Republic 2 ) is no more analysis than a painter’s rendering of a Venus is scientific anatomy. It goes without saying that on this plane the contrast between what is and what ought to be loses its meaning. The artistic quality of the Politeia and of the whole literature—mostly lost—of which the Politeia seems to have been the peak achievement is well brought out by the German term for it, Staatsromane (literally: state novels). In default of a satisfactory English synonym we must use the word Utopia. The reader presumably knows that more or less under the influence of the Platonic example, this type of literature again found favor in the Renaissance and then continued to be produced, sporadically, to the end of the nineteenth century. 3 But analysis comes in after all. There is a relation between the painter’s Venus and the facts described by scientific anatomy. Just as Plato’s idea of ‘horseness’ obviously has something to do with the properties of observable horses, so his idea of the Perfect State is correlated with the material furnished by the observation of actual states. And there is no reason whatever to deny the analytic or scientific character—remember: we do not attach any complimentary meaning to either of these words—of such observations of facts or relations between facts as are enshrined, explicitly or by implication, in Plato’s construction. Reasoning of an analytic nature is still more prominent in a later work, the Nomoi (Laws). But nowhere is it pursued as an end in itself. Consequently it does not go very far. Plato’s Perfect State was a City-State conceived for a small and, so far as possible, constant number of citizens. As stationary as its population was to be its wealth. All economic and non-economic activity was strictly regulated—warriors, farmers, artisans, and so on being organized in permanent castes, men and women being treated exactly alike. Government was entrusted to one of these castes, the caste of guardians or rulers who were to live together without individual property or family ties. The changes introduced in the Nomoi are considerable—chiefly they are compromises with reality— but they do not touch the fundamental principles involved. This is all we need for our purpose. Though Plato’s influence is obvious in many communist schemes of later ages, there is little point in labeling him a communist or socialist or a forerunner of later communists or socialists. Creations of such force and splendor defy classification and must be understood in their uniqueness, if at all. The same objection precludes attempts to claim him as a fascist. But if we do insist on forcing him into a strait jacket of our own making, the fascist strait jacket seems to fit somewhat better than the communist one: Plato’s ‘constitution’ does not exclude private property except on the highest level of the 2 The standard English translation by B.Jowett includes introductory essays on Plato’s life, writings, and philosophy, and an analysis of the work. 3 The best interpretation of Greek Staatsromane that I know of—and one that is itself a work of art—is Edgar Salin’s Platon und die griechische Utopie (1921). This literature naturally reflects the social movements of its time, a subject into which it is impossible to enter here. See Robert von Pöhlmann’s Geschichte der sozialen Frage und des Sozialismus in der antiken Welt (1912). History of economic analysis 52 purest ideal; at the same time it enforces a strict regulation of individual life, including limitation of individual wealth and severe restrictions upon freedom of speech; it is essentially ‘corporative’; and it recognizes the necessity of a classe dirigente—features that go far toward defining fascism. The analytic background, such as it is, comes into view as soon as we ask the question: why this rigid stationarity? It is difficult not to answer (however pedestrian such an answer may sound to the true Platonist) that Plato made his ideal stationary because he disliked the chaotic changes of his time. His attitude to contemporaneous events was certainly negative. He hated the Sicilian tyrannos (though we must not translate this word by tyrant). He almost certainly despised the Athenian democracy. Yet he realized that tyranny grew out of democracy and was, in any case, the practical alternative to it. Democracy, in turn, he interpreted as the inevitable reaction to oligarchy, and this again he traced to inequality of wealth, the consequence, as he thought, of commercial enterprise (Politeia VIII). Change, economic change, was at the bottom of the development from oligarchy to democracy, from democracy to tyranny (of a popular leader), that was so little to his taste. Whatever we may think of Platonic stationarity as the remedy, is there not a piece of—almost Marxian—economico-sociological analysis behind that diagnosis? We need not stay to consider the numerous economic topics that Plato touched upon incidentally. It will suffice to mention two examples. His caste system rests upon the perception