History
The classical economists produced their "magnificent dynamics" during a period in which capitalism was emerging from feudalism and in which the industrial revolution was leading to vast changes in society. These changes raised the question of how a society could be organized around a system in which every individual sought his or her own (monetary) gain. Classical political economy is popularly associated with the idea that free markets can regulate themselves.
Classical economists and their immediate predecessors reoriented economics away from an analysis of the ruler's personal interests to broader national interests. Adam Smith, and also physiocrat Francois Quesnay, for example, identified the wealth of a nation with the yearly national income, instead of the king's treasury. Smith saw this income as produced by labour, land, and capital. With property rights to land and capital held by individuals, the national income is divided up between labourers, landlords, and capitalists in the form of wages, rent, and interest or profits.
Read more about this topic: Classical Economics
Famous quotes containing the word history:
“In every election in American history both parties have their clichés. The party that has the clichés that ring true wins.”
—Newt Gingrich (b. 1943)
“Well, for us, in history where goodness is a rare pearl, he who was good almost takes precedence over he who was great.”
—Victor Hugo (1802–1885)
“As History stands, it is a sort of Chinese Play, without end and without lesson.”
—Henry Brooks Adams (1838–1918)