Greek roots of economics

Plato c. 428 – c. 347Xenophon c. 430 – c. 355.Aristotle 384-322.

Plato

Plato was philosopher, mathematician, writer of philosophical dialogues, poet and, not least, founder of the Academy in Athens

PlatoPlato was concerned about the ideal state. Plato claimed that

government should be in the hands of the most able members of society - the aristocracy. The guardians should live in a kind of communistic community with no personal property and rule over others, see Republic and the Laws.

Plato made a point about how much inequality should be allowed. No one should have less than a minimum size holding and no one more than four times that.

Platoworked on the design of the ideal community – Atlantis. Plato can be related to social contract theory, a long story

from Plato, via Thomas Hobbes, John Locke and all the way to John Rawls.

XenophonXenophon had experience as

military and political leader and was a disciple of Sokrates. Late in his life he became a writer and philosopher.

Author of Oikonomikos which is was concerned with the nature of wealth as what benefits the owner and what he knows to use.

Oikonomikos also deals with the role of woman in managing property

AristotleStudent in Plato’s Academy, later

established the Lyceum. Aristotle among the greatest names in the history of knowledge, covering a wide range: physics, meteorology and zoology; logic, epistemology and metaphysics, and also ethics, politics, rhetoric and aesthetics.

Aristotle exerted strong influence in post-Renaissance Europe. His authority was sought also for economic issues, in passages from Politics and Nicomachean Ethics.

Discussed the origin of money, justice in exchange, et al.

War and exchange in the Greek city states

Hesiod in eighth-century BC Greece suggested that economic isolation and self-sufficiency might be the best protection against war because for voracious enemies out-of-sight was out-of-mind. (The ideal communities imagined by Plato in Atlantis, Sir Thomas More in Utopia, and Francis Bacon in New Atlantis were all remote from their neighbours.) Security, they implied, lay in isolation and economic autarky. In economic interdependence there was danger. Economic interchange requires human interaction and from such contacts emerge frictions, cupidity, and ultimately physical violence. The state dealt with domestic violence through the police and the courts. Correspondingly international trade and flows of resources across borders should be constrained by the state to reduce tensions that could lead to war. The ancients recognized that, if war should begin, the structure of the economy could profoundly affect the capacity of a state to defend itself. The early Greeks appreciated that the highly efficient hoplites military formation, as well as other military tactics, depended upon the strength and high morale of their small-scale farming population. As an effective fighting machine a labour force of docile day labourers just would not do. Similarly, the citizen-based merchant marine of Athens was the foundation upon which her powerful navy rested. Warfare was treated by the Greek philosophers and their admirers in the Middle Ages as simply one among many possible economic activities. Trade, colonization and conquest of one's neighbours were alternative uses of national resources. The task of leaders was to identify the best among them. This calculation required the kind of hardheaded cost–benefit analysis that became the hallmark of later economics. A very informative description of classical Greek and Roman thought on international trade and trade policy is provided by Irwin (1996, ch. 1). Interestingly, for example, both Plato and Aristotle were at best ambivalent about the virtues of open trade.