Xenophon insists strongly on utility or serviceableness as a necessary quality of property (χρήματα, κτήματα). By this, however, he means primarily, not potential utility in the object, but ability of the owner to use rightly.[[381]] Even exchangeability does not insure value in anything, unless the seller can use to advantage that which he receives in return.[[382]] This idea of value is true enough from the ethical standpoint, and should not be left out of account, as is being recognized by modern economists. But to attempt to build a theory of economic value on such a basis, as Ruskin does,[[383]] would result in hopeless confusion. Value is not merely an individual and moral, but also a social and economic, fact.
A hint of exchange value is given in the implied classification of goods as usable or salable.[[384]] But there is no discrimination between useful things in the economic and uneconomic sense. In the Revenues, on the other hand, when free from Socratic influence, Xenophon makes a positive contribution to the theory of value. He observes that the exchange value of goods varies with supply and demand, and that this law is, in a sense, self-regulative by the fact that workmen tend to enter other fields of activity whenever any industry becomes unprofitable through an oversupply of its products.[[385]]
WEALTH
The double standpoint of Xenophon is well illustrated in his doctrine of wealth. On the one hand, he values it highly, and tries to deduce practical rules for its increase and enjoyment.[[386]] On the other hand, like Socrates and Plato, he makes derogatory comparisons between economic and spiritual wealth.[[387]] As in the case of value, he offers no clear definition of economic wealth (κτῆσις). It is defined indiscriminately as “whatever is useful to life,” and “useful” is “everything that anyone knows how to use.”[[388]] But, as seen above, this is a purely subjective notion, and is only one element in economic wealth.[[389]] He also defines it (χρήματα) as “the excess of goods over needs,” making it a merely relative term:[[390]] but here again the thought is ethical rather than economic, an attempt to teach the somewhat ascetic principle that a man’s riches are measured by the paucity of his wants.[[391]] The hostile or indifferent attitude to wealth is also assumed in the comparison of it with so-called mental wealth and wisdom[[392]] and in the implication that it involves many cares.[[393]] The idea so prominent in Plato, however, that the acquisition or expenditure of great wealth is not consistent with justice, is not emphasized by Xenophon. He calls that man happiest who has best succeeded in just acquisition, and who uses his wealth in the best manner.[[394]]
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]]