Ancient Greece 117 The topic of blissful ignorance and the trade-off between harmony on the one hand and technical advances on the other appear quite frequently in Greek thought. People have been cast out, disconnected from their natural state, and now they work to earn their way back to try to approach a more blissful state. ARISTOTLE We could present Aristotle as one of the first rigorous and systematic scholars Parmenides and Plato s Socrates compare themselves to initiates into a mystery religion. Aristotle s philosopher, by contrast, is what we might call a professional human being 99 and perhaps even the first rigorous scientist. His moral teachings are in this sense absolutely primal religious references or arguments (as opposed to Plato, in whose case we could be witnesses to a sort of transitional state between myth and analysis). The pre-socratics used aesthetics and mnemonics (such as rhythm and rhyme) as bearers of truth. Plato sought the truth in dialogue and abstraction, and to a certain extent an emphasis on fantasy. The argumentation and style of Aristotle s writings are in no way different from today s narrative scientific discourses. It was Aristotle who was the first to begin acting like a scientist in today s meaning of the word. His understanding of philosophy and science were, despite this, much wider than we understand it today. First, he did not strictly distinguish science from philosophy (as happened later), and second, he classified things as science that we probably would not so classify today. For Aristotle, all science ( dianoia) is either practical, poetical or theoretical. 100 He included poetry and practical fields into science. By practical science, he means ethics and politics; by poetical science, he means the study of poetry and the other fine arts; by theoretical science, he means physics, mathematics, and metaphysics. The majority of his scientific work was qualitative, not quantitative, and to him mathematics was very close to theoretical philosophy and metaphysics. It was Aristotle who, figuratively speaking, brought earth to the center of attention. It was he who argued that we need philosophy to show us the way back to the ordinary. 101 Instead of having his head in the world of ideas, he swam with the fish on the island of Lesbos, observing the behavior of octopii and animals in the forest. He argued that the form of an apple exists in the apple, not in the world of ideas. For this reason he examined apples and in general classified all creation into genii that causes desolation, spoken of through the prophet Daniel let the reader understand then let those who are in Judea flee to the mountains. 99 Nussbaum, The Fragility of Goodness: Luck and Ethics in Greek Tragedy and Philosophy, 261. 100 Aristotle, Metaphysics, 1025b25. 101 Nussbaum, The Fragility of Goodness: Luck and Ethics in Greek Tragedy and Philosophy, 260.
118 Ancient Economics and Beyond and species. He was what we could call today an empiricist, while Plato would be classified today rather as the beginning of the rationalist tradition. All of this was surprising for its time, unnatural to the point of being irritating, and occasionally met with resistance. Aristotle s audience seems to have rebelled against his taste for the ordinary and the worldly, demanding instead the lofty and rarefied concerns. 102 And so earthly things as presented by Aristotle get attention, and the world of Platonic ideas is somewhat pushed to the shadowy background. Aristotle devoted his attention to precisely the things that for Plato grandly stated were shadowplay. This is how strategy, economics, rhetoric got the same attention as even the most highly esteemed of capacities. 103 If we were to summarize Aristotle s teachings in a few sentences, then aside from his groundedness, we would have to mention his sense for the purpose of things, telos. As opposed to Plato, he did not examine invariability as much but concentrated on the sense, the goal of movement, because wish is for the end. 104 Similar to other ancient schools (moreover the same as with the Hebrews and Christians), he places a major role on morals (specifically on the ethics of virtue, which today is being rediscovered 105 ), and the good life is unimaginable without the study of good and evil. To present a practical example: Aristotle explains the falling of material things toward the ground as their nature. The stone comes from the earth and wants to return there; its meaning is to be on/in earth. This is similar to gas, fire, or the soul wanting to go upward. This explanation sufficed for a long time, until it was replaced by Newtonian gravitation. The history of economic thought in many textbooks actually starts with Aristotle. It was he who defends private ownership, for example, 106 criticizes usury, 107 distinguishes between productive and unproductive economic activity, 108 categorizes the role of money, 109 notes the tragedy of 102 Nussbaum, The Fragility of Goodness: Luck and Ethics in Greek Tragedy and Philosophy, 260. 103 Aristotle, Nicomachean Ethics, 1094b3. 104 Ibid., 1113a15. 105 By virtue ethics we mean the ethics based on virtue (not on responsibility, benefit, utility, or the calculus of impact outcomes). For more see MacIntyre, After Virtue. MacIntyre was originally an Aristotelian who later became a Thomist, who in his own words was a better Aristotelian than Aristotle himself. MacIntyre, After Virtue, x. Plato was the founder of virtue ethics, but Aristotle really established it. Virtue ethics was the dominant ethical school of our civilization until the Enlightenment, when it was partially replaced with utilitarianism or Kantian deontology (morals founded on responsibility, on good intentions, following rules). 106 Aristotle, Politics, 2.5. 107 Ibid., 1258b. 1.10. 108 Ibid., 1.10. Aristotle distinguishes here between good economics practiced for the general benefit and bad chremastics, the unbridled accumulation of wealth for wealth itself. 109 Ibid., 1.8 10.
