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Monday, March 25, 2013

The first philosopher–economists: the Greeks

1.1  The natural law
1.2  The politics of the polis
1.3  The first ‘economist’: Hesiod and the problem of scarcity
1.4  The pre-Socratics
1.5  Plato's right-wing collectivist utopia
1.6  Xenophon on household management
1.7  Aristotle: private property and money
1.8  Aristotle: exchange and value
1.9  The collapse after Aristotle
1.10 Taoism in ancient China
1.11 Note
It all began, as usual, with the Greeks. The ancient Greeks were the first civilized people to use their reason to think systematically about the world around them. The Greeks were the first philosophers (philo sophia – lovers of wisdom), the first people to think deeply and to figure out how to attain and verify knowledge about the world. Other tribes and peoples had tended to attribute natural events to arbitrary whims of the gods. A violent thunderstorm, for example, might be ascribed to something that had irritated the god of thunder. The way to bring on rain, then, or to curb violent thunderstorms, would be to find out what acts of man would please the god of rain or appease the thunder god. Such people would have considered it foolish to try to figure out the natural causes of rain or of thunder. Instead, the thing to do was to find out what the relevant gods wanted and then try to supply their needs.
The Greeks, in contrast, were eager to use their reason – their sense observations and their command of logic – to investigate and learn about their world. In so doing, they gradually stopped worrying about the whims of the gods and to investigate actual entities around them. Led in particular by the great Athenian philosopher Aristotle (384–322 B.C.), a magnificent and creative systematizer known to later ages as The Philosopher, the Greeks evolved a theory and a method of reasoning and of science which later came to be called the natural law.
1.1 The natural law
Natural law rests on the crucial insight that to be necessarily means to be something, that is, some particular thing or entity. There is no Being in the abstract. Everything that is, is some particular thing, whether it be a stone, a cat, or a tree. By empirical fact there is more than one kind of thing in the universe; in fact there are thousands, if not millions of kinds of things. Each thing has its own particular set of properties or attributes, its own nature, which distinguishes it from other kinds of things. A stone, a cat, an elm tree; each has its own particular nature, which man can discover, study and identify.
Man studies the world, then, by examining entities, identifying similar kinds of things, and classifying them into categories each with its own properties and nature. If we see a cat walking down the street, we can immediately include it into a set of things, or animals, called ‘cats’ whose nature we have already discovered and analysed.
If we can discover and learn about the natures of entities X and Y, then we can discover what happens when these two entities interact. Suppose, for example, that when a certain amount of X interacts with a given amount of Y we get a certain quantity of another thing, Z. We can then say that the effect, Z, has been caused by the interaction of X and Y. Thus, chemists may discover that when two molecules of hydrogen interact with one molecule of oxygen, the result is one molecule of a new entity, water. All these entities – hydrogen, oxygen and water – have specific discoverable properties or natures which can be identified.
We see, then, that the concepts of cause and effect are part and parcel of natural law analysis. Events in the world can be traced back to the interactions of specific entities. Since natures are given and identifiable, the interactions of the various entities will be replicable under the same conditions. The same causes will always yield the same effects.
For the Aristotelian philosophers, logic was not a separate and isolated discipline, but an integral part of the natural law. Thus, the basic process of identifying entities led, in ‘classical’ or Aristotelian logic, to the Law of Identity: a thing is, and cannot be anything other than, what it is: a is a.
It follows, then, that an entity cannot be the negation of itself. Or, put another way, we have the Law of Non-Contradiction: a thing cannot be both a and non-a. a is not and cannot be non-a.
Finally, in our world of numerous kinds of entities, anything must be either a or it won't be; in short, it will either be a or non-a. Nothing can be both. This gives us the third well-known law of classical logic: the Law of the Excluded Middle: everything in the universe is either a or non-a.
But if every entity in the universe – if hydrogen, oxygen, stone, or cats – can be identified, classified, and its nature examined, then so too can man. Human beings must also have a specific nature with specific properties that can be studied, and from which we can obtain knowledge. Human beings are unique in the universe because they can and do study themselves, as well as the world around them, and try to figure out what goals they should pursue and what means they can employ to achieve them.
