PRODUCTION
The Greeks had no specific word for production, as we have, since industry, though well developed, was not a dominant feature of Greek life, and economics had not become a separate science. The word ἐργασία, meaning “labor” or “business,” served the purpose. The term was used of productive labor,[[395]] of building or manufacturing,[[396]] of work in raw materials,[[397]] most commonly of agriculture,[[398]] of industries in general,[[399]] of the trades, commerce, or other business for money-making,[[400]] and of a guild of laborers.[[401]] The term ἡ ποιητικὴ τέχνη, “the productive art,” which approaches more nearly to a specific, technical expression, was also used.[[402]] Thus, though there is no clear-cut term for production, the statement of Zimmern[[403]] that the Greeks had no better word for “business” than ἀσχολία, “lack of leisure,” is hardly warranted.
Xenophon was far more interested than Plato or Aristotle in the problem of practical production. His shrewd discussion of agriculture, and his urgent appeal to Athens to increase her revenues by systematic exploitation of the mines, and by the encouragement of industry and commerce, reveal a mind awake to economic advantage. Though at times he seems almost to make war and agriculture the only true means of production, it is evident that he has a live interest in all means of acquisition.[[404]] Toward the theory of production, however, his contribution is not large. In the Economics, he recognizes the importance of labor and natural resources in production, and in the Revenues, he sees the necessity of capital.[[405]] But naturally, like Aristotle and the southern planter, he confuses capital with labor, in the person of the slave.[[406]] The fable of the dog and the sheep reveals a knowledge of the machinery of production, and some insight into the proper relation between the employer and the laborer.[[407]] Xenophon’s distinct contribution to future economic thought, however, consists in his appreciation of the fact that economic production has its definite limits; that the same ratio of profits cannot be increased indefinitely by the constant addition of more labor and capital, but that these must be proportioned to the greatest possible return.[[408]] To be sure, he does not appreciate the scientific significance of the principle. His purpose is rather to emphasize the danger of overproduction, and he even fails to grasp the necessary application of this danger to the silver mines. However, as the enunciator of the principle, he may be called the forerunner of the doctrine of diminishing returns.
As seen above, special emphasis was laid by Xenophon upon natural resources as an element in production, both in land and in the mines. His great interest in and eulogy of agriculture as the basal industry, upon which all other sources of wealth depend,[[409]] have caused him to be classed with the physiocrats of modern time but such an interpretation is hardly warranted. Without doubt, agriculture is, in his opinion, the supremely honorable occupation. It shares with war the right to be placed above all other vocations.[[410]] It permits the maximum of leisure and physical development, and is not unworthy of the personal attention of a prince.[[411]] It is the most pleasant, most productive,, most dignified, of callings; the best exercise for the athlete, the finest school for education in patriotism and justice, and it offers the greatest opportunity for the exercise of hospitality to men and reverence to gods.[[412]] Indeed, it is the first of all occupations for an honorable and high-minded man to choose.[[413]] Here we have the highest eulogy of agriculture in Greek literature. It is in essence a sound statement, and offers a needed message for today.
