histofthought1

The first philosopher-economists: the Greeks 13something that an owner has neither the ability nor the knowledge to usecannot really constitute part of his wealth.Another insight was Xenophon's anticipation of Adam Smith's famousdictum that the extent of the division of labour in society is necessarilylimited by the extent of the market for the products. Thus, in an importantaddition to Plato's insights on the division of labour, written 20 years afterThe Republic, Xenophon says that 'In small towns the same workman makeschairs and doors and plows and tables, and often the same artisan buildshouses... ' whereas in the large cities 'many people have demands to makeupon each branch of industry', and therefore 'one trade alone, and very ofteneven less than a whole trade, is enough to support a man'. In large cities', wefind one man making men's boots only; and another, women's only' ... oneman lives by cutting out garments, another by fitting together the pieces'.Elsewhere, Xenophon outlines the important concept of general equilibriumas a dynamic tendency of the market economy. Thus, he states thatwhen there are too many coppersmiths, copper becomes cheap and the smithsgo bankrupt and turn to other activities, as would happen in agriculture orany other industry. He also sees clearly that an increase in the supply of acommodity causes a fall in its price.1.7 Aristotle: private property and moneyThe views of the great philosopher Aristotle are particularly important becausethe entire structure of his thought had an enormous and even dominantinfluence on the economic and social thought of the high and late MiddleAges, which considered itselfAristotelian.Although Aristotle, in the Greek tradition, scorned moneymaking and wasscarcely a partisan of laissez-faire, he set forth a trenchant argument infavour of private property. Perhaps influenced by the private-property argumentsof Democritus, Aristotle delivered a cogent attack on the communismof the ruling class called for by Plato. He denounced Plato's goal of theperfect unity of the state through communism by pointing out that suchextreme unity runs against the diversity of mankind, and against the reciprocaladvantage that everyone reaps through market exchange. Aristotle thendelivered a point-by-point contrast of private as against communal property.First, private property is more highly productive and will therefore lead toprogress. Goods owned in common by a large number of people will receivelittle attention, since people will mainly consult their own self-interest andwill neglect all duty they can fob off on to others. In contrast, people willdevote the greatest interest and care to their own property.Second, one of Plato's arguments for communal property is that it isconducive to social peace, since no one will be envious of, or try to grab theproperty of, another. Aristotle retorted that communal property would lead to