Ancient Greece 119 the community s commons, 110 and deals with the issue of monopolies. 111 Nevertheless, here we want to focus on those of his observations that were key for the development of the economy but have not been much elaborated on by economists. For example, Aristotle deals in depth with utility and its role in life, deals with maximization functions, which economics to this day is obsessed with (the only difference being that today we consider them only in their mathematical form, which frequently conceals deeper philosophical discussion), and other key areas we would today call metaeconomics, or that which goes far beyond household management and asks about the meaning and purpose ( telos) of these efforts. Eudemonia: Happiness Being a Sort of Science Aristotle asks about the things probably everyone is interested in: How to live a happy life? What does it mean for a person to live in such a way as to achieve the life we all desire? A question of happiness eudaimonia is far from theoretical: the present inquiry does not aim at theoretical knowledge like the others (for we are inquiring not in order to know what excellence is, but in order to become good). 112 His second book on ethics, Eudemian Ethics, starts in a similar way to Nicomachean Ethics: How to acquire a good life, for happiness is at once the most beautiful and best of all things, 113 as he states right in the first paragraph of the book. How much a blissful life is bound with good and how to achieve it ( happiness being a sort of science 114 ) is something we will present below. First, it must be said that Aristotle sees private good only in the context of good for the society as a whole. He is famous for his statement that man is by nature a political animal. 115 In addition, he did not attribute a mechanistic character to society, as was later taken up in economics, but rather an organic one: Without the rest, one part not only makes no sense at all, but mainly it cannot live. 116 At the same time, man does not associate into societies for his benefit, but because it is in his nature. 117 Utility is nevertheless a complicated thing, and it is constantly transforming. The question is: What has an essential influence on utility? Aristotle does not see utility as something that exists for a moment and is then gone, but as a state that man can but does not have to be aware of. He also notes that there is something of a hierarchy of utility, as if to 110 Aristotle, Politics, 2. 3, 1261b. 111 Ibid., 1.11. 112 Aristotle, Nicomachean Ethics, 1103b27 29. 113 Aristotle, Eudemian Ethics, 1214a6 7. 114 Ibid., 1214a18 19. 115 Aristotle, Politics, 1.1253a2. 116 For a different reading of social and economic processes in the Nicomachean Ethics and Politics, see Polanyi, Aristotle Discovers the Economy. 117 Aristotle, Politics, 2.1.1261a18, 3.1.1275b20.