of the necessity of some Division of Labor (Politeia II, 370). He elaborates on this eternal commonplace of economics with unusual care. If there is anything interesting in this, it is that he (and following him, Aristotle) puts the emphasis not upon the increase of efficiency that results from division of labor per se but upon the increase of efficiency that results from allowing everyone to specialize in what he is by nature best fitted for; this recognition of innate differences in abilities is worth mentioning because it was so completely lost later on. Again, Plato remarks in passing that money is a ‘symbol’ devised for the purpose of facilitating exchange (Politeia II, 371; Jowett translated σύµβоλоν by ‘money-token’). Now such an occasional saying means very little and does not justify the attribution to Plato of any definite view on the nature of money. But it must be observed that his canons of monetary policy—his hostility to the use of gold and silver, for instance, or his idea of a domestic currency that would be useless abroad— actually do agree with the logical consequences of a theory according to which the value of money is on principle independent of the stuff it is made of. In view of this fact it seems to me that we are within our rights if we claim Plato as the first known sponsor of one of the two fundamental theories of money, just as Aristotle may be claimed as the first known sponsor of the other (sec. 5b below). It is highly unlikely, of course, that these theories originated with them, but it is certain that they taught them and that they attached exactly the same meaning to them as did the authors who again took them up from the late Middle Ages on. We may assume this with confidence because those authors display both Platonic and Aristotelian influences clearly enough. In fact, filiation can be strictly proved. The dialogue Eryxias, which was not written by Plato but has been transmitted to us among his writings and contains nothing that clashes with any of his known opinions, is mentioned here because it is the only extant piece of work that is wholly devoted to an economic subject and indeed treats it for its own sake. Otherwise, the contents of the Graeco-roman economics 53 dialogue—substantially an inquiry into the nature of wealth, which is related to wants and carefully distinguished from money—do not present any great interest. [3. ARISTOTLE’S ANALYTIC PERFORMANCE] Aristotle’s performance is quite different. It is not only that in his works Platonic glamour is conspicuous by its absence, and that instead we find (if such a thing may be said without offense of so great a figure) decorous, pedestrian, slightly mediocre, and more than slightly pompous common sense. Nor is it only that Aristotle much more than Plato—in any case, much more frankly than Plato—co-ordinated and discussed pre- existing opinions that prevailed in what must have been a copious literature. The essential difference is that an analytic intention, which may be said (in a sense) to have been absent from Plato’s mind, was the prime mover of Aristotle’s. This is clear from the logical structure of his arguments. It becomes still clearer when we observe his method of work: for instance, his political concepts and doctrines were drawn from an extensive collection he laboriously made of constitutions of Greek states. Of course, he also looked for the Best State, 1 which was to realize the Good Life, the Summum Bonum, and Justice. He also overflowed with value judgments for which he claimed absolute validity (as do we). He also gave normative form to his results (as do we). And finally he also went hortatory on Virtue and Vice (as we do not). 2 But, however important all this may have been to him and, for more than 2000 years, to all his readers, it does not concern us at all; as I have said already and shall use every opportunity to repeat again and again, all this affects the goals and motives of analysis but it does not affect its nature. 3 1 It is interesting to note that he, too, philosophized primarily about the Greek city-state which, in spite of the exploits of his illustrious tutee, was and remained for him the only form of life worthy of serious attention. That Alexander’s stupendous experiment in political construction completely failed to stir his imagination and to set his mind working on the vast vistas opened up by that experiment is highly characteristic of the man. 2 He therefore refused assent to the pleasure-and-pain doctrines about behavior that were gaining ground in the Greece of his day. But though he did not give a utilitarian definition of happiness, he placed the concept of happiness in the center of his social philosophy. Whoever does this has taken the decisive step and has committed the original sin: whether he then emphasizes virtue and vice or pleasure and pain is secondary—the way is smooth from the one to the other. 