Economic Thought Of Aristotle and Plato

Aristotle and Plato con­tained important economic ideas, and became a distinct factor in shaping economic doctrines.

Origin of the State; First Economic Interpretation of His­tory. — One of the striking facts about the political thought of certain Greek thinkers is that it rests upon what may be truly called an economic interpretation of history. To be sure, the Athenian philosopher's conception of history was imperfect, and by an economic interpretation is not meant a materialistic one; but with these modifications, the statement is broadly true. Witness the following from Plato: "A State, . . . arises, as I conceive, out of the needs of mankind; no one is self-sufficing, but all of us have many wants. . . . Then, as we have many wants, and many persons are needed to supply them, one takes a helper for one purpose and another for another; and when these partners and helpers are gathered together in one habita­tion the body of inhabitants is termed a State. . . . And they exchange with one another, and one gives, and another receives, under the idea that the exchange will be for their good." The origin of the state, then, is traced to the lack of individual self-sufficiency in the satisfaction of wants, and to the ad­vantage of specialization and exchange. Such reasoning indi­cates an important step toward the development of economic analysis.

On this point, the doctrine of Aristotle, who was probably the greatest of all the thinkers of antiquity, begins in a less purely rational way. He assumes that an impulse to political association is innate in all men: "Man is naturally a social animal." The genesis of the state, however, is found in the household, which, in its turn, rests upon the inability of male and female to exist independently, and upon the inequality among men which leads to slavery. The household is "the association naturally formed for the supply of everyday wants." Then comes the village, and finally the state: "Lastly, the association composed of several villages in its complete form is the State, in which the goal of full independence may be said to be first attained." The state is formed to make life possible.