Vulgar Political Economy

Also known as “bourgeois vulgar political economy”. Formed at the end of the 18th century and the beginning of the 19th century, it mainly refers to the anti-scientific bourgeois economic theoretical system which does not analyze the internal relations and fundamental laws of capitalist relations of production theory, but only depicts the surface phenomena and external relations of social economy and specifically defends the capitalist system. The industrial revolution in the late 18th century brought about revolutions in the whole mode of production of the Western society, and the class structure of capitalist society has been defined as the three classes of workers, capitalists and landlords in which the contradictions between them are becoming increasingly obvious. Vulgar political economy originally appeared in the guise of explaining and spreading classical political economy, and Malthus of England and Say of France were the founders of vulgar political economy. Starting from safeguarding the interests of the bourgeoisie, this current replaced the labor theory of value with the utility theory of value, concealed the real source of profit, obliterated class contradictions, denied the law of social development, regarded capitalism as the most perfect, harmonious and reasonable social system, and attacked Marxist political economy. Say held that wages, profit and rent each had their own source, and that there was no class antagonism between the three, while Malthus claimed that the poverty of the working people was caused by “over-population”. After 1830s, bourgeois economics no longer recognized the labor theory of value, and thus refused to reveal the intrinsic relations of capitalist mode of production. Senior’s theory of value synthesized the theory of supply and demand and the theory of cost of production, and on the basis of Say’s theory of distribution, put forth the theory of abstinence which defended the capitalist, holding that the capitalist’s profit came from his “abstinence”; Bastiat’s theory of economic harmony claimed that capitalists’ profits are the reward for the services of capital that resulted from the capitalist's deferred enjoyment; Carry advocated that profit was the revenue generated by capital. They completely abandoned the labor theory of value and replaced the analysis of the relations of production in classical political economy with the description of phenomena in the sphere of exchange, thus purely becoming a doctrine in defense of the capitalist system.

Contemporary western economics basically belongs to vulgar economy. Although they have made some achievements in explaining the problems concerning the process of economic operation, they have tried to conceal the essence of capitalist relations of production and the exploitative relationship between the bourgeoisie and the working class.