Though Xenophon recognized the practical importance of capital in industrial enterprises,[[414]] he developed no theory of it in his writings. He appreciated, however, the value of being able to keep a surplus.[[415]] The term ἀφορμή, as used by him of the provision of raw material for weaving, probably signified nothing more than it would have done to any Athenian business man of his time.[[416]] The word originally meant a “starting-point,” especially in war.[[417]] Later, it signified the “means” or “resources” with which one begins a project,[[418]] especially in business. It was an easy step from this general business use to the meaning, “financial capital” of a banker.[[419]] Other terms for capital were ἐνεργά, used of interest-bearing capital in antithesis to ἀργά, of goods merely for use;[[420]] κάρπιμα, “goods that yield a produce,” as opposed to ἀπολαυστικά, “goods to be enjoyed,”[[421]] which is suggestive of Mill’s[[422]] definition, “that part of his possessions ... which he designs to employ in carrying on fresh production,” and of his two kinds of capital, “circulating” and “fixed”; ποιητικά, “things for further production,” as opposed to πρακτικά, “things merely for use”;[[423]] κεφάλαιος, of capital as opposed to interest or income.[[424]] The term ἔρανος, also, since it came to mean a “contribution of money,” was often used of a loan, and therefore approached the signification of “money capital.”[[425]]
Xenophon is considerably more favorable to labor and the industrial life than are the other Socratics. He quotes Socrates with apparent approval, that to do something well is well-being, while he who does nothing well is neither good for anything nor beloved of God.[[426]] Work is far better than idleness. It produces more happiness, makes the laborer more temperate and just, and is the sine qua non for the independent life.[[427]] This is a strong plea for industry, and is especially significant, since it refers primarily, to manufacture rather than to agriculture. The reference, however, is to women workers, whose loss of leisure would not be an injury to the state. Each person is encouraged to provide for himself, and to do his work in the best possible manner,[[428]] and the maxim of Epicharmus, “For labor, the gods sell all goods to us,” is heartily approved.[[429]] All the foregoing passages are Hesiodic in their insistence upon the value of industry.[[430]] But apart from his evident acceptance of the doctrine of Socrates, as quoted above, Xenophon exhibits a positive interest in labor. His attitude toward the advancement of industry and commerce is thoroughly modern, except that he does not contemplate the employment of free citizen labor.[[431]] He emphasizes labor almost as strongly as natural resources as an important factor in production. He believes also that industrial thrift and prosperity are the best means of realizing a more quiet and orderly state.[[432]]
Even the practical Xenophon, however, is not free from the moral-aristocratic prejudice against mechanical arts (βαναυσικαί) for the better class of citizens. He admits that they are justly spoken against, and held in ill-repute, since they tend to weaken the laborer both in body and in soul.[[433]] The artisans have no leisure to give either to their friends or to the state, and in a warlike state the citizens cannot be thus employed.[[434]] The artisan is also servile because of his ignorance of the higher moral sentiments (τὰ καλὰ καὶ ἀγαθὰ καὶ δίκαια).[[435]] All this sounds like Plato, but Xenophon differs, in that he is in no wise opposed to the unlimited development of industry and commerce, provided the drudgery of it may be done by non-citizens.
The principle of the division of labor is clearly stated by him, but here again he differs from Plato in that his prime interest is practical and economic rather than moral. He presents it as the reason why royal dishes are superior in flavor to others, and makes the acute observation that the division of labor is not so fully applied in the small city, because there are not enough consumers to support a man in one trade. In the large city, on the other hand, the consumers are so numerous that even the trades themselves are divided and subdivided. Thus much greater skill is developed, and better results realized, for he who spends his time in work of the narrowest compass (βραχυτάτῳ) must accomplish this in the best manner.[[436]] He does not specify the advantages of the division of labor to industry, except that it results in greater skill, but he reveals especial insight in stating so clearly the relation of the market to the development of the principle.[[437]] In this, he is the forerunner of Adam Smith, who observes that a minute division of trades cannot exist except in the larger cities, especially in coast and river towns.[[438]] The assertion of Haney,[[439]] that the Greeks referred only to a “simple separation of employments,” is certainly unwarranted in the light of this passage, for Xenophon expressly distinguishes here the simple from the more complex subdivision. He says that some are employed on men’s shoes, others on women’s; some do the sewing (νευρορραφῶν), others do the cutting (σχίζων), and that the same also is true in the manufacture of clothing.[[440]] This passage is also an evidence that the development of industry in fourth-century Athens must have been extensive. Xenophon also, like Plato, observed the fact that the diversity in the natures of men is the basis for the division of labor,[[441]] though he did not follow him in his doctrine that men and women should have the same work.[[442]]
Unlike Plato, the idealist, Xenophon, the practical man of affairs, takes the institution of slavery for granted, seemingly unconscious of any ethical or economic problems involved.[[443]] However, as a matter of common-sense, he advises that slaves be treated with consideration. He would give them a proper degree of liberty,[[444]] and arouse them to do their best[[445]] by a fair system of rewards and punishments. In the case of those slaves who hold positions of trust, he advises that their affections should be won by kindly treatment, and even by making them sharers in the prosperity of the household.[[446]] Slavery is, of course, a condition most irksome to the free-born. The unfortunate Eutheros would almost prefer starvation.[[447]]