As the revision of historical thought is a continual process, this volume seeks to by adopting new perspectives, usually fortified by new research, which overturn Economic Thought and Policy in Less Developed Europe: The Nineteenth Eastern Europe in the Long Nineteenth Century By Ivan T. Berend University of.
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Share Back to top. Memories of the Present. Institute of Public Administration. Encounters with Modern Ireland. A Sociological Chronicle Uncertain Ireland A sociological chronicle Was Ireland A Colony? Image, Culture and Identity. Memories of the Present, A Sociological Chronicle, Becoming an Irish Flaneur' Slater, E.
Terrence McDonough
Becoming an Irish Flaneur' In: Villagescapes of the West of Ireland' Slater, E. Villagescapes of the West of Ireland' In: To be added , 5: Nature and Culture , 4: Terrence McDonough 'Marx on nineteenth-century colonial Ireland: Irish Historical Studies , xxxvi: Classical economists developed a theory of value , or price, to investigate economic dynamics. In political economics, value usually refers to the value of exchange, which is separate from the price.
Market prices are jostled by many transient influences that are difficult to theorize about at any abstract level. Natural prices, according to Petty, Smith, and Ricardo, for example, capture systematic and persistent forces operating at a point in time. Market prices always tend toward natural prices in a process that Smith described as somewhat similar to gravitational attraction. The theory of what determined natural prices varied within the Classical school. Petty tried to develop a par between land and labour and had what might be called a land-and-labour theory of value.
Smith confined the labour theory of value to a mythical pre-capitalist past. Others may interpret Smith to have believed in value as derived from labour. Ricardo also had what might be described as a cost of production theory of value.
Classical economics - Wikipedia
He criticized Smith for describing rent as price-determining, instead of price-determined, and saw the labour theory of value as a good approximation. Some historians of economic thought, in particular, Sraffian economists, [14] [15] see the classical theory of prices as determined from three givens:. From these givens, one can rigorously derive a theory of value. But neither Ricardo nor Marx, the most rigorous investigators of the theory of value during the Classical period, developed this theory fully.
Those who reconstruct the theory of value in this manner see the determinants of natural prices as being explained by the Classical economists from within the theory of economics, albeit at a lower level of abstraction. For example, the theory of wages was closely connected to the theory of population. The Classical economists took the theory of the determinants of the level and growth of population as part of Political Economy. Since then, the theory of population has been seen as part of Demography. In contrast to the Classical theory, the determinants of the neoclassical theory value:.
Classical economics tended to stress the benefits of trade. Its theory of value was largely displaced by marginalist schools of thought which sees " use value " as deriving from the marginal utility that consumers finds in a good, and " exchange value " i. Ironically, considering the attachment of many classical economists to the free market, the largest school of economic thought that still adheres to classical form is the Marxian school.
British classical economists in the 19th century had a well-developed controversy between the Banking and the Currency School.
Classical economics
This parallels recent debates between proponents of the theory of endogeneous money , such as Nicholas Kaldor , and monetarists , such as Milton Friedman. Monetarists and members of the currency school argued that banks can and should control the supply of money.
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According to their theories, inflation is caused by banks issuing an excessive supply of money. According to proponents of the theory of endogenous money , the supply of money automatically adjusts to the demand, and banks can only control the terms e. The theory of value is currently a contested subject. One issue is whether classical economics is a forerunner of neoclassical economics or a school of thought that had a distinct theory of value, distribution, and growth.
The period —75 is a timeframe of significant debate. Karl Marx originally coined the term "classical economics" to refer to Ricardian economics — the economics of David Ricardo and James Mill and their predecessors — but usage was subsequently extended to include the followers of Ricardo. Sraffians , who emphasize the discontinuity thesis , see classical economics as extending from Petty's work in the 17th century to the break-up of the Ricardian system around The period between and the s would then be dominated by "vulgar political economy", as Karl Marx characterized it.
