2. Confusion of private and public economy.—As a result of this simplicity, the terms οἰκονομία and οἰκονομική were, both in derivation and largely in usage, referred to household management rather than to public economy.[[4]] Domestic and public economy were regularly defined as differing merely in extent.[[5]] Aristotle, however, distinctly criticizes the confusion of the two.[[6]] Moreover, there is no warrant for the frequent assertion that Greek thinkers never rose above the conception of domestic economy. Xenophon’s treatise on the Revenues of Athens, and Aristotle’s entire philosophy of the state are a sufficient answer to such generalizations. The statement of Professor Barker that “political economy,” to Aristotle, would be a “contradiction in terms,” is extreme.[[7]] There is also a certain important truth in the Greek confusion, which has been too generally missed by modern critics and statesmen—that the public is a great property-holder, and that politics should be a business which requires the application of the same economic and ethical laws as are admitted to govern in private affairs.
3. Confusion of economics with ethics and politics.—The assertion that Greek economic theory was confounded with ethics and politics has become a commonplace. The economic ideas of Greek thinkers were not arrived at as a result of a purposeful study of the problems of material wealth. All economic relations were considered primarily from the standpoint of ethics and state welfare. “The citizen was not regarded as a producer, but only as a possessor of wealth.”[[8]] Such statements are too commonly accepted as a final criticism of Greek thinkers. Though the confusion was a source of error, and caused Greek economic thought to be one-sided and incomplete, yet some important considerations should be noted.
a) The Socratic philosophers are our chief source for the economic ideas of the Greeks. Too sweeping conclusions should not, therefore, be drawn from them as to the general attitude of the Greeks. Xenophon is much freer from the ethical emphasis than the other Socratics. Thucydides is entirely free from it, and very probably his standpoint came much nearer being that of the average Athenian citizen.
b) The confusion was not merely with individual ethics, for Greek moral philosophy always had the welfare of the state for its goal. Indeed, the basal reason for this close union of economics, ethics, and politics is the true idea that the state should rise above internal strife, and unite all in a care for the common interest.[[9]]
c) The standpoint of the Greek philosophers is certainly no more to be criticized than is that of the so-called orthodox political economy.[[10]] They represent two extremes. If the Greek theory did not give to wealth its full right, and was open to the charge of sentimentalism, the Ricardian doctrine, with its “economic man,” which eliminated all other ideals and impulses, was an unreal and pernicious abstraction. Of the two errors, the Greek is the less objectionable, and is more in accord with the trend of economic thought today. The best economists are now insisting more and more on the Greek idea that economic problems must be considered from the standpoint of the whole man as a citizen in society. Modern political economy “has placed man as man and not wealth in the foreground, and subordinated everything to his true welfare.” “Love, generosity, nobility of character, self-sacrifice, and all that is best and truest in our nature have their place in economic life.”[[11]] “The science which deals with wealth, so far from being a ‘gospel of Mammon,’ necessarily begins and ends in the study of man.”[[12]] “Es soll kein Widerspruch zwischen Ethik und Volkswirtschaft bestehen, es soll das Sittengesetz für die Wirtschaft gelten und in ihr ausgeführt werden.”[[13]] Such strong statements taken at random from modern economists should serve to temper our criticism of the Greek confusion. Plato’s definition of economics, as suggested by one of the most recent historians of economic thought,[[14]] could easily be accepted by many a modern scholar: “Economics is the science which deals with the satisfaction of human wants through exchange, seeking so to regulate the industries of the state as to make its citizens good and happy, and so to promote the highest well-being of the whole.” The contention of the Socratics, that all economic operations must finally root in the moral, that all economic problems are moral problems, and that the province of economics is human welfare, is thus a dominant twentieth-century idea. And just as the ethical interest of the Greek philosophers caused them to emphasize the problems of distribution and consumption, so these are the phases of economics that receive chief consideration today. To be sure, modern thought appreciates more fully the complementary truth that all our social and moral problems root essentially in economic conditions, though this too was by no means overlooked by Plato and Aristotle.
