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In the development of Saint-Simon's teachings, four stages can be
distinguished.
1) 1814–1815 — cult of science and scientists, abstract humanism. Socio-
economic ideas are present only in embryo;
2) mature works in the last 10 years of life. Ideas:
- opposes capitalism, demands its replacement with a new social system, in
which competition and anarchy, the antagonism of people will be replaced by their
cooperation;
- the change of the social system must be peaceful, without revolutions;
- society is divided into 2 classes: 1 — feudal owners, nobles, clergy, officials,
their incomes are parasitic; 2 — industrialists (96 % of the population): peasants,
workers, artisans, manufacturers, merchants, bankers, artists, scientists, i.e. people
engaged in socially useful activities, their income is labor;
- he did not speak out against private property, he believed that it needed to be
improved and taken under the control of society;
3) the flourishing of Saint-Simonism in the works of his followers. At this
stage, the doctrine acquires clearly socialist features: demands are put forward for the
elimination of private property, distribution according to work and ability, and
production planning;
4) the collapse of the teaching — since 1831. The teaching acquired a religious
overtone: The Saint-Simonist church was organized, Saint-Simon's students united in
a religious commune, which even had its own uniform (vests were fastened at the
back). A dispute arose about the place of women in this commune, and therefore the
authorities organized a trial against the Saint-Simonists, accusing them of immorality.
After this, the movement ceased to exist.
Robert Owen (1771–1858) was an English utopian socialist.
Born into the family of a small shopkeeper, he studied in fits and starts, mostly
on his own. Then, showing entrepreneurial spirit, he became a co-owner of a textile
factory and married the daughter of a wealthy manufacturer.
Author of the book "A New View of Society, Or, Essays on the Principle of the
Formation of the Human Character, and the Application of the Principle to Practice"
(1813).
In the village of New Lenark, Owen conducted an experiment: he created basic
human working conditions for workers, after which labor productivity increased and
relations at the factory and in the village improved.
Such an experience did not satisfy Owen, since it was an isolated one.
Therefore, Owen began to develop the idea of restructuring the entire society on

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communist principles. He criticized private property, religion, family. He sent his
proposals to the governments of America, England, the Russian Tsar Alexander I,
and the bankers of France. But they didn’t answer him.
Disappointed, Owen leaves for America, where, having bought a plot of land,
in 1825 he created "the New Harmony" community. But this community ruined him.
He goes back to England (in 1829) and then lives modestly.
But a quiet life is not to his taste. In 1932, Owen organized the Fair Labor
Exchange. He accepted and sold goods at labor cost. The exchange soon went
bankrupt.
In 1833–1834 Owen becomes the founder of the trade union movement in
England. There were about 500 workers in the union. But soon, through the efforts of
the government and manufacturers, this experiment was also failed. Owen made no
further attempts to rebuild society.
Owen was more of a practitioner of socialism. But his works touch on
theoretical problems. He wrote that the exchange must be based on labor costs,
money must be abandoned, private property must be eliminated, labor must be
introduced for everyone, distribution according to needs. The property unit is a small
cooperative community; there is a division of labor between communities.
The teachings of R. Owen served as the basis for the communist teachings of
K. Marx.
Charles Fourier (1772–1832) was a French utopian socialist.
He grew up in a merchant's family. His father died early. He really did not like
trade, but was forced to engage in it. He took part in the revolution, was in prison,
served in the army, worked a traveling salesman, and a commercial broker.
In 1829 he published his main work, "The New Industrial and Societary
World". It outlines the principles of structure and ways to solve everyday problems of
the new society.
He divided the history of mankind into 32 periods, the main of which were 3:
- periods preceding productive activity;
- fragmented, deceptive, repulsive production;
- societal, truthful, more attractive production.
The second period is slavery, feudalism and capitalism. The main goal of
capitalism is profit and the struggle for profit. This gives rise to exploitation. Fourier
criticizes the moral relations generated by capitalism and offers fantastic plans for a
harmonious structure of society, where all people will be happy.
Fourier had no followers. He died alone.

