p Economic relations, as indicated earlier, determine the character of every social formation. Hence, to understand social life it is necessary, in the first place, to investigate the economic structure of society. Marxist political economy is concerned with this study.

p Political economy is the science that studies production relations between people, the laws of development of social production arid distribution of material wealth at the various stages of human society. "It is not with ‘production’,” wrote Lenin, "that political economy deals, but with the social relations of men in production, with the social system of production.”^^100^^ Some elements of this science arose in the period of slavery in connection with the management of household affairs. Thus, its original name “oikonomia” is made up of the Greek words oikos—household, and nomos—law.

p Political economy began to develop as a science with the rise of the capitalist mode of production. It was a weapon in the hands of bourgeois ideologists in their struggle against feudalism.

p When the bourgeoisie made its appearance on the historical scene as a progressive class it had an interest in scientific knowledge of the laws of development of capitalist production and in eliminating feudal relations which hampered capital from establishing and consolidating its power. This period witnessed the rise of scientific bourgeois political economy, which has been called classical political economy. Its founders were the Englishmen William Petty (1623-1C87), Adam Smith (1723–1790) and David Ricardo (1772– 1823). English bourgeois classical political economy was one of the sources drawn on by Karl Marx for the creation of the political economy of the working class.

p From its inception, political economy developed as a partisan science based on class interest. Owing to its bourgeois character, classical political economy, in spite of having made a number of important discoveries, could not fully lay bare the contradictions of capitalism. Bourgeois economists, as a result of class limitation, regarded capitalism as the natural and sole possible form of organisation of social production. They did not and could not see its historically transient nature.

p With the advent of the working class as an independent and powerful force, bourgeois economists abandoned the scientific analysis of the objective laws governing social development. By 1830, the antagonistic contradictions between the bourgeoisie and the working class came into sharp relief in Western Europe. "Thenceforth,” wrote Marx, "the class struggle, practically as well as theoretically, took on more and more outspoken and threatening forms. It sounded the knell of scientific bourgeois economy. It was thenceforth 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. In place of disinterested inquirers, there were hired prize-fighters; in place of genuine scientific research, the bad conscience and the evil intent of apologetic.”^^101^^

p Bourgeois political economy from then on became anti-scientific and its bankruptcy at that time was, noted Marx, "an event on which the great Russian scholar and critic, N. Chernyshevsky, has thrown the light of a master mind".^^102^^ With the sharpening of the class struggle, bourgeois political economy has become increasingly apologetic and anti-scientific, and to expose the deceit and illusions that it spreads is one of the most important tasks of Marxist-Leninist political economy.

p There also arose a petty-bourgeois trend in political economy. Large-scale production ruined the small peasant proprietor and drove the handicraftsmen out of their workshops, forcing them to become “free” proletarians and to submit to the barrack-like discipline of labour in capitalist enterprises.

p Petty-bourgeois political economy reflected the ideology of the despairing small proprietor. It fostered the illusion of a possible return to the "golden age" of the independent production of peasants and handicraftsmen. Its founder was the Swiss economist Simonde de Sismondi (1773–1842), who put forward a petty-bourgeois criticism of capitalism because he failed to appreciate its historical significance as a necessary stage in the development of social production. Sismondi’s followers persistently concentrated on the weak aspects of his theory, namely, the reactionary Utopian idea of turning the clock of history back through replacing large-scale production, which ensures higher labour productivity, by the primitive small-scale production of a peasant commune, in which agriculture should be combined with handicrafts.

p The ideas of Sismondi were propagated in Russia by the Narodniks,  [209•*  whoso economic views Lenin subjected to devastating 210 criticism. Petty-bourgeois political economy gained most influence in countries with poorly developed capitalist production and a high proportion of petty production by peasants and handicraftsmen. Petty-bourgeois political economy is incapable of correctly determining the trend of social development, although it often plays a useful part by its criticism of the evils of capitalism and modern imperialism.

p Marx and Engels, the great leaders and teachers of the working class, made a genuine scientific analysis of the capitalist mode of production, as well as of the preceding primitive-communal, slave and feudal modes of production.

p By disclosing the economic laws of the rise and development of capitalist production, Marxism, not only threw light on the past of mankind, but also enabled it to see its future. Marxism, tho scientific accuracy of which was strikingly corroborated by the course of history, determined the conditions under which capitalism would inevitably be replaced by a more advanced mode of production—socialism and communism. The principal work of Marx, Capital, is a most important theoretical weapon in the hands of the working class. This work of genius possesses remarkable vitality, its logical force and fiery militant spirit having stood the test of time. Half a century after the first volume of Capital appeared, Lenin’s Imperialism, the Highest Stage of Capitalism was published. This book further developed the general theory of capitalism and concretely examined its new stage—imperialism. Here, as in his other studies of the political economy of capitalism, Lenin gave a brilliant economic substantiation for the laws governing the development of the proletarian revolution in the imperialist period.

Economic theory is a vital component of Marxism-Leninism. It discloses the action of objective economic laws, the correct understanding of which is indispensable for the successful practical activities of Communist and Workers’ Parties. It helps the working people in capitalist countries to develop correct tactics in the class struggle against the bourgeoisie. Marxist-Leninist parties in the socialist countries, guided by the laws of political economy, are directing the economic life of their countries along the path to communism.