Vulgar Political Economy

The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Vulgar Political Economy


a system of anti-scientific bourgeois economic theories which provide a description of the outward appearance of economic processes with the purpose of advocating capitalism.

Vulgar political economy has provided the appearance of a scientific form to the everyday notions of the bourgeoisie concerning economic relations in a capitalist society. It originated and became widespread as a result of a radical change in the social role of the bourgeoisie; in the course of the industrial revolution of the late 18th and early 19th centuries and the appearance of the proletariat in the historical arena, this class was transformed from a progressive class, fighting against feudalism, into a reactionary class. The first industrial crisis (1825) and the first few armed uprisings of the proletariat during the 1830’s revealed the contradictory, transitory character of bourgeois relations. As a result, the tasks which bourgeois political economy had set itself were radically altered. “It was henceforth,” wrote K. Marx, “no longer a question whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. Pure, selfless research gave way to battles between hired scribblers, and genuine scientific research was replaced by the bad conscience and the evil intent of apologetic” (K. Marx and F. Engels, Soch., 2nd ed., vol. 23, p. 17).

Vulgar political economy replaced classical bourgeois political economy, which within certain bounds had provided scientific analysis of capitalism but which by virtue of its class-based bourgeois narrow-mindedness was not able to overcome the vulgarizing element in its theories, an element which was later used by the vulgarizing theoreticians. The establishment of the dominance of vulgar political economy marked the beginning of the crisis in bourgeois political economy.

The development of vulgar political economy is characterized by four basic stages: its origin in the form of a separate trend at the turn of the 19th century (T. R. Malthus and J. B. Say); its conquest of the dominant positions in bourgeois political economy and evolution during the period of free competition from the 1830’s to the 1870’s (J. Mill, N. W. Senior, F. Bastiat, W. Roscher, B. Hildebrand, and H. C. Carey); its continuation during the period of imperialism, from the 1870’s to the 1920’s (the subjective-psychological school including E. Boehm-Bawerk of Austria, A. Marshall of Great Britain, and J. B. Clark of the USA); the Newer (Younger) Historical School of K. Bücher and G. Schmoller of Germany; and the legal school represented by R. Stolzmann of Germany; and finally its development during the period of the general crisis of capitalism (J. Schumpeter, F. Hayek, L. Mises, W. Rostow, P. Samuelson, and others).

Early vulgar political economy was the result of the selection and systematization of the unscientific positions of the classical school and was a product of the latter’s disintegration. The basic trend of its development during the first two stages was an ever-increasing utilization of superficial economic forms in order to veil the exploitative essence of capitalism and to struggle against utopian and scientific socialism. For example, in the theory of value the vulgar economists rejected the concept developed by the classical school, which defined the value of goods by the labor expended on their production. They replaced value initially by the production cost (a modification of the value) and by the use value (one of the aspects of a commodity), and subsequently by the exchange value, the monetary form of value, that is to say, by price—by these external forms of the manifestation of value. During the epoch of imperialism under the impact of the growth of the workers’ movement and the spread of scientific socialism, vulgar political economy was compelled to seek new forms in the defense of capitalism. As a supplement to its previous devices of apologetics, it has striven to base its theories on the external semblance of noneconomic processes and phenomena, studied both as social and natural, as well as universal sciences, all distorted for their purposes. It was not by accident that the 1870’s were precisely the time when the psychological, ethical, historical, sociolegalistic, sociological, and other trends of vulgar political economy became widespread. They provided a noneconomic “explanation” of nature and laws of economic processes that was convenient for the ruling classes of bourgeois society. For example, the Austrian School defined the “value” of goods, that is, their cost, not in terms of labor but according to their scarcity; and in the works of the British economist A. Marshall a capitalist’s profit was a payment for abstaining from spending his capital, rather than a result of his acquiring surplus value.

Present-day vulgar political economy is represented by numerous “problems” trends, such as the theories of organized capitalism, the mixed economy, the universal welfare state, countervailing forces, the industrial society, convergence, the stages of economic growth, monopolistic competition, people’s capitalism, and big business. These have as their goal the defense of capitalism with respect to problems which are comparatively narrow but extremely acute in a given country and in a given period, as contrasted with the previous “systemwide” schools of thought, which carried out a defense of capitalism with respect to the entire broad traditional group of problems in political economy. This testifies to the striving to activate the ideological function of vulgar political economy. Compelled under the pres-sure of the general crisis of capitalism to acknowledge certain contradictions of capitalist society, present-day vulgar political economy is directing its efforts to working out practical recommendations to diminish these contradictions. In this connection there has been an essential growth in the practical function of contemporary vulgar political economy.

