Preclassical Economics
Ancient, Preclassical, and Classical Periods
➢ Preclassical period (800 BC – 1776): Hesiod (800
BC),Plato (428-348 b. C.) Xenophon (430–355 BC),
Aristotle (384–322 BC)
➢ Scholasticism: St. Thomas Aquinas (1225–1274),
Mercantilists, Physiocrats
➢ Classical period (1776 – 1870)
A useful insight into the early
economic thought
• What are economic goods?
• What are the mechanisms of allocating goods?
• How can the question of scarcity of goods be managed?
• What are the relationships between economic enquiry and
other fields of knowledge?
• Can concepts like Fairness or Justice have a central role
within an economic reflection?
Economic questions
• Authority, tradition, and justice
market and efficiency
• Subsistence
the problem of scarcity
purpose of the economy
well-being
• Philosophy, politics, religion
economic knowledge
autonomous and abstract economic thought
• Normative role
analysis
• Specific sectors
economic ideas
object of study
economy as a whole
descriptive and positive
the functioning of the
Greek Thought
• Hesiod (late 8th – early 7th century BC)
• Theogony: scarcity and the myth of Pandora
• Works and Days: how to manage an agricultural estate?
Efficiency as the ratio between inputs and outputs
• Plato (427 B. C. -349 b. C) Republic, Laws, Socratic
Dialogues
Xenophon (430–355 BC)
• Oeconomicus (from oikos = household, nomos = rule):
describes the principles of good household management
Aristotle (384–322 BC)
• Oeconomicus; Politics; Nicomachean Ethics
Hesiod - Works and Days
• Didactic poems addressing the transition from an agricultural
system to commerce. He highlights uncertainty, division of
labor, and scarcity (myth of Pandora).
• Scarcity: λιμός (limós) = famine, hunger; πενία (penía) = lack,
poverty.
The myth of Prometheus and Pandora illustrates the origins of
scarcity and hope (Elpis). Reading
• Division of labor, self-sufficiency, scarcity, and human work ->
Ergon
-> Reading and interpretation
The different ‘names’ of work
• • Ponos = low-level labor, manual, exhausting, domestic,
heavy, or agricultural work. Performed by non-citizen women,
slaves, and animals. Purely physical work, imposed by
necessity.
• Ergon = based on free will, but required technē or technical
knowledge and practical skills, such as the potter shaping clay
or
the
painter
mastering
color.
• Poiesis = for example, poetry. Agamben describes poiesis as
'production in presence,' bringing an idea into material
existence.
• Praxis = the political activity of governance and citizenship
Ideally carried out by free male citizens (Aristotle, Politics) or
both male and female citizens (Plato) to ensure the continuity
of the community.
The Economy of the Good – Plato
Plato (427 BC, Athens). In the Republic, he describes
the ideal city.
• The ultimate goal of life is the pursuit of the Good.
• To know it, one must act virtuously, fulfilling one’s
function excellently.
• Work is part of this pursuit: division of functions,
common property, and gender relations.
Organization and Virtues
To achieve the Good, society needs forms of organization.
Justice (dikaiosýnē) means everyone fulfilling the role for
which they are best suited.
Justice = minding one’s own business and not interfering in
others’ roles.
Moderation (sōphrosýnē): harmony, like singing in tune
together.
• Courage (andreía): preserving what is consolidated in
opinion and knowledge keeping in mind what could be
terrible.
• Prudence (phrónēsis): judgment, seeing beyond ourselves
and within ourselves, taking time before deliberating.
Aristotle’s perspective
The risks of chrematistics vs. oikonomia
Happiness and the necessary political dimension of human
life
The virtues as essential to economic and political life
Oikonomia
1. Subsistence of the family and preservation of the polis
2. Wealth as sufficient means to satisfy limited needs and
enable political participation
3. Natural and limited oikonomia vs. unlimited and unnatural
chrematistics (wealth from money exchange)
Oikos = realm of poiesis (production); Polis = realm of praxis
(political action).
Social animals
Aristotle: humans are political animals by nature.