4. Ascetic tendency.—It cannot be denied, however, that, as a result of the overemphasis on the ethical, Greek economic thought was hampered by a certain asceticism. But this was also an outgrowth of pessimistic tendencies in Greek philosophy itself. Moreover, the ascetic ideas of the philosophers cannot be accepted as the common attitude of Athenian citizens, any more than Thoreau can be recognized as a criterion of the economic thought of his day in New England.[[15]] Asceticism was certainly foreign to the mind of Pericles and Thucydides. In the course of our discussion, also, we shall find that it represents, after all, only one phase of the thought of the philosophers themselves.
5. Socialistic tendency.—Since Greek economy was chiefly interested in the problems of distribution, it tended toward socialism, both in theory and in practice. This was also a natural outgrowth of the fact that individual interests were subordinated to public welfare. Though the latter half of the fifth century witnessed a great individualistic movement in Greece, and though individualism and independence are often named as prominent Greek characteristics, yet these terms did not constitute a basal political principle, even in the free Athenian democracy, in the same sense as they do with us today. The life of the Greek citizen was lived far more for the state, and was more absolutely at the disposal of the state, than is true in any modern democracy. In Greece, politics was thus the social science of first importance, and the supreme purpose of all human activity was to make good citizens. State interference or regulation was thus accepted as a matter of course, and the setting of prices, rigid regulation of grain commerce, exploitation of the rich in the interest of the poor, and public ownership of great material interests such as mines were not revolutionary ideas, but common facts in Greek life.[[16]] The tendency of the theorists was therefore naturally toward centralization of power in the hands of the state, and an exaggerated idea of the omnipotence of law.[[17]] Yet despite the error inherent in it, this socialistic tendency of Greek economic thought had its basal truth, which is becoming an axiom of modern economics and statesmanship—the belief that private property is not a natural right, but a gift of society, and hence that its activities should be controlled by society, and made to minister to public welfare. Indeed, we have by no means escaped the error of the Greek thinkers, for one of the most common mistakes of statesmen and political theorists today is an overestimate of the effectiveness of law.
CHAPTER II
ECONOMIC IDEAS BEFORE PLATO, AND REASONS FOR THE UNDEVELOPED CHARACTER OF GREEK ECONOMICS
As stated above, the economic ideas of the Greeks were unsystematized and inextensive.[[18]] The extant literature previous to Plato presents only incidental hints on matters economic. Hesiod, in interesting antithesis to classical thinkers, emphasizes the dignity and importance of manual labor.[[19]] The contrast, however, is not so great as it appears, for the labor which he dignifies is agricultural. He constantly urges its importance as the chief source of wealth.[[20]] On the other hand, he opposes the commercial spirit that was beginning to be rife in his age, and decries the evil of unjust gains.[[21]] His mention of the fact of competition between artisans of the same trade is of interest for the development of industry in Greece.[[22]] His Erga was, in a sense, the forerunner of the later Economica in Greek literature.
Solon proved by his reforms that he had some sane economic ideas as to the importance of labor, industry, commerce, and money in the development of the state. He also showed some insight into the solution of the problem of poverty. His ideas, however, are not definitely formulated in his extant fragments, and belong rather to economic history.[[23]] The Elegies of Theognis are full of moral utterances on wealth, emphasizing its temporary nature as compared with virtue.[[24]] Pythagoras and his followers have often been given a prominent place in the history of communism, but this is probably due to a false interpretation.[[25]] It is likely, however, that he opposed the evils of luxury, and moralized on the relation between wealth and virtue.[[26]] Democritus wrote a work on agriculture.[[27]] Like the other philosophers, he taught that happiness was to be sought in the gold of character, rather than in material wealth.[[28]] To his mind, poverty and wealth alike were but names for need and satiety (κόρου).[[29]] Wealth without understanding was not a safe possession, depending for its value on right use.[[30]] The amassing of wealth by just means, however, was good,[[31]] though unjust gains were always a source of evil.[[32]] Excessive desire for wealth was worse than the most extreme poverty.[[33]] It is possible also that Democritus held to a mild form of the social contract theory of the origin of society.[[34]] Heraclitus complained bitterly of the unwisdom of the masses and their merely material view of life.[[35]] He made the common antithesis between material and spiritual wealth,[[36]] and observed the fact that gold is a universal medium of exchange.[[37]] Hippodamas of Miletus and Phaleas of Chalcedon proposed new plans for the distribution of wealth, but we have the barest outline of their theories from Aristotle.[[38]] Their systems will be discussed in a following chapter.