The Structure of Classical Theory

Classical economics is a term invented by Marx to characterise all economists beginning with William Petty (1623–1687) in England and Pierre Le Pesant de Boisguilbert (1646–1714) in France, and ending with Ricardo in England and Simonde de Sismondi (1773–1842) in France. According to Marx, the focus of classical economists was the determination of the surplus (value), defined as the difference between the value of total output produced and the value of (labour and non-labour) inputs used in production. The evaluation of inputs and outputs is in terms of prices, determined mainly by labour times. Furthermore, classical economists share the view that labour employed in production (in general) is responsible for the creation of surplus. Hence, some caution should be applied because Marx excluded, from his characterisation of classical economics, major economists such as Thomas Malthus (1706–1834) and John Stuart Mill (1806–1873), who not only questioned the validity of the labour theory of (exchange) value but also were eager to replace it with the ephemeral forces of supply and demand. Marx has also used the term ‘vulgar economists’ to refer to those whose analysis was based on the surface phenomena of supply and demand.