Analysis Of The Development Of Classical Economic Thought: From
Mercantilism
Daniel Alves
ECON 350 - Classical Economics
June, 2024
Introduction
Economic thought has developed over the centuries along with the development of human
civilization. One of the beginnings of economic thought was mercantilism which developed
in the 16th century to the mid-18th century. According to Nurske (1953) in his journal,
mercantilism was a a system of economic thought that emphasizes the need to increase a
country's gold and silver reserves by promoting exports and limiting imports1 .
This idea arose because traders and businessmen wanted to enrich themselves and their
nation. Therefore, the government's economic policy at that time emphasized efforts to
increase the surplus of the international trade balance. Despite many criticisms, mercantilist
thinking has become the forerunner of the development of modern economics23 .
After mercantilism, classical economic thought was pioneered by Adam Smith in 1776
through his book "The Wealth of Nations". Smith criticized mercantilism and argued that the
source of a nation's prosperity is not gold or silver, but productive labor. He also emphasized
the importance of a free market mechanism governed by the invisible hand4 .
Besides Adam Smith, another classical economic figure is David Ricardo, who is known for
his comparative advantage theory. Ricardo argued that countries should export goods that
have comparative advantages and import goods that lack these advantages. That way,
international trade can increase the prosperity of all countries involved in it5 .
Then came John Stuart Mill who perfected classical economic thought. He emphasized the
importance of government intervention in the economy to protect people from market failure
and achieve income equality.6 . Mill's thinking is considered to be a bridge between classical
economics and neo-classical economics.
In the mid-19th century, Marxist thought was born, which was diametrically opposed to
classical economics. Karl Marx and Friedrich Engels formulated an economic system and
social philosophy in their book Das Kapital. Marx's main idea was that capitalism would
eventually collapse due to class conflict between laborers and capital owners, and would be
replaced by socialism and communism7 . Karl Marx saw that the modern capitalist system is
characterized by the existence of a bourgeois class that owns capital and controls the means
of production, and a proletarian class that owns nothing but its labor. In this system,
capitalists try to maximize profits by keeping wages as low as possible and extending
working hours. As a result, the proletariat living in inequality and distress while the
bourgeoisie are getting richer8 . According to Marx, this conflict between social classes will
eventually trigger a proletarian revolution and the collapse of capitalism. A system of
socialism will then be built, where the means of production are collectively controlled for the
common prosperity. Ultimately, a communist society will be formed without classes, state, or
private ownership. Everyone will earn according to their ability and receive according to their
needs9 .
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
Overview
This literature review begins by detailing key concepts in mercantilism, drawing on works
such as "Wealth of Nations" by Adam Smith (1776) and "An Essay on the Principle of
Population" by Thomas Malthus (1798)10 . This is followed by analyzing John Stuart Mill's
contribution in Principles of Political Economy (1848), as an extension of classical thought.11
Furthermore, it explores Karl Marx's views on capitalism in "Das Kapital" (1867) and other
writings. Key references involve Marx's political economy thought and its influence on class
theory and alienation.12 This literature review details the conceptual shift from the labor
theory of value in classical economics to Marx's surplus value theory. Sources of reference
include the original works of classical thinkers, such as Ricardo, and interpretations and
analyses of Marx's theory of surplus value critical by modern economists, such as David
Harvey.
By combining these sources, this literature review forms a strong theoretical foundation for
understanding the evolution of economic thought from mercantilism to Marxism, enriching
the understanding of the contribution of each school in understanding the structure and
dynamics of the economy.
Mercantilism:
This analysis highlights how economic thought developed from mercantilism to Marxism,
illustrating the key role of classical thinkers and how Marx's views enriched and questioned
the established foundations. Through a deductive narrative approach, the study illustrates the
theoretical foundations that lead to a deeper understanding of economic structures and
dynamics.
Economic thought has undergone significant development throughout history, reflecting the
social, political and economic changes of its time. This study provides an in-depth theoretical
overview of the evolution of economic thought from mercantilism to Marxism, detailing the
main contributions of classical thinkers and the transition towards the Marxian paradigm.
Mercantilism and Foundation Building (16th-18th Century):
Mercantilism, as the dominant economic paradigm in the 16th to 18th centuries, emphasized
the wealth of nations in the form of gold and silver. Adam Smith's contribution in An Inquiry
into the Nature and Causes of the Wealth of Nations (1776) exposed the limitations of
mercantilism. Smith defended the idea of free markets and asserted that a country's wealth
depended not only on its gold hoard, but on productivity and free trade.
