classical economics

School of economic thought that dominated 19th-century thinking. It originated with Adam Smith's The Wealth of Nations (1776), which embodied many of the basic concepts and principles of the classical school. Smith's theories were further developed in the writings of John Stuart Mill and David Ricardo. Central to the theory were economic freedom, competition, and laissez-faire government. The idea that economic growth could best be promoted by free trade, unassisted by government, was in conflict with mercantilism. In the 20th century, classical beliefs were challenged by Keynesian economics (characterized by government intervention, especially through fiscal policy), but many theories put forward by the classical economists have since become widely accepted again.