p Political Economy, science which studies the social relations that evolve between people in the process of the production, distribution, exchange and consumption of the material benefits. Political economy is a component of Marxism-Leninism. It appeared as a science during the emergence of the capitalist mode of production. Its name comes from the Greek words politikos—state, social, and oikonomia—managing the household economy (from oikos—house, household, and nomos—the law). Political economy has always been a class science. Its representatives have always expressed the interests and ideology of a definite class and have tried to justify the economic policy corresponding to its interests and protecting them. The first systematic attempt to understand the economic phenomena of the nascent capitalist system and to justify the state’s economic policy was mercantilism, which expressed the interests of the bourgeoisie, above all the commercial bourgeoisie. However, the mercantilists limited themselves to analysing the process of circulation and thus failed to disclose the inner laws of the capitalist mode of production. Representatives of classical bourgeois political economy (see Political Economy, Classical Bourgeois), William Petty, F. Quesnay, Adam Smith and David Ricardo shifted their analysis from the sphere of circulation to the sphere of production. The greatest contribution of this school was the theory of labour value. Quesnay, who headed the school of physiocrats, was the first to attempt to portray the process of social reproduction as an integral system. Classical bourgeois political economy was progressive because it defended the interests of the bourgeoisie in the period when it was an ascending class and the bearer of more progressive social relations than those existing under feudalism. The internal contradictions of the capitalist system were just evolving and could not fully reveal themselves. Limited by the narrow framework of bourgeois views, the representatives of this school were unable to grasp the historically transient character of capitalism, to delve into the mystery of surplus value, or to reveal the dual nature of labour. As capitalism developed and its inner contradictions heightened, and as the antagonisms between wage labour and capital grew, bourgeois political economy lost its scientific character. Classical political economy was replaced by vulgar bourgeois political economy. Its representatives—Malthus, Say, Bastiat and others neglected the internal laws of the capitalist mode of production, and attempted to gloss over its contradictions and create a semblance of “harmony” of class interests. The interests of the urban and rural petty bourgeoisie were defended by pettybourgeois political economy, represented by Sismondi and Proudhon. While criticising the contradictions of the capitalist system, they did not see the way out, and called for a return to outdated, archaic economic forms. Karl Marx and Frederick Engels revolutionised political economy, as well as all the social sciences. They created a genuinely scientific, proletarian political economy, gave concrete proof of the historically transient character of the capitalist mode of production, revealed the laws of its development and proved that it would be inevitably replaced by the communist mode of production. They comprehensively substantiated the 276 mission assigned to the proletariat by history as the grave-digger of capitalism and builder of the new, communist society. Marxism embraced, revised and creatively developed all the best created in social thought prior to its emergence, producing a consummate theory. The political economy of Marx and Engels consistently expresses the interests of the working class which coincide with the vital interests of all working people and the progressive development of the productive forces.

This enables it to combine strict scientific approach and consistent Party commitment. Capital, the central Marxist work of political economy, comprehensively explained the immanent laws of development of the capitalist mode of production. Based on his theory of the dual character of labour creating a commodity, Marx disclosed -the inner contradictions of the capitalist system. A great achievement of Marxist political economy is the theory of surplus value, which helped to show the inner processes of capitalist production, tearing off the shroud veiling the secret of capitalist exploitation. Marxism did not limit itself to a comprehensive explanation of the system of economic categories and laws of the capitalist mode of production. It created political economy in the broad sense as a science of the conditions and forms in which production and exchange are carried out in various societies, and how products are distributed (see Frederick Engels, Anti-Diihring, pp. 180-81). Marx and Engels elaborated the basic provisions of the political economy of the primitive communal, slave-owning, and feudal modes of production, revealed the laws governing the transition from capitalism to socialism, and formulated several fundamental provisions of the political economy of socialism. The method of political economy is the sum total of the methods of cognising production relations and reproducing them in a system of economic categories and scientific laws. The method of MarxistLeninist political economy is dialectical materialism, which studies the general laws governing the development of nature, society and human thought. Research into production relations also makes use of more concrete methods, such as analysis and synthesis, induction and deduction, the unity of the historical and logical, and qualitative and quantitative approaches. The development of a genuinely scientific method of studying production relations was a component of the revolution wrought by Marx and Engels in political economy. The serious flaws in bourgeois political economy, such as subjectivism, anti-historicism, and the primacy of exchange and consumption over production, were all overcome. The new stage in the development of proletarian political economy is associated with Lenin (see Lenin, Vladimir llyich). He creatively developed and enriched the general theory of political economy and made an important contribution to the development of the political economy of the capitalist mode of production by his theory of monopoly capitalism (see Imperialism), revealing its economic essence and principal features, and determining the nature and historical place of state-monopoly capitalism as the comprehensive material preparation for socialism. Having ascertained the specific action of the law of the uneven economic and political development of capitalism in the age of imperialism, Lenin inferred that socialism can initially triumph in several or even one individual country. He made a great contribution to Marxist economic theory by creating the fundamentals of the political economy of socialism. Lenin formulated a comprehensive theory of the period of transition from capitalism to socialism and developed a theory of the two phases of the communist socio-economic formation, making a scientific prediction of developed socialism. In the context of the world’s division into two systems and the heightening of the internal contradictions of capitalism, the crisis of bourgeois political economy is deepening. Bourgeois political economy has abandoned its traditional concepts of the advantages of unfettered free competition and is looking for ways to save capitalism from crises and unemployment via state regulation of the capitalist economy. The first to suggest that state regulation of the economy could be a means of 277 overcoming the contradictions of the capitalist mode of production was Keynes (see Keynesianism). A widespread theory of modern bourgeois political economy is that of transformation of capitalism, including the theories of stages of economic growth (Walt Rostow), "uniform industrial society" (Raymond Aron), "new industrial society" (John Galbraith), and " postindustrial society" (Daniel Bell) (See Theory of Industrial Society). While recognising that the contradictions of capitalism do exist, these bourgeois economists are trying to depict modern bourgeois society as non-capitalist. A profound crisis of bourgeois political economy found its reflection in the theory of convergence, which maintains that the two systems, capitalism and socialism, are gradually becoming more and more alike. While it neglects the profound roots of the economic systems, above all of the fact who owns the means of production, and has moved research to the sphere of technological laws and external economic forms, modern bourgeois political economy is trying to disguise the antagonistic contradictions of capitalism and to find means to preserve it. The profound changes that have occurred in the socio- economic sphere today have confirmed the validity of Marxist-Leninist political economy and made it necessary to develop it further. Being a creative science, it is constantly developing, and being enriched with new theoretical propositions and conclusions. The documents of the CPSU and the fraternal Marxist-Leninist parties, and works by Marxist researchers have formulated new fundamental tenets for the economy of developed socialist society, for the system of economic laws of socialism and for the mechanism of their purposeful utilisation. They have worked out a theory of the effectiveness of socialist production and planned economic management, and devised a theory of the world socialist economy and socialist economic integration, which has led to the creation of a political economy of socialism. The theory of the general crisis of capitalism, has been further developed, too. In the socialist countries, political economy is coming to play a greater role in scientifically substantiating economic policy and improving the mechanism and methods of economic activities and management.