Happiness is achieved within a community, aimed at a good life.
The State is a natural product, prior to the individual.
Thw meaning of happiness: Happiness is not the mere pursuit of
gain, which is unnatural.
Wealth has value only as a means to other ends.
Happiness is a condition of good life that can be achieved only
together (words, dialogue, political life)
Politics
The political community is where humans discover the
purposes of action, including economic action.
Through free relationships among equals, people understand
happiness.
Politics is the ‘architectonic science’.
• The polis consisted of families (oikiai) producing for
subsistence, and the politeia, composed of the Assembly
(Ecclesia), the court (Areopagus), and the Council.
• The paterfamilias, wife, children, and slaves had
hierarchical and unequal relations. Slaves were
considered the property of the head of the household.
• The householder or the good administrator of the oikos
(oikonomos, household manager ), the wife, the children,
and the slaves each had a role to play in ensuring the
proper functioning of the whole and in securing the longterm survival of the family and the community. This reflects
an organicist vision, in which the different parts fulfill a
function for the harmony of the whole
Context
Ancient Greece
Polis -City-State
Oikiai- Families:
it was composed of paterfamilias;
It was a space of goods’ production
for subsistence
• The city-state/ Polis
Politeia:
it was composed of an Assembly (Ecclesia),
a Court (Areòpago) and a Council:
Institutions for political participation
of citizens
Oikonomia
The Household Management in the Ancient Greek Economy
• Oikos = House
• Nemein = to manage
Physical space
Things: Properties, Goods
People: Slaves, Women,
Rules and practices
for good management of the oikos
Which relationships within the economic
organization?
• Oikos is composed of the head of the family/pater
familias); wife; sons; slaves
Hierarchical relationships and inequality
Pater familias
Wife/children
Slaves
All the components play a functional role preserving the òikos. Slaves were property of the master
Natural/Unnatural; Moderate /limitless
•
Wealth can be used in two ways: natural and unnatural
•
Private property is natural if it serves a useful function in society. It is unnatural if
its aim is the pursuit of economic gain
•
Production is unnatural if it satisfies desires (wants) (limitless). It is natural if it is
intended for satisfying needs (moderate)
•
The use of money is unnatural if it is for gain or speculation. It is natural if it is
used to buy the necessary goods
➢ Unlimited is unnatural because to be limitless is to be unrelated to the whole
➢ Isolated agents are beasts or gods
➢ Isolated people or isolated parts of the world (without relationships to the whole)
have their ends in themselves …without constraints…unlimited desires
➢ Participating in the life of the whole or of the political community it is possible to
identify the goals that provide the measure of things
A good economy?
What does « good administration » mean? What can be considered as
« good » ? In relation to which aspects, values or norms ?
The relationship to ends establishes the limit and the natural character of
things or decisions
Referring to wealth, the ownership or the storage of the amount of goods was
limited by their use finalized to subsistence needs. Furtherly, the extent and
the structure of needs could not be defined if the householder did not
participate – as free citizen – to political life and did not have in mind the
primary aim of the community (the polis), that is well-being or happiness
The Oeconomicus by Xenophon The dialogue
between Socrates and Critobulo
• A manual on the art of the good administration of the house
• Within the dialogue the protagonists ask themselves why some people are
successful in business and achieve a higher level of wellbeing in respect to
others
• Which are the elements to respect in order to realize a good administration of
the domestic life of the oikos and then obtaining a higher level of wellbeing?
• Nature, ‘capabilities’, virtues
• Some features of the ‘good' economic administration of domestic life are: order,
prudence, maintaining properties and goods in a manner that can be caught by
the eye of the householder
Economic goods, political ends, ethical
actions: the way to happiness
• We can define as “economic goods” those things that allow
the subsistence of oikos and offer the possibility of political
participation making people free from their concrete and
daily needs
• In order to realize the community’s main goals which are
identified through political activities (Politics in Aristotle’s
perspective is the architectural science of communities),
every part of the community (families too) have to fulfil its
natural potential
• The natural potential of things, people and relationships can
be discovered participating to the life of a whole, of a
community