Louisiana State University LSU Digital Commons LSU Historical Dissertations and Theses Graduate School 1983 Platonic Economic Theory: the Economics of Moderation. Kenneth Neal Townsend Louisiana State University and Agricultural & Mechanical College Follow this and additional works at: https://digitalcommons.lsu.edu/gradschool_disstheses Recommended Citation Townsend, Kenneth Neal, "Platonic Economic Theory: the Economics of Moderation." (1983). LSU Historical Dissertations and Theses. 3942. https://digitalcommons.lsu.edu/gradschool_disstheses/3942 This Dissertation is brought to you for free and open access by the Graduate School at LSU Digital Commons. It has been accepted for inclusion in LSU Historical Dissertations and Theses by an authorized administrator of LSU Digital Commons. For more information, please contact [email protected]. INFORMATION TO USERS This reproduction was made from a copy of a document sent to us for microfilming. 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Zeeb Road Ann Arbor, Ml 48106 8409598 Townsend, Kenneth Neal PLATONIC ECONOMIC THEORY: THE ECONOMICS OF MODERATION The Louisiana State University and Agricultural and Mechanical Ph.D. Col. 1983 University Microfilms International300 N. Zeeb Road, Ann Arbor, Ml 48106 Copyright 1983 by Townsend, Kenneth Neal All Rights Reserved PLATONIC ECONOMIC THEORY: THE ECONOMICS OF MODERATION A Dissertation Submitted to the Graduate Faculty of the Louisiana State University and Agricultural and Mechanical College in partial fulfillment of the requirements for the degree of Doctor of Philosophy in The Department of Economics by Kenneth N. Townsend B.A., Louisiana State University, 1976 M.S., Louisiana State University, 1978 December 1983 This material is copyrighted. No portion of this dissertation may be reproduced without written permission of the author. © 1983 ii DEDICATION To my parents, who instructed me in the meaning of virtue. To my wife and children, whose love inspires me to examine the meaning of the Good. TABLE OF CONTENTS Page DEDICATION ............................... ii ABSTRACT............... •................................... vi INTRODUCTION ............................................... 1 Chapter 1. A SURVEY OF THE LITERATURE ON PLATONIC ECONOMICS .... 13 I. A Survey of the General Histories of Thought . 15 II. A Survey of the Journal Literature on Platonic E c o n o m i c s ..................................... 30 III. A Survey of the Major Treatises on Greek Economic Thought ............................. 41 2. THE EPISTEMOLOGICAL AND METHODOLOGICAL DIFFERENCES BETWEEN CONTEMPORARY AND PLATONIC ECONOMICS .......... 62 I. Plato's Epistemology and Scientific Method .... 68 II. The Epistemologies of Contemporary Economics . 90 III. Rhapsody, Sophistry, and Modern Relativism .... 94 IV. Historicism................................... 104 V. Positivism..................................... 112 VI. Nominalism..................................... 118 3. PLATONIC ECONOMIC THEORY: THE VIRTUE OF MODERATION......................................... 132 I. A Review of Welfare Theory..................... 133 II. Plato's Welfare Theory ......................... 145 III. Plato's Analysis of the G o o d .................... 148 IV. The Life of Virtue and Well-Ordered S o u l ......... 159 V. The Psychological Division of Labor ............. 182 VI. The Moderate Economy............................ 187 4. PLATO'S NOTION OF THE SUFFICIENT ECONOMY .............. 212 I. Sufficiency................................... 213 II. The Sufficient Sta t e ............................ 221 5. PLATO’S THEORIES OF USURY AND THE JUST P R I C E .......... 234 I. Medieval Just Price T h e o r y ........................ 235 II. Plato's Contributions to the Theories of Usury and the Just P r i c e ........................ 243 iv TABLE OF CONTENTS (Continued) Page 6. SUMMARY AND CONCLUSIONS................................. 257 BIBLIOGRAPHY ............................................... 263 VITA ....................................................... 272 v ABSTRACT This dissertation analyzes the contributions to the economic analysis of welfare made by the ancient Greek philosopher Plato. Heretofore unexamined, these contributions demonstrate the importance of the development of notions of sufficiency and moderation as integral parts of welfare analysis. This dissertation also examines the significance of Plato's method of inquiry into matters of social science for contemporary economic analysis. In particular, the importance of metamathematical induction for the acquisition of knowledge of the values upon which welfare depend is analyzed in the form that it is employed in Plato's dialogues. This analysis is conducted to the end that economists might push beyond the aporetic conclusions of contemporary welfare analysis. Finally, this dissertation explores the possibility that medieval theories of usury and the just price are rooted in the philosophy of Plato. It is widely conjectured that the theories of the Schoolmen derive from the Aristotelian and Roman theories of usury and the just price. This dissertation suggests that the theories of Aristotle, in turn, follow the same principles as Plato's analysis of just value. vi INTRODUCTION PLATONIC ECONOMIC THEORY: THE ECONOMICS OF MODERATION Man has always been confronted with the fundamental economic problem of scarcity of resources relative to human wants and desires. One might assume, therefore, that economics, the social science that is concerned with the study of how scarce resources are allocated to satisfy human wants, ranks among man's older scientific endeavors. Oddly, many economists would argue that man has approached the problem of scarcity in a scientific manner for but a brief time. Specifically, economic science is perceived by many economists as beginning with the work of Adam Smith. Moreover, the important scientific developments in economics are thought to have occurred during the last one hundred years, since the rise of marginalism. To be sure, economics as a science has evolved during the last few centuries, paralleling a growth of science in general. Indeed, an argument could be made that it was not until the eighteenth century, with the work of Adam Smith, that the analysis of economic issues formally became a legitimate intellectual pursuit— worthy of attention from minds that formerly concentrated on questions of a more traditionally philosophical nature. The effect of the growth of modern science on economics can be seen in the 2 development of a positive economic theory of the supply and demand of scarce resources. This theory has served to unify economics. There exists a consistency of thought among economists, with respect to positive theory, that seems more characteristic of the physical, rather than social sciences. Unfortunately, the modern economist's preoccupation with developing and refining a positive theory of economics has precluded his appreciating the developments of ancient political economy. Even within the context of economic history and the history# of economic thought, there has been insufficient attention paid to ancient scientific analysis of economic problems. Although much has been written speculating about the extent to which ancient man understood economic phenomena, ancient economic treatises have, in large part, been looked upon as pre-scientific antecedents of modern economics. Nowhere is the economist's inattentiveness to ancient political economy more evident than with respect to the writings of Plato, the fourth century, B.C., Athenian philosopher. Whereas modest attempts have been made to evaluate the contributions to economics made by the ancient