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A Classical Political Economy

Essay by   •  February 9, 2015  •  Essay  •  238 Words (1 Pages)  •  922 Views

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In order to fully understand a classical political economy, you have to first understand its essential characteristics. The six essential characteristics of a classical political economy are as follows: capital, transport, production, consumption, disposal and exchange. Perhaps the most important characteristic, capital, takes several forms in the classical political economy. These forms include physical, intellectual, and human capital. Physical capital are items that can help produce goods and services. Intellectual capital is a set theories or concept that can help circulate the economy. Human Capital is a way of describing how well workers do their job in a particular workforce.

The next characteristic is transport. Transport is simply the ability to move labor and/or capital to their destination in order to get production working smoothly. The understanding of this part of the classical political economy helped governments to find new transportation methods and thus making markets work more efficiently. Production on the other hand, is the other element that helps the markets run more efficiently. Production occurs when capital hires labor to create a good or service. The more efficient the production, the better off the economy within a society. Therefore, it is the state's responsibility to promote the development of production by supplying the economy with labor and means to pay for it.

Consumption is another major characteristic of the classical political economy. The definition of consumption is the value of goods and services bought by people.

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