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Classical economics, also known as the classical school of economics, [1] or classical political economy, is a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. It includes both the Smithian and Ricardian schools. [2]
Classical economics focuses on the tendency of markets to move to equilibrium and on objective theories of value. Neo-classical economics differs from classical economics primarily in being utilitarian in its value theory and using marginal theory as the basis of its models and equations. Marxian economics also descends from classical theory.
Other forms of market socialism are based on classical economics, such as those advocated by Thomas Hodgskin, who viewed interest accumulation, rent and profit as deductions from exchange-value, so that eliminating the capitalist element from the economy would lead to a free market and socialism. The term market socialism has also been applied ...
Hesiod active 750 to 650 BC, a Boeotian who wrote the earliest known work concerning the basic origins of economic thought, contemporary with Homer. [3] Of the 828 verses in his poem Works and Days, the first 383 centered on the fundamental economic problem of scarce resources for the pursuit of numerous and abundant human ends and desires.
Samuel Hollander is one of the most influential and controversial living authors on History of Economic Thought, especially on classical economics. His monumental studies of Adam Smith , David Ricardo , Thomas Malthus and John Stuart Mill have provoked some sharp reactions.
In neoclassical economics, on the other hand, the preoccupation with society's long term growth and development inherent in classical economics was abandoned altogether; instead, economic analysis came to focus on the study of the relationship between given ends and given scarce means, forming the concept of general equilibrium theory within an ...
A point on this line indicates that there was no deviation from the trend that year. All other points above and below the line imply deviations. Using log real GNP, the distance between any point and the 0 line roughly equals the percentage deviation from the long-run growth trend.
In Economic exchanges, it involves the exchange of goods or services. In Social exchange, it is the exchange of approval and certain other valued behaviors. Rational Choice Theory in this instance, heavily emphasizes the individual's interest as a starting point for making social decisions.