Menger in the work “Principles of Political Economy” (1871).
Antonovich proceeds from the fact that with the development of productive forces will increasingly achieve equality of participants in production – workers, capitalists and landowners, which will ensure everyone receives his share in production, ie will lead to the establishment of fair remuneration for labor.
Professor O. Bilymovych of Kyiv University was also a follower of the Kyiv Psychological School. In developing and propagating the ideas of the Austrian school, he rejects the labor theory of value and the corresponding theoretical concepts of Karl Marx. Bilimovich sees the merit of the Austrian school in the fact that it opposed the labor theory of value, so that all of Marx’s theoretical developments – the position of the dual nature of labor, labor as a commodity, value added – as well as the whole “theory of exploitation hung in the air.” In O. Bilimovich, value is a product of “evaluation activity of the subject.” He associates the value with the intensity of needs and on this basis determines the meaning of the concept of “marginal utility” by linking the degree of satisfaction of needs with the number of benefits.
Mikhail Ivanovich Tugan-Baranovsky (1865-1919) was a world-renowned scientist who made a huge contribution to the development of many theoretical problems in economics. The very list of his works and the issues he studied and whose research gained him worldwide recognition would take up many pages. He was born into a wealthy noble family in the Kharkiv province. Graduated in 1889 p. physics and mathematics and external – law faculties of Kharkiv University.
M. Tugan-Baranovsky emphasizes the anarchic nature of capitalist production, the disproportion in the placement of free money capital in various spheres of their application, which causes crises. He wrote that the cause of the crisis lies “in the accumulation and expenditure of social capital” for violating the proportionality of its distribution in different areas of capital.
According to M. Tugan-Baranovsky, the regulation of investments and their correct distribution, at least in the industries that produce capital goods, opens up opportunities for the boundless expansion of capitalist production. The investment theory of M. Tugan-Baranovsky’s cycles had a huge impact on the development of political economy. His work is not only still referred to by numerous Western European and American economists, but also fruitfully developed by his ideas. Keynes welcomed the theory of M. Tugan-Baranovsky. In particular, he almost completely accepted the idea of M. Tugan-Baranovsky on “savings – investment” as the main driving force of economic activity.
Deeply acquainted with various Western European economic schools, M. Tugan-Baranovsky, however, did not become a direct follower of any of them. A critical analysis of political and economic schools, and especially German historical and Austrian, as well as Marxist theory, allowed him to develop his own economic concept in the spirit of the progressive development of world economic thought.
Initially, M. Tugan-Baranovsky was a supporter of Marx. But later critical notes appear in his works. He did not accept the labor theory of value, called “fiction” labor value and “insignificant” category of value added. M. Tugan-Baranovsky denied the Marxist position that new value is created by labor. He calls the source of income all capital. However, he does not reject Marxism, but seeks to develop its scientific elements.
Recognizing Marx’s methodology, his ideas about the decisive role of economic phenomena in the development of society, M. Tugan-Baranovsky criticizes Marx for economic determinism, for ignoring the psychology of people, their morals.
In many studies: “The doctrine of the marginal utility of economic goods” (1890), “The main error of the abstract theory of capitalism K. Marx” (1898), “Essays on the recent history of political economy and socialism” ( 1903), “Theoretical foundations of Marxism” (1905), “Fundamentals of Political Economy” (1909) – the scientist tried to reorient political economy in Russia and Ukraine to the position of subjective-psychological school and neoclassicism.
As early as 1890, in The Doctrine of the Marginal Usefulness of Economic Goods as the Cause of Their Value, he made a comparative analysis of the classical and Austrian schools and stated the possibility of their synthesis. In the West, this idea was implemented by Marshall in the work “Principles of Economic Science” (1890), which marked the beginning of the neoclassical direction in political economy. Although Tugan-Baranowski’s and Marshall’s approaches to such a synthesis were not entirely identical, they testified to the unity of the scientific search of both prominent economists.
M. Tugan-Baranovsky paid great attention to the development of capitalism in Russia, which in the last decade of the XIX century. became the main theoretical issue in the country. In 1898 p. his doctoral dissertation “Russian factory in the past and present. Historical and economic research” was published. This work was highly praised by Western European economists (including I. Schumpeter).