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So, the utopian socialists criticized capitalism and proposed ideas for socioeconomic transformation through peaceful means (either with the assistance of the
government, or with the help of the private initiative of the working people
themselves).
7.4. Historical school in political economy
At the beginning of the 19th century Germany was fragmented into many
states, separated by customs barriers and duties. It lagged significantly behind
England and France. Industry was weak. In Western Europe, A. Smith's doctrine of
free market and international trade dominated. But this infringed on the interests of
backward Germany and doomed it to dependence on England and France.
The most enlightened figures and thinkers in Germany were looking for their
own, special way to form a capitalist economy. They saw the sources of this path in
the history of the nation, in its traditions and customs. The idea of a strong Germany
and its superiority over other nations was cultivated.
All this led to the emergence of a historical school, which subsequently became
the basis of a new historical school, neoliberalism and institutionalism.
Friedrich List (1789–1846) — German politician, entrepreneur, publicist,
founder of the historical school.
Born into a family of artisans, he was an official, a teacher of law, fought for
democratic reforms, was in prison, emigrated to the USA, was an entrepreneur,
farmer, newspaper editor, lived in France (where he studied political economy). In
1841 he wrote his main book, "The National System of Political Economy", which
had a strong impact on the economic thinking of theorists and government
practitioners. At the same time, in his political activities he had many opponents and
enemies. He was not rich, experienced constant dissatisfaction, and in 1846 he
committed suicide.
Ideas:
1. Germany must unite against the industrial dominance of England.
2. English political economy is too general, abstract and cannot serve as the
basis for the development of the economy of a particular country. We need a national
political economy that takes into account the characteristics of the country and its
history.
3. Wealth is not just the amount of values, but the degree of development of
productive forces, primarily in industry, which depends on the history of the nation,
the heritage of past generations, the geographical location of the country, natural

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resources, population, etc. The main thing is not to produce more material values, but
to "economically educate the nation".
4. List considered productive labor to be labor not only in material production
(like the classics), but also in the fields of science, art, education, management, etc.
5. The history of society develops evolutionarily, passing through 5 stages: the
state of savagery, pastoral society, agricultural society, manufacturing-agricultural
society, trade-manufacturing-agricultural society. The last stage indicates the normal
state of society. But only those nations that have appropriate territories, natural
resources, and a temperate climate can achieve it. Germany doesn't have
enough territory.
6. The state must play an active role in organizing the economy: develop
industry, the national economy, and pursue protectionist policies so that the country
gets ahead compared to other countries. The strengthened economy no longer needs
state protection.
List cited as an example the history of Russia from the 17th to the mid-18th
centuries, which showed what a powerful influence the national unity and political
structure of the country had on its economic success.
In the process of evolution of the historical school of Germany in economic
literature two stages are usually distinguished:
Stage 1 — old historical school (40–60s of the 19th century): Wilhelm
Roscher, Bruno Hildebrand, Karl Knies.
Stage 2 — new historical school (70–90s of the 19th century): Louis Brentano,
Gustav Schmoller, Willy Sombart, Adolf Wagner, Max Weber.
The merit of the historical school lies in the fact that in the field of research of
political economy, along with economic ones, non-economic factors (traditions,
customs, moral norms) were also included; in the historical context, the whole variety
of socio-economic problems, the whole set of social relationships were incorporated.
TOPIC 8. MARXISM IN POLITICAL ECONOMY
8.1. Historical conditions for the emergence of Marxism
Marxism arose in the 1840s. At this time, Europe was experiencing rapid
growth in capitalist production. By that time, the industrial revolution had ended in
England. Capitalism also developed rapidly in Germany, France, the USA, and
Russia. The industrial revolution marked an accelerated development of production

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forces unprecedented throughout previous history, expressed in the transition from
manufacture to a factory system based on the widespread use of machine technology.
However, capitalism showed not only its economic superiority over the
previous mode of production, but also the contradictory nature of its development:
1. An ever-increasing conflict between labor and capital. The thirst for profit
forced the capitalists to use any means of increasing it: the working day was
lengthened, the intensity of the workers’ labor increased, the workers received
meager wages. There were spontaneous protests by workers, developing into
revolutionary forms of struggle.
2. Crises of overproduction of goods. They led to the shutdown of factories and
factories, unemployment, and poverty.
The aggravation of social and economic contradictions of capitalism gave rise
to the need to create a new scientific theory. (The classical political economy of
Smith and Ricardo did not provide answers to the questions that arose, since in their
time capitalism was still in early maturity and showed mostly progressive results.)
This theory was developed by the German scientists Karl Marx and Friedrich Engels.
Karl Heinrich Marx (1818–1883) was born into a lawyer's family and was the
second of nine children. He studied at the universities of Bonn and Berlin, and
received a Doctor of Philosophy degree. Lived in Paris, Brussels, London. All his life
he wrote works on social sciences, while experiencing severe material need. His
friend F. Engels helped him publish works and financially support his family.
Main works: "Das Kapital", "A Contribution to the Critique of Political
Economy", "Economic and Philosophic Manuscripts", "Critique of the Gotha
Programme".
Friedrich Engels (1820–1895) was the son of a large manufacturer, then
became a manufacturer himself. But despite this, he was on the side of the working
class. Together with K. Marx, he wrote many works on economics, philosophy and
sociology.
Main works: "The Condition of the Working Class in England", "AntiDühring", "The Origin of the Family, Private Property and the State".
Joint works of Marx and Engels: "The Poverty of Philosophy", "Wage-labor
and Capital", "German Ideology".
Marx and Engels were engaged not only in theoretical, but also in
revolutionary work: they organized the International Workers' Association and gave
advice on waging the revolutionary struggle.

