Fast forwarding, after the period of classical economic thought set in and began to develop and refine it’s theories, a sociologist, Karl Marx, strongly rejected classical economics and the class-based distinctions it made (as opposed to the prior ruler-oriented distinction seen in Feudal times) with his Communist Manifesto in 1848, and the lecture Das Kapital in 1867.

Das Kapital, written by Marx and edited by philosopher Friedrich Engels outlined Marxian “exploitation of labour” as the driving force behind what was now finally referred to as “capitalism;” the market structure supported by classical economists after the Wealth of Nations’ publication. Marx claimed that the value-added to new products clearly defines what the wage of an employees work should be (that is, the sum of the parts should make the whole).

Marx described “commodities” as the building structure of modern capitalist society; any product which has value to someone else, but only trading value to its holder is a commodity in Marxian theory.

Das Kapital, unlike the Communist Manifesto, is not an appeal to emotion regarding the exploitation of particular classes, but rather a more academic analysis of “exploitation” in capitalist society.

A number of other rejections of classical economics occurred in this period - likely stabilized by the instability of economies and political establishments due to wars and vastly changing technological conditions in this period. These include Malthusian rejections (”gluts”, the foundation of Keynesian theory) and French rejections of classical economics - subjects that are too vast to address in this short article. This author recommends the modern pop culture work on economic history, The Worldly Philosophers by Robert L. Heilbroner, for a broader look at a number of less popular rejections.

The response to Marxian and other rejections of classical economics became the foundation of neoclassical economics - occurring at some point after 1871. The newly founded London School of Economics became a competitive, driving force against the U.S. based Chicago and Cambridge schools of economic thought, each providing its own new contribution to economics and dividing the field in to a number of diverse theories.

The contributions of Karl Marx are outlined in more detail in our more recent article in the Contributions to Economics series.

1. Pre-Classical Economics (before 1776)
2. The Classical Era (1776 - 1870)
3. Karl Marx and Rejections of Classical Economics (1870s)
4. Neoclassical Economics and Beyond (1871 - today)
5. View all pages.

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