Nevertheless, the lack of a unified theory in present-day vulgar political economy does not preclude it from having certain general fundamentals, traits, and peculiarities. The vulgar economists deny the objective character of the sociohistorical process and its laws; they attach great importance to the subjective activity of individuals and the organizational forms of the social structure. Hence, they declare the subject of political economy to have nothing whatsoever to do with the socioeconomic structure of society or the objective laws of its development but rather with the study of the “rules of the utilization of scarce resources,” the “principles of obtaining the means of existence,” the “science of business,” and so on. Such a treatment was called upon to depict capitalism as some kind of organization for the “elimination” of poverty and the achievement of “universal welfare.” The methodology of contemporary vulgar political economy is also antiscientific. It is characterized by eclecticism; a technical-economic or a subjectively psychological ethical interpretation of the economic phenomena of present-day capitalism, directed toward a veiling of their social essence; antihistoricism; and a platitudinous evolutionism in its approach to the most important socioeconomic processes. Vulgar political economy has been called upon to conceal the historically transitional nature of capitalism. Analysis of the internal objective dependent variables of the phenomena of the social process of production are usually replaced by a description, a superficial classification of empirical material from the point of view of the exchange concept. The labor theory of value, which discloses the internal laws of commodity production and exchange, is declared to be “obsolete.” It has been replaced by a subjective theory of value, which attempts in the subjective evaluation of the utility of benefits to the consumers to find a basis for the exchange of commodities, or by the theory of supply and demand, which describes merely the external factors of the process of price formation. Also misinterpreted is the social nature of capital, which is identified with those tangible forms—the means of production, commodities, and money—in which the relations of exploitation appear on the surface of phenomena. At the foundation of contemporary vulgarized theories of distribution lies the old, antiscientific concept of the “factors of production,” which asserts that the sources of income are labor, land, and capital. Rent is allegedly engendered by land, interest by capital, and wages by labor. Profit is depicted as payment for entrepreneurial activity, risk, and so on. In fact, its source is the exploitation of the workers, but the vulgar economists have veiled this. They assert that “each factor appropriates only the product of its own activity,” there is no exploitation, and a “harmony of interests” prevails in bourgeois society. The economic crises of overproduction which have shaken the capitalist economy for about a century and a half are either denied completely or are regarded as capable of elimination within the framework of capitalism, since the causes of these crises are not connected with the fundamental contradiction of capitalism. Special efforts of contemporary vulgar political economy have been denoted to veiling the domination of capitalistic monopolies, which are identified with large-scale production as such, irrespective of its social form. They deny the fact that imperialism is the eve of the socialist revolution. With the aim of distorting the content and basic trend of contemporary world socioeconomic development from a capitalist to a socialist means of production, a slanderous campaign is being waged against socialism. There is wide-spread propagation of the theory of some kind of “transformation” of capitalism (theories concerning the “disappearance of private property,” a “revolution in incomes,” the “transfer of power into the hands of the managers,” and so on). Vulgar political economy has been directed against the revolutionary theory of the workers’ movement—Marxism-Leninism, against the world socialist system, and against the international workers’ and national liberation movement.

The vulgarizing character of contemporary bourgeois political economy does not, however, rule out the possibility of practical and useful scholarly research by bourgeois economists in the applied fields of economics.


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Marx, K. “Teorii pribavochnoi stoimosti” (vol. 4 of Kapital). Ibid., vol. 26, part 3, chapters 19-20, Appendix.
Marx, K. “Zarabotnaia plata, tsena i pribyl’.” Ibid., vol. 16.
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Lenin, V. I. “Rabochii klass i neomal’tuzianstvo.” Ibid., vol. 23.
Lenin, V. I. “Eshche odno unichtozhenie sotsializma.” Ibid., vol. 25.
Lenin, V. I. “Imperializm, kak vysshaia stadiia kapitalizma.” Ibid., vol. 27.
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The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.