3 If any doubt were possible concerning Aristotle’s analytic intention, it would be removed by his programmatic statement: ‘As in other departments of science, so in politics, the [given] compound [of phenomena] should always be resolved into the simple elements or least parts of the whole’ (Politics I, 1). To be sure, the term ‘re- solving’ is but a literal equivalent to ‘analyzing’ and actually identifies only a particular type of the activity we mean to indicate by analysis. It is, however, the spirit of the passage that counts and not its particular wording. The passage as a whole clearly expresses the fact that Aristotle consciously applied an analytic method. History of economic analysis 54 But only a small part of his analytic performance is concerned with economic problems. His main work as well as his main interest, so far as social phenomena are concerned, was in the field we have decided to call economic sociology or rather it was in the field of political sociology to which he subordinated both economic sociology and technical economics. It is as a treatise or textbook on state and society that his Politics must be appraised. And his Nicomachean Ethics—a comprehensive treatise on human behavior presented from the normative angle—also deals so preponderantly with political man, with man in the city-state, that it should be considered as a companion volume to the Politics, making up together with the latter the first known systematic presentation of a unitary Social Science. The reader presumably knows that up to, say, the times of Hobbes, all that went under the name of political science and political philosophy fed upon the Aristotelian stock. For our purpose, it must suffice to note: (1) that not only was Aristotle, like a good analyst, very careful about his concepts but that he also co- ordinated his concepts into a conceptual apparatus, that is, into a system of tools of analysis that were related to one another and were meant to be used together, a priceless boon to later ages; (2) that, as is indeed implied in his ‘inductive’ approach alluded to above, he investigated processes of change as well as states; (3) that he tried to distinguish between features of social organisms or of behavior that exist by virtue of universal or inherent necessity ( ) and others that are instituted by legislative decision or custom (νóµω); (4) that he discussed social institutions in terms of purposes and of the advantages and disadvantages they seemed to him to present, and that he himself thus gave in, and led followers to give in, to a particular form of the rationalist error, namely, the teleological error. 4 Deferring consideration of his concept of Natural Law, we confine ourselves to three characteristic samples of his analysis. 4 Teleology, or the attempt to explain institutions and forms of behavior causally by the social need or purpose they are supposed to serve, is obviously not always erroneous: many things in society can be, of course, not only understood in terms of their purpose but also causally explained by it. In all sciences that deal with purposive human actions, teleology must always play some role. But it must be handled with care; and there is the ever-present danger of making improper use of it. Mostly, this improper use consists in exaggerating the extent to which men act, and shape the institutions under which they live, according to clearly perceived ends that they consciously wish to realize in the most rational way. This is why the teleological error may be called a particular instance of the wider category of rationalist errors. It is interesting to note, however, that Aristotle was quite free from the teleological error in matters outside of his social science. In Physicae auscultationes (II, 8) he recognized, for instance, that our teeth are adapted to chewing food, not because they were made for this purpose but, as he thought, because individuals who are by accident endowed with serviceable teeth have a better chance of surviving than those who have not. What a curious piece of Darwinism! Graeco-roman economics 55 [4. ON THE ORIGIN OF THE STATE, PRIVATE PROPERTY, AND SLAVERY] Contrary to a widespread impression, Aristotle did not accept Plato’s idea that the state developed from the patriarchal family or gens. Neither did he fully accept the idea of a Social Contract which seems to have been current among Sophists, but it always hovered around his path. Occasionally, he even talked about an original covenant so that the idea came easily to any disciple of his. This is interesting for two reasons. First, in the seventeenth and eighteenth centuries the social contract became the centerpiece of a line of thought whose exponents would have greatly resented being called Aristotelians. Second, Aristotle’s handling of this subject is characteristic of his general attitude toward ideas of the Sophists. Much in Aristotle is strongly suggestive of Sophist influences. Yet he consistently argued against them, or rather against the views that we know to have been held by them. Perhaps it is not difficult to explain such an attitude; it is by no