The concept of ‘good’ (and therefore of ‘bad’) is only relevant to living entities. Since stones or molecules have no goals or purposes, any idea of what might be ‘good’ for a molecule or stone would properly be considered bizarre. But what might be ‘good’ for an elm tree or a dog makes a great deal of sense: specifically, ‘the good’ is whatever conduces to the life and the flourishing of the living entity. The ‘bad’ is whatever injures such an entity's life or prosperity. Thus, it is possible to develop an ‘elm tree ethics’ by discovering the best conditions: soil, sunshine, climate, etc., for the growth and sustenance of elm trees; and by trying to avoid conditions deemed ‘bad’ for elm trees: elm blight, excessive drought, etc. A similar set of ethical properties can be worked out for various breeds of animals.
Thus, natural law sees ethics as living-entity- (or species-) relative. What is good for cabbages will differ from what is good for rabbits, which in turn will differ from what is good or bad for man. The ethic for each species will differ according to their respective natures.
Man is the only species which can – and indeed must – carve out an ethic for himself. Plants lack consciousness, and therefore cannot choose or act. The consciousness of animals is narrowly perceptual and lacks the conceptual: the ability to frame concepts and to act upon them. Man, in the famous Aristotelian phrase, is uniquely the rational animal – the species that uses reason to adopt values and ethical principles, and that acts to attain these ends. Man acts; that is, he adopts values and purposes, and chooses the ways to achieve them.
Man, therefore, in seeking goals and ways to attain them, must discover and work within the framework of the natural law: the properties of himself and of other entities and the ways in which they may interact.
Western civilization is in many ways Greek; and the two great philosophic traditions of ancient Greece which have been shaping the Western mind ever since have been those of Aristotle and his great teacher and antagonist Plato (428–347 BC). It has been said that every man, deep down, is either a Platonist or an Aristotelian, and the divisions run throughout their thought. Plato pioneered the natural law approach which Aristotle developed and systematized; but the basic thrust was quite different. For Aristotle and his followers, man's existence, like that of all other creatures, is ‘contingent’, i.e. it is not necessary and eternal. Only God's existence is necessary and transcends time. The contingency of man's existence is simply an unalterable part of the natural order, and must be accepted as such.
To the Platonists, however, especially as elaborated by Plato's follower, the Egyptian Plotinus (204–270 AD), these inevitable limitations of man's natural state were intolerable and must be transcended. To the Platonists, the actual, concrete, temporal factual existence of man was too limited. Instead, this existence (which is all that any of us has ever seen) is a fall from grace, a fall from the original non-existent, ideal, perfect, eternal being of man, a godlike being perfect and therefore without limits. In a bizarre twist of language, this perfect and never-existent being was held up by the Platonists as the truly existent, the true essence of man, from which we have all been alienated or cut off. The nature of man (and of all other entities) in the world is to be some thing and to exist in time; but in the semantic twist of the Platonists, the truly existent man is to be eternal, to live outside of time, and to have no limits. Man's condition on earth is therefore supposed to be a state of degradation and alienation, and his purpose is supposed to be to work his way back to the ‘true’ limitless and perfect self alleged to be his original state. Alleged, of course, on the basis of no evidence whatever – indeed, evidence itself identifies, limits, and therefore, to the Platonic mind, corrupts.
Plato's and Plotinus's views of man's allegedly alienated state were highly influential, as we shall see, in the writings of Karl Marx and his followers. Another Greek philosopher, emphatically different from the Aristotelian tradition, who prefigured Hegel and Marx was the early pre-Socratic philosopher Heraclitus of Ephesus (c.535–475 BC). He was pre-Socratic in the sense of predating Plato's great teacher Socrates (470–399 BC), who wrote nothing but has come down to us as interpreted by Plato and by several other followers. Heraclitus, who was aptly given the title ‘The Obscure’ by the Greeks, taught that sometimes opposites, a and non-a, can be identical, or, in other words, that a can be non-a. This defiance of elemental logic can perhaps be excused in someone like Heraclitus, who wrote before Aristotle developed classical logic, but it is hard to be so forbearing to his later followers.

Austrian Perspective on the History of Economic Thought (2 volume set)

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