Neo-classical Trend in Bourgeois Political Economy, one of the main trends in vulgar political economy, which appeared in the 1870s. Its founders were prominent bourgeois economists, such as Carl Menger, Friedrich von Wieser and Eugen BohmBawerk (Austrian School), William S. Jevons and Leon Walras (Mathematical School), John B. Clark (American School), A. Marshall and Arthur C. Pigou (Cambridge School). On the one hand, this trend was a reaction to Marxism, with its comprehensive criticism of capitalism; on the other, it was an attempt by bourgeois economists to formulate rules for the optimal regime for managing capitalist enterprises under free competition and determine the principles for economic equilibrium in this system. Both tasks were tackled through a fundamental revision of both the subject matter and the method of political economy created by the classics of bourgeois economic thought (see Political Economy, Classical Bourgeois). The advocates of the new trend declared the subject of their research to be the so-called pure economy, regardless of the social form in which it is organised. The behaviour and subjective motives of the so-called economic man, guided by hedonism, i. e., deliberate pursuit of his correctly understood interests, became the only object of their research, rather than general economic categories, connected with the behaviour of social groups and classes. This "economic man”, no matter what his role— consumer, capitalist or seller of labour power—always tries to maximise his income (or usefulness) and minimise his outlays (or effort). Finally, the advocates of the neo-classical school used the notion of marginal or additional value, describing the benefit obtained from each additional unit of output consumed (marginal utility) or the expenditures of the production factor (marginal productivity) as the main quantitative category of analysis. The use of marginal quantities has opened up broad opportunities for the use of mathematical methods in economic analysis (e. g. differential calculus). On this basis, the advocates of the neo-classical trend tried to justify so-called natural laws, which were supposed to determine value and prices, including the prices of factors of production, i. e., profit, wages and rent, and also the laws behind the distribution of incomes. To counterpoise the labour theory of value, they advanced a theory of marginal utility. Accordingly, value was regarded as a subjective category, its magnitude (subjective evaluation) being determined by the utility of the last additional unit of the object consumed. This theory states that marginal utility determined the prices of consumed goods and, via consumer goods, the price of factors of production. The general principles of the theory of marginal utility were further developed in the theory of the marginal productivity of factors, advanced by J. B. Clark (USA) (see Theory of Marginal Productivity). According to Clark, value acts as the sum of the marginal products of allegedly equal factors of production. He contended that, under premonopoly capitalism, marginal products determine the price of factors of production, too, i. e., wages, profit and rent, so distribution, too, is effected in accordance with the just “natural” laws. The neo-classical theory of value and price formation was developed most fully in the works of the British economist A. Marshall. The neo-classical trend also advanced a theory of general economic equilibrium, according to which the mechanism of free competition was supposed to ensure not only a “just” distribution of incomes, but also maximum use (“full employment”) of economic resources. This theory served as the basis for the concept of the inner stability of capitalist economy, an apology for "free enterprise" and the policy of non-interference by the state in the economy. Beginning in the 1930s, the dominant position of the neo-classical trend was seriously undermined by the 247 development of Keynesianism, which advocated state regulation of the economy. In the 1950s, however, the neo-classical trend gradually revived and the neo-classical theory of growth began developing (see Theory of Economic Growth). This theory proceeded from vulgar neo-classical postulates concerning the creation and distribution of value, but, its main goal was to analyse the conditions for balanced growth, as well as to assess the role of individual economic growth factors. In the same period, attempts were made to find a way of uniting the Keynesian and neo-classical theories into a general system of views, which came to be known as "neo-classical synthesis”. In the 1960s, the neo-classical offensive against Keynesianism gained momentum. The sharp criticism of the Keynesian recipes for regulating the economy which boosted inflation were accompanied by a certain face-lifting of the neoclassical concept itself. So-called monetarism has become its chief form. According to the monetary theory (its author was Milton Friedman, head of the Chicago School), the money supply is the main source of economic disorder in capitalist society. According to monetarists, crises and inflation are engendered by sharp vacillations in the money supply as a consequence of the implementation of Keynesian recipes for stabilising the capitalist economy. Monetarists believe that the capitalist economy is inherently stable and that the task of economic policy must be brought down only to maintaining a steady growth rate of the money supply. Monetarists use criticism of state interference in the economy above all for attacking the state’s social expenditures, demanding a reduction or limitation of them. The revival of the neo-classical trend reflects the fact that state regulation of the economy has its limits and is unable to rid capitalism of its inherent contradictions.