Editing Classical economics (section)

== History ==
The classical economists produced their "magnificent dynamics"<ref name=":1">Baumol, William J. (1970) ''Economic Dynamics'', 3rd edition, Macmillan (as cited in Caravale, Giovanni A. and Domenico A. Tosato (1980) ''Ricardo and the Theory of Value, Distribution and Growth'', Routledge & Kegan Paul)</ref> 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.<ref>{{cite book
  | last1 = O'Sullivan
  | first1 = Arthur
  | author-link = Arthur O'Sullivan (economist)
  | first2 = Steven M. | last2 = Sheffrin
  | title = Economics: Principles in Action
  | publisher = Pearson Prentice Hall
  | year = 2003
  | location = Upper Saddle River, NJ
  | page = 395
  | isbn = 0-13-063085-3}}</ref>

Classical economists and their immediate predecessors reoriented economics away from an analysis of the ruler's personal interests to broader national interests. [[Adam Smith]], following the [[physiocrat]] [[François Quesnay]],<ref>{{Cite book |last=Bertholet |first=Auguste |url=https://www.sgeaj.ch/wp-content/uploads/2024/12/bertholet-kapossy-la-physiocratie-et-la-suisse-2023.pdf |title=La Physiocratie et la Suisse |last2=Kapossy |first2=Béla |publisher=Slatkine |year=2023 |isbn=9782051029391 |location=Geneva |language=fr}}</ref> 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]], [[Economic rent|rent]], and [[interest (economics)|interest]] or profits. In his vision, [[Productive and unproductive labour|productive labour]] was the true source of income, while capital was the main organizing force, boosting labour's productivity and inducing [[Economic growth|growth]].

Ricardo and [[James Mill]] systematized Smith's theory. Their ideas became economic orthodoxy in the period ca. 1815–1848, after which an "anti-Ricardian reaction" took shape, especially on the European continent, that eventually became [[Marginalism|marginalist]]/neoclassical economics.<ref>Screpanti and Zamagni (2005), pp. 100–04.</ref> The definitive split is typically placed somewhere in the 1870s, after which the torch of Ricardian economics was carried mainly by [[Marxian economics]], while neoclassical economics became the new orthodoxy also in the English-speaking world.

[[Henry George]] is sometimes known as the last classical economist or as a bridge. The economist [[Mason Gaffney]] documented original sources that appear to confirm his thesis arguing that [[neo-classical economics|neoclassical economics]] arose as a concerted effort to suppress the ideas of classical economics and those of Henry George in particular.<ref>{{cite book | last = Gaffney | first = Mason | title = The corruption of economics | publisher = Shepheard-Walwyn in association with Centre for Incentive Taxation | location = London | year = 2006 | isbn = 0856832448 | url = http://w.masongaffney.org/publications/K1Neo-classical_Stratagem.CV.pdf | access-date = 2014-12-06 | archive-url = https://web.archive.org/web/20150612095955/http://w.masongaffney.org/publications/K1Neo-classical_Stratagem.CV.pdf | archive-date = 2015-06-12 | url-status = dead }}</ref>

=== Modern legacy ===
Classical economics and many of its ideas remain fundamental in economics, though the theory itself has yielded, since the 1870s, to neoclassical economics. Other ideas have either disappeared from neoclassical discourse <!-- Post-Keynesians especially advocate this; see section below on debate & Sraffans, and lectures by Steve Keen on history of economics --> or been replaced by [[Keynesian economics]] in the [[Keynesian Revolution]] and [[neoclassical synthesis]]. Some classical ideas are represented in various schools of [[heterodox economics]], notably [[Georgism]] and [[Marxian economics]] – Marx and [[Henry George]] being contemporaries of classical economists – and [[Austrian economics]], which split from neoclassical economics in the late 19th century. In the mid-20th century, a renewed interest in classical economics gave rise to the [[Neo-Ricardianism|neo-Ricardian school]] and its offshoots.