means rare. In any case, however, we must not allow it to obliterate the fact that he absorbed some of their thought and that it was mainly through his works that some Sophist influences reached the Middle Ages. In the second Book of the Politics, Aristotle discussed private property, communism, and the family, mainly by way of criticizing Plato, Phaleas, and Hippodamus. His criticism of Plato—the only one of the three whose text we can compare with the criticism—is strikingly unfair and, moreover, misconceives completely the nature and meaning of Plato’s creation. But the arguments he adduced for private property and the family and against communism were all the more successful—they read almost exactly like the arguments of middle-class liberals of the nineteenth century. Aristotle lived in a society and breathed the air of a civilization to which slavery was essential. However, he also lived in a time when this essential institution was under fire from social critics. In other words, slavery had become a problem. This problem Aristotle attempted to solve by positing a principle that was to serve both as an explanation and as a justification. It stated what he thought was an indubitable fact, the ‘natural’ inequality of men: by virtue of inborn quality, some men are predestined for subjection, others for rule. He saw the difficulty of identifying this proposition with the quite different one that the former class of men actually furnishes the slaves of real life, and that the latter class of men actually furnishes the masters of real life. But he eliminated this difficulty by admitting ‘unnatural’ and ‘unjust’ cases of slavery such as would arise from indiscriminate enslavement of (Hellenic) prisoners of war. Most of us will see in this theory a peerless example of ideological bias coupled with apologetic intention (as we know, the two do not necessarily coincide). All the more important is it to make quite clear precisely what it is that justifies this impression. Our dislike of the proposition that slavery is due to a congenital inferiority—of some sort—in the enslaved would certainly not justify it. Nor is it sufficient that Aristotle’s theory involves several non sequiturs. This would establish faultiness of analysis but not ideological bias. At the same time, if the mistakes committed in an argument all point in the same direction and if this direction agrees with what we may conceive the analyst’s ideology to be, we are probably within History of economic analysis 56 our rights in suspecting ideological bias. Even so, it is not the suspicion of bias but the proof of the mistakes that should motivate rejection. [5. ARISTOTLE’S ‘PURE’ ECONOMICS] Keeping these principles of interpretation in mind, we now turn to Aristotle’s embryonic ‘pure’ economics, the elements of which are to be found. mainly in Politics, I, 8–11, and in Ethics, V, 5. Nothing would be easier than to show that he was primarily concerned with the ‘natural’ and the ‘just’ as seen from the standpoint of his ideal of the good and virtuous life, and that the economic facts and relations between economic facts which he considered and evaluated appear in the light of the ideological preconceptions to be expected in a man who lived in, and wrote for, a cultivated leisure class, which held work and business pursuits in contempt and, of course, loved the farmer who fed it and hated the money lender who exploited it. These things are just as interesting but not more so than are the corresponding though different value judgments and ideologies of the modern intellectual. The points that really matter for us are these. Aristotle based his economic analysis squarely upon wants and their satisfactions. Starting from the economy of self-sufficient households, he then introduced division of labor, barter, and, as a means of overcoming the difficulties of direct barter, money—the error of confusing wealth with money duly coming in for stricture. There is no theory of ‘distribution.’ This—presumably the extract from a large literature that has been lost—constitutes the Greek bequest, so far as economic theory is concerned. We shall follow its fortunes right to A.Smith’s Wealth of Nations, the first five chapters of which are but developments of the same line of reasoning. Let us therefore look at the bequest more closely. (a) Value. Aristotle not only distinguished value in use and value in exchange as clearly as did any later writer but he also perceived that the latter phenomenon derives somehow from the former. But in itself this is not only common sense but also commonplace, and further than this he did not advance. His failure to do so was made good by the later scholastics, who are entitled to the credit for having developed the theory of price which he himself cannot be said to have had. It has been held that this was due to his preoccupation with the ethical problem of justice in pricing—‘commutative’ justice—which diverted his interest from the analytic problem of actual pricing. Nothing could be farther from the truth. Preoccupation with the ethics of pricing, as the example of the later scholastics suffices to show, is precisely one of the strongest motives a man can possibly have for analyzing actual market mechanisms. Several passages show, as a matter of fact, that Aristotle tried to do so and failed. 