exports, compared with the import of goods. Adherents of the school of late commercialism believed that while maintaining an active balance of trade, the country would become richer. Representatives of this movement were allowed to export gold and silver outside the country. This allowed for profitable trade deals. At the same time, imports were subject to heavy duties, and exports were encouraged in every way.
Problems of economic science after the second half of the 18th century. decided the teachings of the physiocrats. On its basis, a school of French economists was created.
Physiocrats argued that the source of wealth of any nation is the sphere of material production, and not circulation. However, they talk about the importance of only agricultural labor. Adherents of this theory divide the whole society into three classes:
- farmers;
- land owners;
- all other citizens.
The last of these three classes, the physiocrats called barren.
Classical School of Political Economy
This direction got its name for the truly scientific nature of its methodologies and theories. The school of political economy arose at the end of the 17th century, reaching its peak in the 18-19 centuries. Four stages can be distinguished in the development of this current. The first of them lasted from the late 17th to the second half of the 18th century. This was a period when market relations were booming, and economic thought focused on the sphere of production. Representatives of this school, including the Englishman William Petty and the Frenchman Pierre Boisguilberg, argued that the nation was becoming rich not only thanks to precious metals. A significant role in this is also played by houses and lands, goods and ships.
In the last third of the 18th century. The second stage in the development of classical political economy began. The writings of Adam Smith, a Scottish philosopher and economist, were written during this period. He made an invaluable contribution to the development of the economy, expounding this discipline as a holistic theory, finding a relationship between all its elements. A. Smith argued that only personal interest motivates a person to economic activity. According to the philosopher, all people strive to accumulate wealth and improve their financial situation. At the same time, the activities carried out by the individual contribute to the flourishing of society. The philosopher believed that the laws of economics would only apply in conditions of free competition and the unhindered movement of capital, money and goods.
In the first half of the 19th century The third stage of development of the school of political economy has begun. This was the period when the industrial revolution ended in most developed countries.
A bright representative of this school was D. Riccardo. He completed the creation of classical political economy. Riccardo's undoubted merit is his presentation of discipline in a logical sequence and systematization of the economic knowledge available at that time. The scientist formulated the theory of comparative advantage, which served as a proof of the mutually beneficial international trade.
The important place of economic science in the development of society was proved at the fourth, last stage of the school of classical political economy, which began to exist in the second half of the 19th century. The most prominent representatives of this trend were John Stuart Mill and Karl Marx.
In their works, scientists relied on the provisions of the classical school, but at the same time put forward innovative ideas.They argued about the necessity of state participation in the economic and social development of society, talked about the socialist system, defended and defended the interests of the working class. Thus, Karl Marx created the theory of the inevitable death of capitalism and the possibility of building a society without private property, which was not further confirmed in practice.
Modern schools
Many new economic trends were formed at the turn of the 19th and 20th centuries. These schools are considered to be modern. At a time when economic science gained an applied character, such a direction as institutionalism was formed. The name of this term means “mode of action”, as well as “customs” and “instruction”.
The main stages in the development of economic science to institutionalism were an examination of various spheres of society. But this school, unlike all others, is built on the idea of exercising "social control" over the economic sphere.. 20-30- 20 . 60-70- . , , - . , .
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Marginalism stands out among the new economic trends. Its representatives were the first in the history of this science to attempt to study market phenomena using mathematical methods, laid the foundation for the theory of the distribution of productive forces, explained the behavior of people with their desire to get maximum utility, etc.
There are also new theories of economics such as Keynesianism and neo-Keynesianism, conducting and post Keynesianism, neoliberalism and monetarism.