AN ARISTOTELIAN CONSTRUCTION OF THE SOCIAL ECONOMY OF LAND By Garrick Richard Small J.P., B.Surv., M.Comm. A Thesis Submitted in Fulfilment of the Requirements for the Degree of Doctor of Philosophy Research and Graduate Programs Faculty of Design, Architecture and Building University of Technology, Sydney July 2000 iii CERTIFICATE I certify that this thesis has not already been submitted for any degree and is not being submitted as part of candidature for any other degree. I also certify that the thesis has been written by me and that any help that I have received in preparing this thesis, and all sources used, have been acknowledged in this thesis ................................... Garrick R. Small iii iv To Bonaventure and Anthony who considered these things long before I did ad majoram Dei gloriam. iv v Acknowledgements I would like to thank my good wife for her support, encouragement and tolerance through this project. She appears to have married a professional student but has adapted to her penance quite well. My thanks also to my supervisor, Jacob Oluwoye, for his guidance and active management of my program. Confidence and humour are most inspiring on what is essentially a very lonely road. I am also indebted to the University of Technology, Sydney for the opportunity to pursue this study. Despite the many criticisms of the current direction of tertiary education, it remains a delightful occupation. Finally I must acknowledge my great debt in this work to two men who helped me through its most challenging stages and to whom it is dedicated. Bonaventure was a good friend of Thomas and has been no less to me. Anthony his brother and the brother to all in great need has taught me about solidarity and how much more I have to learn. A scientist must be disinterested and these men, following their father Francis, would therefore seem to be amongst the best equipped to develop the science of economics. v vi CONTENTS Chapter 1................................................................................................................................ 1.1 Background ..........................................................................................................1 1.2 Statement of the Problem.....................................................................................9 1.3 Formal Object ......................................................................................................13 1.4 Objectives.............................................................................................................14 1.5 Hypotheses...........................................................................................................14 1.6 Scope....................................................................................................................15 1.7 Focus ....................................................................................................................16 1.8 Delimits................................................................................................................17 1.9 Research Framework............................................................................................20 1.9.1 Methodology .........................................................................................21 1.9.2 Literature Survey...................................................................................21 1.9.3 Topic Treatment ....................................................................................21 1.9.4 Empirical Validation .............................................................................22 1.20 Applications, Policy Recommendations ............................................................24 1.21 Definition of Terms............................................................................................25 Chapter 2 Literature Survey........................................................................................................29 2.1 Methodology ........................................................................................................29 2.2 Ethics and Economics .......................................................................................30 2.3 Social Economy ...................................................................................................39 2.4 Property rights......................................................................................................39 2.5 Cost Theory and the Just Price.............................................................................41 2.5.1 Eigen Values .........................................................................................42 2.5.2 Philosophy and Price.............................................................................43 2.5.4 Thomistic Just Price ..............................................................................43 2.5.5 Just Price and Capitalism ......................................................................46 2.5.6 Economics and Value............................................................................46 2.5.7 Marginal Theory of Market Value ........................................................52 2.5.8 Price Theory ..........................................................................................53 2.5.9 Practicalities of Demand Based Pricing................................................57 2.5.10 Demand as Basis for Price ..................................................................58 2.6 Economic Distribution and the Rate of Profit and Price......................................58 2.6.1 The Nature of Supply and Demand.......................................................63 2.7 The concept of Social Economy ..........................................................................65 2.8 The Nature of ownership......................................................................................67 2.9 Land Ownership...................................................................................................68 2.10 Land and Society................................................................................................68 2.10.1 Land Tax .............................................................................................71 2.10.2 Economic Theory and Vested Interests...............................................73 2.11 Land as a Factor of Production ..........................................................................73 2.12 Competition & Self-Interest...............................................................................75 2.13 Wealth Distribution & the Market .....................................................................76 2.14 Money, Debt and Inflation.................................................................................77 2.15 Money Supply....................................................................................................78 2.15.1 Inflation as Tax....................................................................................79 2.16 Debt....................................................................................................................79 2.17 Interest Theory ...................................................................................................81 2.18 Property and Business Cycles............................................................................82 2.18.1 Kondratieff ..........................................................................................82 vi vii 2.18.2 Jevons..................................................................................................84 2.18.3 The (Real) Property Cycle ..................................................................87 2.19 Finance as Behaviour.........................................................................................88 2.20 Literature Gaps...................................................................................................90 2.21 Problems arising from the literature Chapter 3 Methodology ..............................................................................................................92 3.1 The object of economics ......................................................................................93 3.2 Metaphysical foundations. ...................................................................................94 3.2.1 Rationale for selection...........................................................................98 3.2.2 Natures ..................................................................................................104 3.2.3 Aristotelian causality,............................................................................105 3.3 The interrelationship between the Sciences.........................................................106 3.4 Moral Philosophy.................................................................................................109 3.4.1 Sophist Morality....................................................................................110 3.4.2 Aristotelian Morality.............................................................................111 3.4.3 Modern Moral Systems .........................................................................114 3.4.4 Kant's Categorical Imperative...............................................................115 3.4.5 Utilitarianism.........................................................................................117 3.4.6 Twentieth Century Moral Thought .......................................................121