Perhaps Schumpeter's view that John Stuart Mill put forth a half-way house between classical and neoclassical economics is consistent with this view. Georgists and other modern classical economists and historians such as Michael Hudson argue that a major division between classical and neo-classical economics is the treatment or recognition of economic rent. Georgists and others argue that economic rent remains roughly a third of economic output.
Sraffians generally see Marx as having rediscovered and restated the logic of classical economics, albeit for his own purposes. In short, dependency theory attempts to explain the present underdeveloped state of many nations in the world by examining the patterns of interactions among nations and by arguing that inequality among nations is an intrinsic part of those interactions.
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Most dependency theorists regard international capitalism as the motive force behind dependency relationships. Andre Gunder Frank, one of the earliest dependency theorists, is quite clear on this point:. Furthermore, these relations are an essential part of the capitalist system on a world scale as a whole.
Garden City, New York: Anchor Books, , p. According to this view, the capitalist system has enforced a rigid international division of labor which is responsible for the underdevelopment of many areas of the world. The dependent states supply cheap minerals, agricultural commodities, and cheap labor, and also serve as the repositories of surplus capital, obsolescent technologies, and manufactured goods. These functions orient the economies of the dependent states toward the outside: This division of labor is ultimately the explanation for poverty and there is little question but that capitalism regards the division of labor as a necessary condition for the efficient allocation of resources.
The most explicit manifestation of this characteristic is in the doctrine of comparative advantage. Moreover, to a large extent the dependency models rest upon the assumption that economic and political power are heavily concentrated and centralized in the industrialized countries, an assumption shared with Marxist theories of imperialism. If this assumption is valid, then any distinction between economic and political power is spurious: Not all dependency theorists, however, are Marxist and one should clearly distinguish between dependency and a theory of imperialism.
The Marxist theory of imperialism explains dominant state expansion while the dependency theory explains underdevelopment. Stated another way, Marxist theories explain the reasons why imperialism occurs, while dependency theories explain the consequences of imperialism. The difference is significant. In many respects, imperialism is, for a Marxist, part of the process by which the world is transformed and is therefore a process which accelerates the communist revolution. Marx spoke approvingly of British colonialism in India: England has to fulfil a double mission in India: For the dependency theorists, underdevelopment is a wholly negative condition which offers no possibility of sustained and autonomous economic activity in a dependent state.
Additionally, the Marxist theory of imperialism is self-liquidating, while the dependent relationship is self-perpetuating. The end of imperialism in the Leninist framework comes about as the dominant powers go to war over a rapidly shrinking number of exploitable opportunities.
World War I was, for Lenin, the classic proof of this proposition. After the war was over, Britain and France took over the former German colonies. A dependency theorist rejects this proposition. A dependent relationship exists irrespective of the specific identity of the dominant state. That the dominant states may fight over the disposition of dependent territories is not in and of itself a pertinent bit of information except that periods of fighting among dominant states affords opportunities for the dependent states to break their dependent relationships.
To a dependency theorist, the central characteristic of the global economy is the persistence of poverty throughout the entire modern period in virtually the same areas of the world, regardless of what state was in control. Finally, there are some dependency theorists who do not identify capitalism as the motor force behind a dependent relationship. The relationship is maintained by a system of power first and it does not seem as if power is only supported by capitalism.
For example, the relationship between the former dependent states in the socialist bloc the Eastern European states and Cuba, for example closely paralleled the relationships between poor states and the advanced capitalist states. The possibility that dependency is more closely linked to disparities of power rather than to the particular characteristics of a given economic system is intriguing and consistent with the more traditional analyses of international relations, such as realism.
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There are a number of propositions, all of which are contestable, which form the core of dependency theory. Underdevelopment is a condition fundamentally different from undevelopment. The latter term simply refers to a condition in which resources are not being used. For example, the European colonists viewed the North American continent as an undeveloped area: Underdevelopment refers to a situation in which resources are being actively used, but used in a way which benefits dominant states and not the poorer states in which the resources are found.