120 Ancient Economics and Beyond say that we will not perceive utility from higher needs unless basic (natural) needs are fulfilled. He also notes that pleasures mutually crowd each other out: activities are hindered by pleasures arising from other sources... the more pleasant activity drives out the other... e.g., in the theatre the people who eat sweets do so most when the actors are poor. 118 MaxU versus MaxG Whether or not man does everything because he is maximizing utility, pleasure, is to a large degree a nonsensical question for Aristotle. Pleasure, according to him, only completes activity, which he repeats many times. But whether we choose life for the sake of pleasure or pleasure for the sake of life is a question we may dismiss for the present. For they seem to be bound up together and not to admit of separation, since without activity pleasure does not arise, and every activity is completed by pleasure. 119 The term pleasure, however, is not inseparably joined with the concept of perfection and good: The highest pleasure in the most perfect activity, pleasure is just a reward, an onus Pleasure completes the activity. 120 Pleasure is not the purpose; goodness and perfection are. Pleasure therefore is something like the cherry on top of perfection and the activities pointing to it. 121 It is not the meaning of activity, but its accompanying expression. The purpose of activity ( telos) is good. In today s economics, we are somehow automatically used to the command MaxU, where man maximizes utility. There are tens of thousands of mathematical exercises that maximize utility functions, optimize utility and derivations seeking marginal utility, or balance marginal utility with marginal price, respectively profits with costs. In the vast majority of cases, however, we do not realize at all the astounding philosophical and ethical storm raging under those columns. The concept of utility as good (and therefore also as a goal) was one of the main cores of the dispute between the Epicureans and the Stoics. Like Plato, Aristotle was closer to the Stoics. At the same time, Aristotle knew a sort of precursor of the maximization function. But instead of utility, he maximizes good, MaxG. Right in the first sentence of Politics, he says: [E]veryone always acts in order to obtain that which they think good. 122 118 Aristotle, Nicomachean Ethics, 1175b2 13. 119 Ibid., 1175a19 22. 120 Ibid., 1174b23. 121 MacIntyre, one of the key modern Aristotelians, defines eudemonia as the state of being well and doing well in being well, of a man s being well-favored himself and in relation to the divine. MacIntyre, After Virtue, 148. 122 Aristotle, Politics, 1.1.1252a2 3.
Ancient Greece 121 This is similar to the first sentence of the Nichomachean Ethics: Every art and every inquiry, and similarly every action and choice, is thought to aim at some good; and for this reason the good has rightly been declared to be that at which all things aim. 123 He goes into greater detail on the term pleasure in the tenth book of Nicomachean Ethics. This book starts with the following sentence: [W]e ought perhaps next to discuss pleasure. For it is thought to be most intimately connected with our human nature... men choose what is pleasant and avoid what is painful. Yes, this sounds like an introductory economics textbook. But Aristotle continues: For some say pleasure is the good, while others, on the contrary, say it is thoroughly bad. 124 When, for example, at the end of Nicomachean Ethics he has a dispute with the hedonist Eudoxos, who thought pleasure was the good because he saw all things, both rational and irrational, aiming at it, he tells him: This argument seems to show it [pleasure] to be one of the goods, and no more a good than any other. 125 Aristotle does not deny that pleasure is part of good, but it is not in its identity, as the Hedonists argued. To this day, economists still have to deal with a question similar to the one Aristotle asked: [B]oth the general run of men and people of superior refinement say that it is happiness, and identify living well with and faring well with being happy; but with regard to what happiness is they differ. 126 To this day, you can drive economists mad with the same question: If people maximize their utility, what is the term utility understood to mean? That is a more complicated question than it may appear, and we will discuss it later, in the second part of the book. We will be very brief here. Along with Aristotle we can argue that man in reality does not maximize his utility, but that he maximizes good. Man simply does what he considers good. And doesn t everyone imagine something different under the term good? Yes, and that is the point: The same is also true for utility. If we take Aristotle s point of departure seriously, that everyone does everything for the sake of what they believe to be good, 127 then it is possible that utility is only a subset of that which we consider good. We get no utility from certain things (or very halting and clumsily defensible), we would be speaking more simply if we said that a given person did something because he considered it to be good, instead of saying for maximizing his or her utility. It might be much more natural to say that Francis of Assisi gave away all of his possessions because he considered it good, not 123 Aristotle, Nicomachean Ethics, 1094a1 3 and on the household, as a sort of subset of the city-state... the end of medical art is health..., that of economics wealth. Aristotle, Nicomachean Ethics, 1094a8 9. 124 Ibid., 1172a19 29. 125 Ibid., 1172b10 28. 126 Ibid., 1095a14 23. 127 Aristotle, Politics, 1.1.1252a1 7.