1 He considered, however, the case of Monopoly (Politics, 1 The most characteristic of these passages occurs in Ethics, V (1133), which I interpret like this: ‘As the farmer’s labor compares with the shoemaker’s labor, so Graeco-roman economics 57 I, 11 and Ethics, V, 5), which he defined as it has been defined ever since, namely, as the position in a market of a Single Seller (µóνoς, alone or standing alone; to sell). 2 He condemned it as ‘unjust.’ These facts seem to yield the solution of a problem that has exercised some historians of the theory of value. Aristotle no doubt sought for a canon of justice in pricing, and he found it in the ‘equivalence’ of what a man gives and receives. Since both parties to an act of barter or sale must necessarily gain by it in the sense that they must prefer their economic situations after the act to the economic situations in which they found themselves before the act—or else they would not have any motive to perform it—there can be no equivalence between the ‘subjective’ or utility values of the goods exchanged or between the good and the money paid or received for it. And since Aristotle did not offer any theory of exchange value or price, those historians concluded that he must have had in mind some mysterious Objective or Absolute Value of things that is intrinsically inherent in them and independent of circumstances or human valuations or actions—a metaphysical entity most welcome to people with philosophical propensities and most distasteful to people of a more ‘positive’ type of mind. But surely this does not follow. Failure to explain exchange value is not failure to recognize it as a fact. And it is much more reasonable to assume that Aristotle simply thought of the exchange values of the market, as expressed in terms of money, rather than of some mysterious value substance measured by those exchange values. But does not this imply that he accepted the actual commodity prices as the standard of his commutative justice and thereby lost the means of pronouncing upon their justice or injustice? Not at all. We have seen that he condemned monopoly prices. It is not farfetched to equate, for Aristotle’s purpose, monopoly prices with prices that some individual or group of individuals have set to their own advantage. Prices that are given to the individual and with which he cannot tamper, that is to say, the competitive prices that emerge in free market under normal conditions, do not come within the ban. And there is nothing strange in the conjecture that Aristotle may have taken normal competitive prices as standards of commutative justice or, more precisely, that he was prepared to accept as ‘just’ any transaction between individuals that was carried out at such prices—which is in fact what the scholastic doctors were to do explicitly. If this interpretation be correct, his concept of the just value of a commodity is indeed ‘objective,’ but only in the sense that no individual can alter it by his own action. Moreover, his just values were social values—expressive, as he almost certainly thought, of the community’s evaluation of every commodity 3 —but only in the sense that they were the super-individual result of the product of the farmer compares with the product of the shoemaker.’ At least, I cannot get any other sense out of this passage. If I am right, then Aristotle was groping for some labor-cost theory of price which he was unable to state explicitly. 2 Joan Robinson added the corresponding concept, Monopsony, the position in the market of a Single Buyer ( to buy). 3 This idea kept on turning up throughout the ages. We also find it in J.B.Clark (see below, Part IV). But though it seems to have had a strong appeal for some minds, History of economic analysis 58 the actions of a mass of reasonable men. In any case, they are nothing more metaphysical or absolute than quantities of commodities multiplied by their normal competitive prices. The reader will have no difficulty in perceiving that, if values are defined in this way, the Aristotelian requirement of commutative justice acquires a sound and perfectly simple meaning. It will be fulfilled by their equality in every act of exchange or sale: if A barters shoes for B’s loaves of bread, Aristotelian justice requires that the shoes equal the loaves when both are multiplied by their normal competitive prices; if A sells the shoes to B for money, the same rule will determine the amount of money he ought to get. Since, under the conditions envisaged, A would actually get this amount, we have before us an instructive instance of the relation which, with Aristotle himself and a host of followers, subsists between the logical and the normal ideal and between the ‘natural’ and the ‘just.’ We have expended such care on this argument because it disposes once for all of metaphysical speculations about objective or absolute value wheresoever and whensoever they might occur. Dismissing for good what we have seen to be a spurious problem, we shall henceforth understand by objective value of a commodity the magnitude defined and nothing else. Similarly, we shall not bother about any possible metaphysical meaning of the concept of Intrinsic Value since it is always possible (and in most cases very easy) to attach to it an entirely unmetaphysical one—as, for instance, in the most important case, where an author speaks of the intrinsic value of a coin. (b) Money. The theory of money that Aristotle sponsored in conscious opposition, so it seems to me, to the alternative one sponsored by Plato was this: the very existence of any non- communist society involves the exchange of goods and services; this exchange, at first, ‘naturally’ takes the form of barter; but the people who want what other people have may not have what the latter want; therefore it will often be necessary to accept in exchange what one does not want in order to get what one does want by means of a further act of barter (indirect exchange); obvious convenience will then induce people to choose, tacitly or through legislative action, one commodity—Aristotle did not consider the possibility that people might choose more than one—as a Medium of Exchange. Aristotle briefly mentioned the fact that some commodities—such as the metals—are better fitted for this role than others, thus foreshadowing some of the tritest passages in nineteenth-century textbooks about homogeneity, divisibility, portability, relative stability of value, 4 and so on. Moreover, the requirements of his rule of equivalence in exchange naturally led him to observe that the Medium of Exchange will also be used as a Measure of Value. And finally he recognized, implicitly at least, its use as a Store of Value. Three of the four functions of money traditionally listed in those nineteenth-century there is very little to it: there is no realistic sense in which it can be averred that any non-socialist society as such evaluates commodities, though it is true of course that social influences shape the subjective valuations of individuals that govern their behavior and thus produce prices and ‘objective values.’ 4 He recognized, however, that the value of gold and silver was not immutable. Graeco-roman economics 59 textbooks—the fourth is to serve as the Standard of Deferred Payments—can therefore be traced to Aristotle. Essentially, this theory embodies two propositions. The first is that, whatever other purposes money may come to serve, its fundamental function, which defines it and accounts for its existence, is to serve as a medium of exchange. Therefore, this theory belongs to what Professor von Mises has described as ‘catallactic’ theories of money ( to exchange). The second proposition is that in order to serve as a medium of exchange in the markets of commodities, money itself must be one of these commodities. That is to say, it must be a thing that is useful and has exchange value independently of its monetary function—this is all that intrinsic value means in this connection—a value that can be compared with other values. Thus the money commodity goes by weight and quality as do other commodities; for convenience people may decide to put a stamp on it ( ) in order to save the trouble of having to weigh it every time, but this stamp only declares and guarantees the quantity and quality of the commodity contained in a coin and is not the cause of its value. This proposition, which, of course, is not either identical with the first or implied by it, will identify what we shall henceforth call Metallism or the Metallist Theory of Money in contrast to the Cartal Theory of which Plato’s is an example. 5 Whatever may be its shortcomings, this theory, though never unchallenged, prevailed substantially to the end of the nineteenth century and even beyond. It is the basis of the bulk of all analytic work in the field of money. Therefore, we have every motive to make sure of our interpretation of Aristotle, whose personal influence in this matter is recognizable at least as late as A.Smith. No passage in the Politics will bear any other interpretation unless we attribute to Aristotle certain views that he mentioned but clearly attributed to others. But in the Ethics, playing upon the Greek word for current coin (νóµισµα), he did state that money exists not by ‘nature’ but by convention or legislation (νόµω), which seems to point in another direction. The fact, however, that he added, by way of explaining his meaning, that money might be changed or demonetized by the community suggests that he meant no more than that convention or legislation decides the material to be used for coining money and on the particular form to be given to the coins. 