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Classical Political Economy

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The Palgrave Handbook of the History of Human Sciences

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Abstract

This chapter informs about the method, analytical structure, and content of classical political economy, represented most prominently, in Britain, by authors such as Adam Smith and David Ricardo. It focuses attention on what is common to them especially in the theory of value and distribution. These economists explain all property incomes (in particular the rents of land and profits) in terms of the surplus product that obtains after all necessary means of subsistence, or wages, in the support of workers and all means of production used up in the course of production have been deducted from gross output levels. In conditions of free competition, the no-rent part of the surplus is distributed as profits at a uniform rate on all capitals (consisting of means of subsistence and of production) in the economy. The prices that support the given distribution of income are called “natural” prices or “prices of production.” Profits are the main source of saving alias investment, that is, the accumulation of capital, which together with technical progress and the growth of population decides about the pace at which the economy develops and grows.

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Acknowledgment

The author of this chapter is most grateful to the Munich Social Science Review (MSSR), New Series, for granting permission to adapt the paper on “Classical Political Economy” published in MSSR, vol. 2/2019, pp. 121–155, for the Palgrave Handbook.

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Authors and Affiliations

  1. Graz Schumpeter Centre, University of Graz, Graz, Austria

    Heinz D. Kurz

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  1. Heinz D. Kurz
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Correspondence to Heinz D. Kurz .

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Editors and Affiliations

  1. Victoria University, Melbourne, VIC, Australia

    David McCallum

Section Editor information

  1. Department of Sociology, Universitat Klagenfurt, Klagenfurt am Wörthersee, Austria

    Dieter Boegenhold

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Kurz, H.D. (2022). Classical Political Economy. In: McCallum, D. (eds) The Palgrave Handbook of the History of Human Sciences. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-16-7255-2_4

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