I recently found myself in the library for a meeting. In the minutes between my arrival and the start of the meeting, I browsed a selection of new books and happened upon How to Think Like an Economist: Great Economists Who Shaped the World and What They Can Teach Us by Robbie Mochrie.
Interesting….
Just the other day I was perusing my own library in search of content related to economics. Perhaps that’s why this green and white book jumped out at me. It is mine until the end of my turn. The book opens thusly: What is the economy? An excellent question. It goes on to state that it’s “everything useful, everything valuable and everything linking us to other people.”
All that and more.
Etymologically, the word is rooted in Greek oikonomia, which referred to household management. “Home economics" these days, according to my public high school, is about sewing pillows and quilting and carrying a crying baby doll everywhere you go for a week. According to Wendell Berry, home economics is land husbandry and a desire to make oneself “responsibly at home.” More colloquially, economics is about philosophy, history, war. It’s about inflation, interest rates, the stock market, and bonds. It’s about money.
M o n e y
Who has it,
and who doesn’t.
They say our world is ruled by the ideas of economists. Or at least Robert L. Heilbroner said that in his book The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. A bold thought. Is it true?
It certainly seems that our world is ruled by money/wealth/capital, and the people who influence those things. Is that the same thing as being ruled by the ideas of economists? Regardless, it seems one might do well to pay attention to those ideas and their origins. Heilbroner encourages such examination. He says that by studying the great economic thinkers we can “rediscover the roots of our own society in the welter of social patterns” that they discerned.
Seeking patterns and meaning in social history is at the heart of studying economics.
I wonder what patterns and meaning I might observe
if I were to pay attention?
The multiplicity of economic thought and the depth of economic history is profound. Given that the universe of economics is so multifaceted (and contradictory), and given the sheer pomposity of it all, the amateur study of economics is rather intimidating – at least that’s how I experience it.
Last month I presented to you an excerpt from How to Live, a chapter entitled Pay Attention, which compelled us to acknowledge that perspectives and philosophies have lineages that go back centuries. And so for our second “assignment,” let us start at the beginning, as it were, of economic thought with chapter one of How to Think Like an Economist: Great Economists Who Shaped the World and What They Can Teach Us by Robbie Mochrie.
Apparently “the first economic thought emerged” 2500 years ago during the Peloponnesian War. (Did people really not have thoughts about household management before then? Should I be embarrassed that I don’t know anything about the Peloponnesian War?)
Insert summary of the history of Western philosophy and a
basic introduction to Socrates (the professional gadfly),
Plato (the rational idealist), and
Aristotle (the realist).
Mochrie continues:
To these three great philosophers, we should add Xenophon, an Athenian mercenary soldier, who was a contemporary of Plato, and admirer of Socrates. In later life, having been exiled from Athens, and settled in Sparta, he wrote on a wide range of topics, including economics. When Sparta was conquered by Thebes, he was exiled again, and ended his life in Corinth. This was a time when thinking was dangerous.
Xenophon’s Oikonomikos is about the skills required to manage a household. Aristotle wrote a treatise with the same title, but only small fragments have survived. Plato has sometimes been credited as the author of Eryxias, a dialogue on questions of economic morality. All of them defined oikonomia as practical household management, but they were also interested in what it meant to manage resources ethically. They thought about how we could manage our appetites, so that we might set aside resources which would be used for public good. Living through the first experiments with democracy, they wanted to explain how to manage communal, as well as personal, resources.
It’s important to clarify that, while they may have been living through the “first experiments with democracy” and democratic institutions, more than half of Athenians were enslaved, and the elite men who were allowed to participate in their so-called democracy constituted only 20% of the population.
I digress.
Aristotle argued that knowledge comes from applying reason about causes of change to what can be observed. Contemporary systemic study of physics, biology, aesthetics, rhetoric, and politics thus have Aristotelian roots.
For his economic analysis, it was important that Aristotle treated man as a social animal, with language necessary for the maintenance and development of social relations. By also defining man as a moral animal, who would achieve happiness through the exercise of virtue, he was effectively defining what it meant to be an Athenian citizen, able to pursue political activity as part of the exercise of virtue. Within this definition, there was an implication that the state should ensure that everyone had access to the resources needed for full human flourishing. Together, the political community and economic activity within the city should ensure the well-being of the citizenry.
Aristotle’s economic analysis emphasized striving to balance miserliness and extravagance, inviting people to have the wherewithal to find “the mean between self-denial and self-induglence.” His analysis also compartmentalized household management from the art of acquiring money. He did not believe that the pursuit of acquiring money could ever lie on the path of virtue – a distinction that illuminates the divergence of modern economics from classical antiquity.
Yet Aristotle’s way of thinking remained influential for a thousand years. (Or, as my friend Charlie puts it, the shadow of his thought has loomed darkly for a very long time. Charlie is not a fan.) Aristotle’s statements on economics were taken as authoritative. While the day to day life of an Athenian during Aristotle’s time lacked the kind of market-based activity upon which we tend to base contemporary notions of the economy, and while “no one would call Aristotle an economist,” his commentary on economics remains a functional starting point for thinking like one.
With that, I invite you to read the chapter, and then to contemplate your answers to the following questions. Then I encourage you to invite a friend out for a walk or in for a cup of coffee to discuss your thoughts.
Are we living in a time when thinking is dangerous? Did any of your ancestors live in a time when thinking was dangerous?
What is public virtue?
What are the challenges of climate change – economic or otherwise – projected to be?
What does the well-being of the citizenry entail?
Does our “political community and economic activity” ensure our well-being?
May you learn something new about yourself and the friend(s) with whom you discuss these questions 🙏🏻.
PS -- My confession is that I have not read this whole book (but, then again, I did warn you that I don't often hold myself to the standard of doing so). I'm looking forward to making my way through it as I continue to seek a deeper understanding of the economy and the history of economic thought.
PPS -- I wonder: Do you pay attention to economics? If so, what exactly are you paying attention to? What would you have me learn about, if you were to recommend a resource on my learning journey?