History of economic thought. Textbook. – Kyiv, 2002. Subtelny O. History of Ukraine. – K., 1996. Ukrainian studies. In 3 volumes – K., 1994-1996. History of the economy of Ukraine and the world. Textbook. – Kharkiv, 2002.
Marginalism: origin and development. Abstract
Historical conditions of marginalism and its methodology. Austrian school of marginalism: the main research issues. Cambridge school of marginalism and the emergence of neoclassical analysis. American School of Marginalism and the Theory of Marginal Productivity. Mathematical school of economics. Lausanne School of Marginalism: The Search for General Equilibrium
Marginalism (from marginal – marginal), known as theories of marginal utility and marginal productivity, became an independent current of bourgeois political economy in the second half of the XIX century. The emergence of marginalism was due primarily to objective factors: the deepening division of labor, the expansion of the capitalist market, the growth of interdependence and competition between economic entities. The main function of the entrepreneur was to choose the right decision on the size of resources and sales, the level of market prices.
Theories of marginalism have become a form of reflection of the primary economic needs and aspirations of private entrepreneurs. In addition, the new trend performed an ideological function, contrasting its concepts of Marxism and opposing the labor theory of value.
Marginalism is characterized by a new methodology, the main features are as follows:
psychologization of economic analysis – the participation of the individual in economic processes is determined by psychological, subjective factors and assessments; subjective-idealistic approach – a look at the system of free enterprise by an isolated business entity; the principle of rational human behavior on the basis of their own, subjective ideas; non-historical approach – the subject of research is the same and eternal for any society (rational distribution of limited resources); primacy of exchange and consumption over production – the usefulness of the good can be assessed only by the consumer; the principle of rarity – the limited supply of a good, as a result of which the price becomes completely dependent on demand associated with subjective assessments; operation of limit values - marginal utility, marginal productivity; ideological neutrality of economic analysis – an attempt to build a theory of “pure economy” without taking into account political factors.
Marginalism was not a completely homogeneous current, it consisted of several schools – Austrian, Cambridge (English), American and Lausanne. Psychological motives of individual economic behavior, consumer demand, price – issues that were in the spotlight of economists of the Austrian school.
The ideas in tune with this school were put forward in parallel by the English theorist Vityam Stanley Jevons (1835-1882), who entered the history of economic thought as one of the first mathematical economists. A more complex motivated analysis of the interaction of price, supply and demand is characteristic of the works of Alfred Marshall (1842-1924), who headed the Cambridge School of Marginalism.
The problems of the efficiency of the use of factors of production and the distribution of the value of a product among their owners became central to the research of the American school presented by John Bates Clark (1847-1938). The founders of marginalism did not have a single position on what economic analysis should be – causal or functional. Economists of the Austrian school – the first and only – came up with the idea of establishing causal links between economic phenomena.
Theorists of the Cambridge and American schools, as well as economists-mathematicians, categorically denied this principle, considering only the functional relationships of the objects of analysis, regardless of which of them is the cause and which is the consequence.
In the concepts of the Austrian school the leading role is played by the subjective-psychological approach. Based on it, the Austrians sought to build a consistent, free from internal contradictions economic theory, aimed at studying causal interactions. Prominent representatives of this first large marginalist group were Karl Menger (1840-1921), Friedrich Wieser (1851-1926), and Eugen von Bem-Bawerk (1851-1914).
123helpme.meThe theory of value was transformed in their research into the theory of marginal utility (the first category “marginal utility” was introduced into scientific circulation by F. Wieser, while K. Menger, for example, operated with the category “finite intensity”) , the justification of which was given the most attention.
Prices, according to marginalists, do not depend on value, which is determined by labor costs, and not on consumer value (utility), but solely on subjective assessments of this utility, or rather – on marginal utility. Under marginal utility, they understood the subjective assessment of the usefulness of the last unit of stock of a particular consumer good. The main principles of the theory of marginal utility were formulated by K. Menger in the work “Principles of Political Economy” (1871).
In his opinion, the marginal utility of a good is determined by two factors – the intensity of individual needs and the rarity (or stock) of this good.