Classical economics

Classical economics is the school of economic thought that was developed by Adam Smith and David Ricardo. It is seen by many as the first modern school of economic thought.

It tended to stress the benefits of trade, the tendency of the free market to reach equilibrium and the labor theory of value.

It was largely displaced by marginalist schools of thought who saw value to derive from the marginal utility that consumers found in a good rather than the cost of the inputs that made up the product. Ironically, considering the attachment of many classical economists to the free market, the only major school of economic thought that still adheres to classical forms is the Marxist school. This is due to the fact that Karl Marx died before marginalist theories were widely accepted.