Early Classical Contributions: Malthus and Ricardo (Late 18th Century):
With the emergence of Malthus' thoughts in "An Essay on the Principle of Population"
(1798), the focus of economic debate shifted to the issue of population growth and limited
resources.21 Ricardo, through his "Principles of Political Economy and Taxation" (1817),
brought the concept of labor value, exploring the relationship between wages and profits,
forming the foundation of classical economics.22
The Thought of John Stuart Mill (Mid-19th Century):
John Stuart Mill brought significant changes in "Principles of Political Economy" (1848). He
introduced the concept of utility, recognizing the importance of subjective happiness in
economic analysis. Mill also argued for social policy and government intervention to address
inequality and poverty, illustrating a shift towards a more humanist view.
Transition to Marxism (Late 19th Century):
Karl Marx, through "Das Kapital" (1867), changed the economic paradigm by introducing the
theory of surplus value and historical materialism. Marx highlighted class conflict and argued
that capitalism bases its success on the exploitation of workers. Friedrich Engels
complemented Marx's thinking by linking it to the social and historical dimensions.
Contemporary Analysis: Harvey and Piketty (20th and 21st Centuries):
David Harvey brings Marx's thought into the context of geography and urbanization,
providing analysis relevant to modern economic dynamics.25 Thomas Piketty, with "Capital
in the Twenty-First Century" (2014), again shakes up the discussion with research on
economic inequality, bringing together classical and Marxian thought by detailing the
dynamics of contemporary capitalism.26 Winch (2017) outlines the periodization of the
development of economic thought into pre-modern (mercantilists, physiocrats), classical
(Smith, Ricardo, Marx), neo-classical (Jevons, Menger), and contemporary (Keynes,
Friedman, Piketty). Each phase of thought reflects the socio-political challenges faced in its
time. According to Reinert (2011), mercantilism was born with the need for European
monarchies to find sources of income to finance wars and territorial expansion. The
accumulation of gold/silver through trade surpluses became the dogma of this early thinking.
Heckscher (1955) saw that mercantilist ideas were heavily influenced by the geopolitical and
demographic situation of Europe in the 15th century. Zuidhof (2014) attributes the beginnings
of classical economics, especially the writings of Adam Smith, to the need for ideological
justification for the emergence of the capitalist system. Smith's ideas about the market
mechanism and the role of the rational individual provided the justification for capital
accumulation and the ethos of capitalism (Hill, 2017).
The timing of the publication of Das Kapital (1867) is inseparable from the momentum of the
industrial revolution in 19th century Europe that led to the exploitation of the working class
by factory owners (Wheen, 2007). The concentration of wealth in the hands of the urban
bourgeoisie created new inequalities that gave birth to class consciousness in the urban
proletariat, triggering Marx and Engels' radical notion of class struggle (McLellan, 1973). In
the deadlock of the debate between Marxian socialism versus classical liberalism, a third
alternative emerged from John Stuart Mill (Winch, 2018). By integrating aspects of Marxist
justice/equality into the classical individualism-utilititarism framework, Mill sought to bridge
the gap between the two schools (Baum, 1991).
Here we can see the evolution of economic thought as a reflection of changes in social and
political paradigms. From mercantilism that emphasized material wealth, through classical
thought that explored the value of work and utility, to its culmination in Marxism that evoked
an understanding of class exploitation. Contemporary analysis by Harvey and Piketty extends
this framework into modern socio-economic realities. Overall, this study provides a
comprehensive view of the theoretical evolution of economics and how classical and Marxian
thought provide a foundation for understanding current economic dynamics.
Results And Discussion
Based on the literature review and theoretical studies that have been carried out, several
important things can be concluded regarding the development of classical economic thought
from mercantilism to Marxism. First, mercantilism, which developed from the 16th to the
mid-18th century, was a milestone in the birth of modern economics. Despite much criticism,
some of the basic principles of mercantilism such as trade surplus as a source of prosperity
remain relevant today. Second, through his monumental work "The Wealth of Nations",
Adam Smith succeeded in shifting the dominant paradigm of his day which centered on the
accumulation of precious metals. Smith emphasized that the real source of wealth comes
from labor productivity and the important role of free market mechanisms. Third, David
Ricardo enriched Smith's thinking with the concept of comparative advantage to explain the
benefits of international trade for all countries. Meanwhile, John Stuart Mill refined classical
thinking by including utility and the role of state intervention to overcome market failures.
Fourth, Karl Marx made a scathing criticism of the capitalist system through his book "Das
Kapital". According to Marx, capitalism is based on the exploitation of laborers by capital
owners in order to achieve maximum profits. He predicted that capitalism would eventually
collapse and be replaced by socialism and communism.