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8.2. Marxian concept of social development
The doctrine developed by Karl Marx and Friedrich Engels was a holistic
worldview based on three sources:
1) classical political economy of Smith and Ricardo — Marxism developed
their theories of labor value, profit, rent, etc.;
2) the German classical philosophy of Hegel and Feuerbach — served as the
source of the Marxian teaching on dialectics and materialism;
3) French utopian socialism — served as the basis for a sociological analysis of
society and gave ideas for its social reconstruction.
In addition, Marx and Engels analyzed and critically re-interpreted many works
devoted to the social structure at different stages of human history.
The main position of Marxism is that the method of production of material
goods is the basis of the existence and development of society and affects all its
aspects (social, spiritual, political, cultural, etc.).
Production method includes:
1) productive forces — the complex of the means of production and labor
force; they are the driving force behind the development of society;
2) relations of production — the material basis that determines changes in the
superstructure of society: law, politics, religion, etc.
Production relations must correspond to the level of development of the
productive forces. If production relations become outdated and lag behind the level of
productive forces, stagnation and regression begin in society in all spheres. Under
these conditions, revolutionary changes are necessary.
Marx and Engels identified 5 methods of production that corresponded to
different stages of development of human history:
1) community;
2) slave-owning;
3) feudal;
4) capitalist;
5) socialist (communist).
The capitalist mode of production was subjected to especially careful analysis.
Marx came to the conclusion that under capitalism there is no correspondence
between productive forces and production relations. Production relations, represented
by private ownership of the means of production, conflict with the social nature of
this production. Hence the need for a social revolution, which must establish public
ownership of the means of production and eliminate the exploitation of man by man.

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It is necessary to note the very harmonious, strict logic of Marx’s research, a
very deep theoretical analysis, and a truly scientific methodology in his works.
Marxism gave many new useful ideas that are used by modern researchers.
8.3. Economic ideas of K. Marx
Economic teaching in the works of K. Marx is the most important.
Political economy, according to Marx, is a science that studies the production
relations of people, the laws of development of social production, distribution and
consumption of material goods at various stages of human development.
Marx called the main methods of studying political economy — the method of
scientific abstraction and the method of dialectical unity of the historical and logical.
He developed the doctrine of production, distribution and consumption, while
proving the dominant role of production.
The main economic work of K. Marx is "Das Kapital". It consists of
4 volumes.
Volume 1 — "The Process of Production of Capital".
Marx begins his analysis with the commodity, an elementary cell of capitalist
society.
The product has two sides:
- use value (utility) — the property of a thing to satisfy any need;
- cost — the amount of socially necessary working time in the conditions of
existing socially normal production.
Marx saw the reason for the existence of these aspects of the commodity in the
dual nature of the labor spent on creating the commodity:
- on the one hand, this labor is of a concrete nature and in this capacity creates
use value and utility;
- on the other hand, labor is abstract in nature — it is qualitatively
homogeneous human labor, impersonal and comparable to the labor of another
person; is a source of value.
Marx considered this discovery to be the main thing in his book.
Cost is the basis for determining price. Marx thoroughly analyzed the forms of
value, ranging from simple, random, and ending with money.
Money, according to Marx, is the universal equivalent and universal
embodiment of wealth. Money performs 5 functions: a measure of value, a medium
of exchange, a means of accumulation, a means of payment, world money.