122 Ancient Economics and Beyond for utility; that Socrates decided not to renounce his teachings and run away but to drink poison, not because he expected utility after death, but because he considered it good. MaxG is therefore more defensible and, what s more, a more useful concept than MaxU. Utility of Good and Evil If we make this alteration, we can already see how tightly bound our perceptions are with the economics of good and evil. It is hard to imagine that a person would voluntarily and freely do something that he considers at a given moment to be completely evil. If a person steals, for example, they do not steal for stealing s sake (which they themselves would certainly consider to be evil) but, for example, to get richer, which they consider good. The goal is not to steal but to have more money. Ultimately we could hold a similar discussion with the assumption of MaxU. 128 Why does a person steal? Because it increases their utility? Never. They do not steal for the stealing itself but because it has utility from getting rich, for example. Or adrenaline or revenge. But whatever the reason why a person steals (or carries out other crimes), they do so for some good (therefore the goal of telos, which they see behind it). 129 MaxG can therefore explain the same things as MaxU, but in addition is able to explain the wider context of these actions. If we want to consider the theorem of MaxG as absurd (and to a certain extent it is, because it cannot be refuted, as we will see in the second part of the book), then the theorem of MaxU must also be absurd. Except that the absurdity of MaxG appears to be more visible. Maybe because of this, economics hides behind MaxU: so that the trick isn t so visible. That we do not do things with the goal of momentary and unilateral MaxU, which Aristotle considers in the term pleasure, will be shown in the following example: And there are many things we should be keen about even if they brought no pleasure, e.g., seeing, remembering, knowing, possessing the excellences. If pleasures necessarily do accompany these, that makes no odds; we should choose these even if no pleasure resulted. 130 We want these things because they are good, and they are good because they are a natural part of humanness. So a human is more human if he sees, remembers, knows, and is virtuous. 128 In this, Aristotle is closer to the Stoics: [M]ost men, and men of the most vulgar type, seem (not without some reason) to identify the good, or happiness, with pleasure; which is the reason why they love the life of enjoyment. Nicomachean Ethics, 1095b15 17. But people of superior refinement and of active disposition identify happiness with honour... but the good we divine to be something of one s own and not easily taken from one. Further, men seem to pursue honour in order that they may be assured of their merit. Ibid., 1095b24 29. 129 In this he is in agreement with Plato s teachings: [T]he man who is truly good and wise, we think, bears all the chances of life becomingly and always makes the best of circumstances. Ibid., 1101a1 2. 130 Ibid., 1174a4 9.
Ancient Greece 123 We have the feeling of bliss, pleasure, or happiness if we manage to achieve a good goal. It is hard for utility to be a goal in and of itself; the goal is goodness, and utility is its by-product, an externality. That which is good for a man is also the source of pleasure (for example, food); thus is our world built. We do not eat for pleasure only, but we have pleasure eating. Aristotle would most likely protest against today s approach, where the maximization of utility is often automatically considered human nature. He considers what can simply be considered moderation to be the greatest virtue: evil belongs to the class of unlimited 131 and good to that of the limited... for these reasons also, then, excess and defect are characteristic of vice and the mean of excellence. 132 This is therefore not about the maximization of utility, as the Epicureans argued, but about temperance. The goal is somewhere in between. Let s use an example: With regard to giving and taking of money, the mean is liberality, the excess and the defect prodigality and meanness. 133 Or on a more general level: So too it is, then, in the case of temperance... the man who indulges in every pleasure and abstains from none becomes self-indulgent, while the man who shuns every pleasure, as boors do, becomes in a way insensible; temperance and courage, then, are destroyed by excess and defect, and preserved by the mean. 134 It is thus, then, that every art does its work well by looking to the intermediate and judging its work by this standard. 135 So, the key is not maximization at any cost but aiming for the center. For in everything it is no easy task to find the middle. e.g., To find the middle of a circle is not for every one but for him who knows; so too, any one can get angry that is easy or give or spend money; but to do this to the right person, to the right extent, at the right time, with the right aim, and in the right way, that is not for every one, nor is it easy; that is why goodness is both rare and laudable and noble. 136 To this it could be added that such a point (the middle) is not easy to recognize. Hence it is no easy task to be good. For in everything it is not easy task to find the middle ; 137 a person must feel about for it. We do not recognize the bliss point easily. 138 131 Aristotle, Nicomachean Ethics, 1106b29 30. 132 Ibid., 1106b31 34. 133 Ibid., 1107b9 10. 134 Ibid., 1104a19 27. 135 Ibid., 1106b6 7. 136 Ibid., 1109a25 29. 137 Ibid., 1109a24. 138 Searching for the mean is one of the greatest questions of Aristotelianism it is not trial and error, empirical, but may be according to Plato fronésis practical wisdom; see Gadamer, The Idea of the Good in Platonic-Aristotelian Philosophy.