Thus, economic thought evolved from the labor value system in classical economics to the
Marxian surplus value theory. While classical economists such as Smith and Ricardo focused
on the productivity of factors of production and economic growth, Karl Marx focused on the
issue of inequality and class theory in his analysis. Friedrich Engels strengthened Marx's
analysis by linking it to historical and sociological dimensions. Meanwhile, modern
economists such as David Harvey and Thomas Piketty attempt to actualize Marx's thought to
explain contemporary political-economic issues such as global wealth inequality.
The main finding of this study is that although there are many differences, the thoughts of
classical economists and Marx are substantially complementary. A thorough understanding of
the structural dynamics of modern political economy requires a multidisciplinary approach
that combines the views of Smith, Ricardo, Marx, and Piketty in a complementary manner.
The relevance of the study results for the United States context is that it can provide
inspiration in formulating economic policies that are fairer and in favor of the people. For
example, by applying the principle of government intervention promoted by John Stuart Mill
to correct market failures due to the dominance of a handful of conglomerates. Or by
integrating Marx's class analysis to ensure that economic policies do not only favor capital
owners, but also protect the rights of workers and the common people. Thus, the thoughts of
classical economists and Marx remain relevant in United States today.
More specifically, some policy recommendations that can be derived from the results of this
study include:
Encourage local resource-based manufacturing and processing industries instead
of relying on raw commodity exports. This is in line with the views of Adam
Smith and David Ricardo on the importance of productivity and competitiveness
of national industries.
Introduce progressive taxation and redistribution schemes to address income
inequality between classes. This step is in line with John Stuart Mill and Marx's
idea of the need for state intervention for social justice.
Ensure a decent provincial minimum wage (UMP) that meets the needs of a
decent life and encourage collective labor agreements between workers and
employers. This policy is important to protect workers' rights from a Marxian
perspective.
Supervise and control the prices of commodities and basic needs of the people to
prevent inflation due to monopolistic behavior of companies. This intervention is
necessary to correct market failures as Mill points out.
By implementing these policy recommendations, United States is expected to realize
inclusive economic growth and social justice. The values of integrity, balance and justice that
animated the thinking of classical economists to Marxians can be used as a philosophical
basis for national economic development.
Of course, this study is not free from various limitations. First, the historical review presented
is descriptive in nature and has not conducted an adequate critical analysis of the relevance of
the ideas of previous economists for the actual situation. Secondly, the policy
recommendations provided are still normative and need to be further examined for their
empirical feasibility if applied in the United States context. Econometric tests or field studies
are needed to strengthen the validity of these recommendations. Third, limited data and
information on a number of Specific aspects discussed such as the current condition of the
United States labor market limit the scope of the discussion. More detailed research with a
limited scope is needed to produce a sharper analysis.
Therefore, further research is highly recommended to overcome the limitations of this study.
Some suggestions for further research topics include: (1) empirical studies to test the
relevance of Smith, Ricardo, and Marx's views in the context of the United States economy;
(2) evaluation of United States actual economic policies from the perspective of classical and
Marxian economic theory; (3) field research related to the current condition of United States
laborers and the level of exploitation experienced.
Hopefully, with further research, new insights can be gained to enrich the repertoire of United
States economics and public policy to be more just and prosperous. The thoughts of classical
economists and the visionary Karl Marx can be used as inspiration to realize the ideals of
shared prosperity in the country.
Conclusions
Economic thought has grown and developed over time, embodied in the theories and ideas of
previous economists until now. Mercantilism in the 16th-18th centuries, which focused on the
accumulation of wealth through trade, was later sharply criticized by Adam Smith through his
work The Wealth of Nations. He stated that the real source of prosperity comes from labor
productivity, and the interaction of individual economic actors will automatically ensure the
achievement of collective welfare. David Ricardo complemented it with the concept of
comparative advantage, while John Stuart Mill added the dimensions of the role of the state
and moral aspects.
Later, Karl Marx radically criticized the classical free market mechanism by highlighting the
problems of exploitation and inequality it caused. He predicted that capitalism would
eventually collapse and be replaced by a socialist system. Marx's ideas were then reinforced
by Friedrich Engels from the dimensions of history and sociology. Then in the 20th-21st
centuries, economists such as David Harvey and Thomas Piketty attempted to actualize
Marx's point of view to analyze the phenomenon of urban and global economic inequality
today. Thus, the various theories complement each other in an effort to understand the
changing socio-economic-political dynamics over time. This understanding is important in
order to formulate the right policies for contemporary United States.
