The Development process of Economics: free Management or State Intervention?

 

As a social science, economics has experienced many academic revolutions and conclusions. Regarding the reform and development of economics, the history of economic thought or the history of economic theory is set up in the undergraduate course to introduce and summarise it. If you copy the university textbooks in full, it will be too long and reduce the readability. Therefore, in this article, the author chooses the debate between free management and state intervention as a perspective to sort out the development context of economics, and interspersed introduces the three revolutions and three integrations in the history of economics.

In the development history of economics, the liberal management and the state interventionists have led the way, both of which occupied the mainstream of economics for a period of time, and later were challenged by the latecomers. Today, microeconomics based on mathematical analysis has matured, but in macroeconomics, the dispute between free management and state intervention has not yet come to an end. The first head-on confrontation between the two sides occurred before economics officially emerged as a discipline.

Classical Revolution and the first synthesis

Mercantilism is an early doctrine of economics, which can be divided into early and late. The representative of early mercantilism is William Stafford, while the representatives of late mercantilism are Compeer of France and British Thomas Men. Mercantilism belongs to the faction of state intervention in free operation and state intervention. It advocates requiring the government to actively intervene in the economy to ensure that currency does not flow out of the country.

Mercantilism had a positive significance for the development of productivity in the early stage of its appearance, and it effectively promoted the development of manufacturing. However, in the later period of mercantilism, due to its trade protectionism claims, free trade became impossible to realise, and economic development was hindered. (For how free trade can promote economic development, please refer to the theory of comparative advantage)

French classical school of political economy in the 18th century made physio rats

Founders of the Bouillabaisse by Ques nay spread Monism, in the hands of Monism reached completion status. Its policy propositions against mercantilism suggested that agriculture and handicraft industries should be vigorously developed. In terms of classification, the Physio rats should be classified as a free-run school.

British Classical Political Economy and French Classical Political Economy are collectively called Classical Political Economy, and they also belong to the free management school in terms of classification. The academic circles generally believe that the originator of British classical political economy is the political economist William Petty, who has developed greatly in the hands of Adam Smith, and finally reached its peak in the hands of David Ricardo.

The first of the three revolutions in the history of economics, the "classical revolution”, was the liberal management represented by Adam Smith, which overthrew the dominance of the state interventionist represented by mercantilism in economics tuition in Singapore.

The first confrontation between the state interventionist and the liberal management team ended with the free management team's complete victory.

The period from the Classical Revolution to the Keynesian Revolution was called the "classical era", and the liberal management team opened its doors in the field of economics. 160 years of rule (from the publication of "The Wealth of Nations" in 1776 to the publication of "General Theory of Employment, Interest and Currency" in 1936)

Smith and Ricardo in terms of value theory is supported by labour theory of value, while the Marxist foundation is also inherited from Smith and Ricardo's labour theory of value, so Marxism is also seen as the successor to David Ricardo. After Smith, Ricardo pushed British classical political economy to a peak. Ricardo's book "Political Economics and Taxation Principles" elaborated on his theoretical system. The classical economists after Ricardo gave up the labour theory of value and were therefore criticised by Marx as vulgar political economy.