What is the central methodology of "classical" economic theory?

The central methodology of "classical" economic theory emphasizes the idea that free markets are the most effective way to allocate resources and drive economic growth. Proponents of classical economics, such as Adam Smith and David Ricardo, argued that individuals acting in their own self-interest would ultimately contribute to the overall efficiency of the economy. This perspective holds that when the government minimizes its involvement, markets can operate freely, leading to better outcomes for society as a whole.

The belief in minimal government intervention is grounded in the notion that markets are naturally self-correcting. This concept suggests that supply and demand dynamics will resolve imbalances without necessitating external control or regulation. By allowing individuals and businesses the freedom to operate as they see fit, classical economic theory posits that efficient resource allocation and optimal production levels can be achieved.

In contrast, the other options reflect different economic philosophies that advocate for various levels of government involvement, such as regulation, central planning, or the idea that government aid is necessary for achieving equilibrium. However, classical economic theory distinctly supports the view that economies function best when free from governmental constraints.