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Theory of International

Economy: Classical Theory (L)


Wahyu Mulyana, S. Ip, M. Si
Introduction
• In the period right after the French Revolution, activists and theorists
like Francois Babeuf, Gabriel Morelly, Phillipe Buonarottu and Auguste
Blanqui influenced the early French labour and socialist movements.
• The original "utopian" socialists condemned liberal individualism for
failing to address social concerns during the industrial revolution,
including poverty, social oppression and gross inequalities in wealth,
thus viewing liberal individualism as degenerating society into
supporting selfish egoism that harmed community life through
promoting a society based on competition.
1. Socialism

The word ‘socialism’ finds its root in:


Sociare (latin): to combine or to
share.
Societas (Roman): companionship
and fellowship.

The term "socialism" was created by Henri de Saint-


Simon, one of the founders of what would later be
labelled “utopian socialism". Simon coined "socialism"
as a contrast to the liberal doctrine of "individualism."
• The term "socialism" is also attributed to Pierre
Leroux and to Marie Roch Louis Reybaud in
France. In Britain, to Robert Owen in 1837,
father of the cooperative movement.

• The modern definition and usage of "socialism"


settled by the 1860s, becoming the
predominant term among the group of words
"co-operative", "mutualist" and "associationist.”

So, the premise of Socialism is: government makes many economic decisions
to achieve equality, government owns and control basic resources, limited
private property
2. Communism
• The term "communism" was first coined and defined in its
modern definition by the French philosopher and
writer Victor d’Hupay. In his 1777 book Projet de
Communaute Philosophe.
Commune: Share all economic and material, so that alI may
benefit.

• Later, following the upheaval of the French


Revolution, communism emerged as a political doctrine, with
basic premises:
1. Classless Society
2. State Own Policy and Resources
3. State (worker) control of means production
4. no private property
Communism grew out of the
socialist movement in 19th-
century Europe. As the Industrial
Revolution advanced, socialist
critics blamed capitalism.
Foremost among these critics
were Karl Marx and his
associate Friedrich Engels. In
1848, they offered a new
definition of communism and
popularized the term in their
famous pamphlet The
Communist Manifesto and Das
Kapital
Socialism VS Communism
SOCIALISM COMMUNISM
Sociare/societas commune
1837 1848
- Government own decisions and basic resources - Government own decisions and basic resources
- Limited private property - Eliminating private property
- Often support by totalitarian government

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