histofthought1

10 Economic thought before Adam Smithdevelop a mathematics ofjustice and of economic exchange. The next importantpositive development was contributed by the pre-Socratic (actually contemporaryof Socrates) Democritus (c.460-c.370 Be).This influential scholar from Abdera was the founder of 'atomism' incosmology, that is, the view that the underlying structure ofreality consists ofinteracting atoms. Democritus contributed two important strands of thoughtto the development of economics. First, he was the founder of subjectivevalue theory. Moral values, ethics, were absolute, Democritus taught, buteconomic values were necessarily subjective. 'The same thing', Democrituswrites, may be 'good and true for all men, but the pleasant differs from oneand another'. Not only was valuation subjective, but Democritus also sawthat the usefulness of a good will fall to nothing and become negative if itssupply becomes superabundant.Democritus also pointed out that if people restrained their demands andcurbed their desires, what they now possess would make them seem relativelywealthy rather than impoverished. Here again, the relative nature ofthesubjective utility of wealth is recognized. In addition, Democritus was thefirst to arrive at a rudimentary notion of time preference: the Austrian insightthat people prefer a good at present to the prospect of the good arriving in thefuture. As Democritus explains, 'it is not sure whether the young man willever attain old age; hence, the good on hand is superior to the one still tocome'.In addition to the adumbration of subjective utility theory, Democritus'sother major contribution to economics was his pioneering defence of a systemof private property. In contrast to Oriental despotisms, in which allproperty was owned or controlled by the emperor and his subordinate bureaucracy,Greece rested on a society and economy of private property.Democritus, having seen the contrast between the private property economyof Athens and the oligarchic collectivism of Sparta, concluded that privateproperty is a superior form of economic organization. In contrast to communallyowned property, private property provides an incentive for toil anddiligence, since 'income from communally held property gives less pleasure,and the expenditure less pain'. 'Toil', the philosopher concluded, 'is sweeterthan idleness when men gain what they toil for or know that they will use it'.1.5 Plato's right-wing collectivist utopiaPlato's search for a hierarchical, collectivist utopia found its classic expressionin his most famous and influential work, The Republic. There, and laterin The Laws, Plato sets forth the outline of his ideal city-state: one in whichright oligarchic rule is maintained by philosopher-kings and their philosophiccolleagues, thus supposedly ensuring rule by the best and wisest in thecommunity. Underneath the philosophers in the coercive hierarchy are the