6 Attention should finally be called to an interesting point of method. Aristotle’s theory of money is a theory in the ordinary sense of this term, that is to say, an attempt to explain what money is and what money does. But, he presented it in a genetic form, as was his habit in dealing with any social institution: he lets money develop in what purports to be a historical sequence that 5 See ch. 6 of this Part. 6 We cannot enter, as we should, into a discussion of other passages. It must suffice to say that, at worst, they weigh but lightly as against the clear implications of Aristotle’s emphasis on the necessity that money should consist of a material that is a commodity in its own right. Either the phrase that money is (Ethics, V, 5, 11) means that money is a means of exchange [used] according to convention or else I do not understand it. History of economic analysis 60 starts from a condition or ‘stage’ in which there was no money. Of course, we need not see more in this than an expository device. In fact, the reader should remember this possible interpretation, which will redeem from sheer absurdity many an argument that presents itself in the garb of purely imaginary ‘history,’ as do, for instance, those theories of the state that use the idea of an original social contract. Even A.Smith’s ‘early and rude state of society’ may benefit from an interpretation that refuses to take it seriously. But the case of money is different because the Aristotelian theory of the logical origin of money may pass muster—at a push—as a verifiable theory of its historical origin. Such instances as the Semite shekel or the tea-money of Mongolian nomads suffice to show this. It is in such cases that our point of method arises. Is it valid procedure to trace as far back as we can the history of an institution in order to discover its essential or its simplest meanings? Clearly not. Primitive forms of existence are as a rule not more simple but more complex than later ones: the chieftain who is judge, priest, administrator, warrior all in one is evidently a more complex phenomenon than are any of his specialized successors of later times; the medieval manor is conceptually a more complex phenomenon than is the U.S. Steel Corporation. Logical and historical origins must, therefore, be kept distinct. But this distinction presents itself only in advanced stages of analysis. The unsophisticated analyst invariably confuses them. 7 This confusion is undoubtedly implied in Aristotle’s theories of money and also of other social institutions. He bequeathed it to the whole line of thinkers that descends from him, the English utilitarians included. And it survived, in spots, until today. (c) Interest. The rest of Aristotle’s ‘pure’ economics, considered from our standpoint, is hardly worth mentioning. Many, if not most, of the things that were to become problems for the economist of later times he took for granted in the spirit of prescientific common sense; and he passed his value judgments upon a reality large stretches of which he failed to explore at all. The chiefly agrarian income of the gentleman of his time evidently presented no problem to him; the free laborer was an anomaly in his slave economy and was disposed of perfunctorily; the artisan, except so far as the just price of his product was concerned, fared little better; the trader (and shipowner), the shopkeeper, the money lender were mainly considered with a view to the ethical and political appraisal of their activities and their gains, 8 neither of which seemed to call 7 It should be observed, however, that identification of historical and logical evolution does not necessarily involve confusion. But if it does not involve confusion then it requires either proof of coincidence in every particular case or acceptance of an evolutionary or ‘emanatistic’ logic, such as Hegel’s. 8 Observe: I am not arguing against Aristotle’s ideal of life or against any particular value judgments of his. Still less am I arguing for glorification of economic activity. On the contrary, I applaud the philosopher for having refused to identify rational behavior with the hunt for wealth. All I want to establish is that Aristotle, who in political matters was so alive to the necessity of analyzing and fact-finding as a preliminary to judging, never seems to have bothered about this preliminary in ‘purely’ economic matters except in the matters touching value, price, and money. For instance, Graeco-roman economics 61 . consciously applied an analytic method. History of economic analysis 54 But only a small part of his analytic performance is concerned with economic problems. His main work as well as. to be, we are probably within History of economic analysis 56 our rights in suspecting ideological bias. Even so, it is not the suspicion of bias but the proof of the mistakes that should motivate. appeal for some minds, History of economic analysis 58 the actions of a mass of reasonable men. In any case, they are nothing more metaphysical or absolute than quantities of commodities multiplied