From the December 2015 issue of the Socialist Standard
The history of economic research came up as an independent science in the seventeenth century. However, that didn’t happen all of a sudden. Long ago since ancient times, the process of rudimentary conceptualization and formation of political economic ideas had begun cropping up. The ancient Egyptians, Greeks, Hindus and other peoples were already acquainted with such economic categories as commodity, exchange, money, price, loan interest, commercial profit, and others. There are very interesting ideas and data in ancient Egyptian papyri; the code of Hammurabi, the ruler of Babylonia; the Vedas of Ancient India; Homer’s Odyssey and other works of the ancient Greek poet; the writings of Xenophon, Plato, Aristotle and other philosophers of Greek antiquity, and so on. However, what the ancients knew about economic categories was just embryonic.
The history of economic thought begins with the works of Xenophon, Plato and especially Aristotle, who made the first step towards a theoretical understanding of the economy of the ancient Greek society (which was at the stage of demise of the primitive-communal system and the rise of slavery), and articulated some remarkable ideas on value, commodity exchange, and the earliest forms of capital: trading (merchant’s) and usury capital.
Capitalist structures first took shape not in production, but in trade and monetary operations in the late sixteenth and early seventeenth centuries. Eventually this evolutionary process of the upcoming capital came to be known as Mercantilism that expressed the interests of merchant’s capital in England, Italy and France. Its principal spokesmen were William Stafford (and Thomas Mun in England, Antonio Serra in Italy and Antoine de Montchrestien in France).
The term 'Political Economy' was first coined by the French mercantilist Antoine de Montchrestien in his Treatise of Political Economy (1615), which contained recommendations on how to run the state economy and multiply the country’s wealth. The term was derived from three Greek words: 'politikos' – state, social; 'òikos'- household or its management; and 'nomos' – rule of law, and so meant 'the laws of state management'.
Later on, in the eighteenth century, bourgeois political economy was developed by the Physiocrats: Francois Quesnay, Turgot, and others. François Quesnay was a French economist of the Physiocratic school. He is known for publishing Tableau économique (Economic Table) in 1758, which provided the foundations of the ideas of the Physiocrats. Turgot, Baron de l'Aulne, commonly known as Turgot, was a French statesman (and economist in his own right) heavily influenced by Quesnay.
In contrast to the mercantilists, they switched the emphasis in economic research from the sphere of circulation to the sphere of production.
Bourgeois political economy in that period [from the 17th century to the 1830s] was advanced by William Petty (1623 – 1687) in England and Pierre Boisguillebert (1646 – 1714) in France. They were the pioneers in formulating the labour theory of value. They were in effect the founders of classical political economy, which reached its peak in the works of the Scottish economist Adam Smith in the eighteenth century and the English economist David Ricardo in the early nineteenth century.
Karl Marx observed in 1859 in the section 'Historical Notes on the Analysis of Commodities' in A Contribution to the Critique of Political Economy: 'The decisive outcome of the research carried on for over a century and a half by classical political economy, beginning with William Petty in Britain and Boisguillebert in France, and ending with Ricardo in Britain and Sismondi in France, is an analysis of the aspects of the commodity into two forms of labour – use-value is reduced to concrete labour or purposive productive activity, exchange-value to labour-time or homogeneous social labour.' In Capital (1867) he defined political economy: '… by political economy I understand the economy which since the time of W. Petty has investigated the real relations of production in bourgeois society'.
Marx made a distinction between such men as Petty, Smith and Ricardo and their successors. He wrote of the former that they devoted their efforts 'to the study of the real interrelations of bourgeois production', while the latter were 'content to elucidate the semblance of the interrelations' and to act in effect as apologists for the capitalist class. He called them 'vulgar economists'.
Engels had already warned, and shown great foresight, in 1843 when he wrote in his Outlines of a Critique of Political Economy: 'The nearer to our time the economists whom we have to judge, the more severe must our judgment become. For while Smith and Malthus found only scattered fragments, the modern economists had the whole system complete before them: the consequences had all been drawn; the contradictions came clearly enough to light, yet they did not come to examine the premises and still accepted the responsibility for the whole system. The nearer the economists come to the present time, the further they depart from honesty'.