78
The central part of Marx's theory is the doctrine of surplus value. The worker
sells to the capitalist not his labor, but his labor power, which has the ability to create
value greater than it is worth. The capitalist pays the worker the value of his labor
power in the form of a salary, and appropriates the additional value for himself. This
is the essence of exploitation, and the law of surplus value is the main law of
capitalism.
Volume 2 — "The Process of Circulation of Capital".
Marx analyzes the movement of capital, shows its turnover and circulation.
Marx's analysis of social production is of great importance for economic
science. He examined the conditions and proportions of exchange between two
divisions of production: the production of means of production (I division) and
production of consumer goods (II division). Based on the results of an analysis of the
circulation of capital, he made a very important conclusion for science that the basis
of periodic crises in the economy is the massive renewal of fixed capital.
Volume 3 — "The Process of Capitalist Production as a Whole".
Marx showed how surplus value turns into profit, the rate of surplus value into
the rate of profit, for which there is a fierce struggle between capitalists. As a result
of intersectoral competition, the rate of profit turns into an average rate of profit, and
each capitalist receives an equal profit on his equal capital.
Marx also analyzes the forms of capital: commercial and banking (loan).
Marx studied the pattern and nature of land rent, especially emphasizing
absolute rent, which is formed on all plots of land, regardless of its quality.
Marx identified the tendency of capitalist accumulation. It is characterized by
enormous concentration and centralization of capital, which require an appropriate
form of ownership.
Volume 4 — "Theories of Surplus Value".
It contains an extensive overview and analysis of most of the economic
teachings that existed before Marx.
In his research, Marx focuses on capitalist production, since it already existed
and there was material for analysis. Socialism, according to Marx, is the future
society; one could only assume its main features. Many of Marxian assumptions did
not come true:
1) Marx assumed that the impoverishment of the workers would lead to them
committing a revolution. However, history has shown that even under capitalism,
society was able to find opportunities for compromise between capitalists and
hired workers;
2) Marx and Engels categorically rejected private property. However, private
property effectively exists to this day;

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3) Marxists predicted the complete disappearance of commodity-money
relations that still exist;
4) Marxism proposed distribution according to work and needs. But needs are
limitless, their growth outstrips production, so their complete satisfaction is
impossible. Distribution by work is also problematic, since it is quite difficult to
compare and measure different types of work.
However, many of the provisions of Marx's teachings can be used and in
modern research.
8.4. The place of Marxian teaching in economic theory
Marxism throughout the 20th century. was one of the most popular and the
strongest currents of socio-political and economic thought. Many countries tried to
implement its provisions in practice, building socialism.
It should be recognized that even now much of Marx’s teaching is used in
science and socio-political life. Even countries in which capitalism is developing today
use elements of socialism. Thanks to socialist thought, capitalism has changed for the
better: trade unions, social policies, state control, etc. have appeared. Thus, we can say
that socialism is developing, but not in a revolutionary, but in an evolutionary way.
The American economist P. Samuelson names three great economists who will
remain in the memory of mankind: A. Smith, K. Marx, J. M. Keynes.
Literally all economists and politicians use Marx’s teachings.
8.5. Marxism in Russia
Marxism began to spread in Russia immediately after its recognition in the
West.
The formation of Marxian views in Russia was associated with the translation
into Russian of "Der Kapital" and other works of Marx and Engels.
Lopatin German Aleksandrovich (1845–1918) — Russian revolutionary
democrat, the first translator of "Der Kapital", was familiar with Marx and Engels.
Ziber Nikolai Ivanovich (1844–1888) — professor at Kyiv University,
propagandist of Marxism in Russia.
Populism was an influential movement in Russia at the end of the 19th century.
There were several trends in populism:

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1. Revolutionary populism.
They criticized capitalism as a system that could not ensure the well-being of
society. The most favorable way to meet the needs of the people, in their opinion,
was socialism. But not the socialism with the dictatorship of the proletariat that was
preached by K. Marx and then V. I. Lenin. Populist socialism is a peasant
community.
The populists considered Russia a special country, unique in its historical path
and national character. This uniqueness will allow Russia to transcend capitalism and
enter socialism through the peasant community.
Several trends can be distinguished in revolutionary populism:
1) educational or propaganda. It was headed by Pyotr Lavrovich Lavrov
(1823–1900), a comrade-in-arms of A. I. Herzen, N. G. Chernyshevsky, was familiar
with K. Marx.
We need to go to the villages, teach the people to read and write, and educate
them politically. When the people become literate and enlightened, under the
leadership of the revolutionary party they themselves will make a revolution;
2) anarchist, which was headed by Mikhail Aleksandrovich Bakunin (1814–
1876).
In his articles, he argued that the Russian people are by nature a rebel, an
innate revolutionary, and they should only be pushed to revolt. He rejected state
power and believed that the state, by its very existence, deprives the people of
freedom;
3) conspiratorial. It was headed by Pyotr Nikitich Tkachev (1844–1885).
He believed that it was necessary to create a group of well-trained professional
revolutionaries who would organize conspiracies against the tsarist government and
rouse the common people to revolution.
2. Liberal populism.
These were mainly representatives of the scientific intellectuals, economists:
Alexander Ivanovich Chuprov, Alexander Sergeevich Posnikov, Nikolai Alekseevich
Kablukov, N. F. Danielson, V. P. Voronov and others.
Some scientists (for example, N. A. Kablukov) believed that it was necessary
to organize connections between landowner and peasant farms and eliminate
contradictions between them.
Many of the liberal populists (for example, A. I. Chuprov) shared some of the
views of Marxism, but believed that Marxism could only be applied in Western
countries.
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