Yes, let’s take it offline but a few quick points: I agree entirely on the Socratic and Aristotelian critiques of what would later be called ‘exchange value’ – and the distinction that it leads to between oikonomia and mere “money-making” (chremastike), say, in the Politics. The ancient view of oikonomia is very interesting – and gets picked up, of course, by fans of Aristotle and critics of the market economy in later centuries (e.g. Marx).

I am not sure, however, that it’s nominalism that’s responsible for the rise of the modern economy in the way you suggest, at least not without a bit of amendment. You say: “I think the logic behind the new conception of the state draws along with it consequences in all other domains, so that the modern notion of “the economy” is a delayed effect.” I think that may be right, but it is as a reaction to not a continuation of the possibility of the modern state, even if both run along similarly nominalist lines. That is, the modern state and modern economy may be in some significant tension, even if the quarrel is a family quarrel among moderns. Perhaps I’m more interested in the substance of that quarrel than you are – because I see interesting political possibilities there – even if both sides in that debate reflect the deeper problem that you wish to diagnose.

So in response to your comment: “Perhaps you will provide us convincing evidence to the contrary, but I think it will have to show that the modern notions of the market economy do not depend on the nominalist understanding of the individual,” I want to agree with you that perhaps they do, but to suggest that along many important dimensions we should nevertheless distinguish the understanding that conceived the subject of the new political orders of the seventeenth century from that which conceived the subject of the new economic order of the eighteenth. I accept that Aristotle is nowhere to be found on either side of that argument, but that doesn’t mean that we shouldn’t distinguish these two episodes of modern thought and the distinct subjectivities they helped to engender.

Again, many thanks for your interesting post – more on all this offline.

Sincerely yours,
David Grewal

I appreciate the arcana myself, though we may want to take that part of the discussion offline. I’ll just comment on a couple of the broader principles at issue here.

Nominalism is in fact the deeper point I want to raise (and I do that more explicitly in the essay in the Berry collection). I would contend that nominalism is central to the logic behind both the notion of the state as it appears in Hobbes and the science of economics that develops in his wake. Nominalism supports the disintegration of substantive intermediate institutions that stand between the state and individual subjects (because, for example, it cannot recognize the household as a natural entity with a normative force).

I wonder whether we do not have different notions of the relationship between philosophy and intellectual history. I think the logic behind the new conception of the state draws along with it consequences in all other domains, so that the modern notion of “the economy” is a delayed effect. Perhaps you will provide us convincing evidence to the contrary, but I think it will have to show that the modern notions of the market economy do not depend on the nominalist understanding of the individual that pervades European (and especially British and French) thinking, all the more intensely after Hobbes. I for one would appreciate any clarification you have to offer on these questions.

As for the question of the ancients, ultimately this involves us in a distinct realm of hermeneutical problems. In Xenophon, for example, it seems to me that Socrates is trying to argue for an understanding of oikonomia like that of Aristotle. Ischomachus thinks that anything that makes him richer rightly belongs to oikonomia; he thus represents precisely the position Aristotle is concerned to demystify. Socrates challenges him with the same question Aristotle raises: What really constitutes wealth? Ischomachus thinks of wealth in terms of money, so that naturally his usage of “oikonomia” will creep beyond a necessary grounding in the good of the household.

The two points are fundamentally related. The shift from an agrarian and guild-based economic system to a system fundamentally oriented around money and profit supports and is supported by a nominalistic vision of reality.

This requires, of course, imagining the social structure in question as roughly comparable to the oikos (household), and therefore supposing that the management strategies for non-household structures can be the same (as Socrates’s interlocutor Ischomachus does in Xenophon’s Oeconomicus) or else specifying how the management of a polis necessarily differs from that of an oikos (as Aristotle does in the Politics). As for the use of the term to describe management of states (oikonomia politike), see the Pseudo-Aristotelian Oeconomica (1345b) where, oikonomia politike describes strategies for public financing; note also that Strabo uses oikonomia to describe the management of Roman Egypt and the administration of the Persian empire in his Geography, XVII.I.13; XVII.I.24.

It is in this sense that I think Hobbes is exactly following a (perhaps non-Aristotelian) but completely conventional antique usage.

As for nominalism – well, we can’t pin that on Hobbes alone if that’s the deeper point you want to raise!

All this makes me want to argue that the real innovation here is an eighteenth not a seventeenth-century modification. The reason this matters, as you’ve probably surmised, is that I want to exempt modern notions of the ‘state’ from the same logic that produced modern notions of the ‘market.’ So, the more we can disambiguate what happened between c. 1650 and c. 1750, the better!

Again, forgive the arcana –

Sincerely yours,
David Grewal

* Carlo Natali, “Oikonomia in Hellenistic Political Thought,” in: Justice and Generosity: Studies in Hellenistic Social and Political Philosophy, pp 95-128.

Thanks for adding some refinement to a story I’ve oversimplified. Allow me to refine the refinement a bit further.

First, in Xenophon, oikonomia means only estate management, and this is the basic and enduring meaning in antiquity.

In Aristotle’s Politics, it emphatically refers to household management in Book one, in explicit contrast both to other kinds of ruling and to acquisition of wealth and profit per se. In Book three, he extends it analogously to a particular kind of kingship that enters into all aspects of ruling its kingdom, but he is quite careful to point out that this is an analogy with household management. Then at the end of Book three he applies this analogous use more broadly to a not-well-specified form of aristocratic rule as well. Thus, in accord with his general philosophy of language, the word has a primary reference that grounds its meaning, but can also be used analogously of what resembles or derives from this primary reference.

I do not find support in either author for your broad claim that oikonomia means “management of some enterprise” except in cases where the enterprise in question bears a significant analogy to the household.

As you note, in Epicurean and Stoic sources the word is not used with the same caution for maintaining the distinctiveness of its primary referent. This is because Epicurean and Stoic metaphysics do not respect the integrity of distinct substantial forms of beings in the same way, and so do not require the same care in tethering linguistic reference to an order based on substantial forms. The distinct natures of distinct beings does not carry the same metaphysical weight in these philosophies that it does for Aristotle (or Plato).

Aristotelian philosophy becomes a central element of mainstream medieval thought, especially in the thinkers I mentioned who treat of oikonomia explicitly. Hobbesian philosophy, on the other hand, draws more on Epicurean physics filtered through Galileo, and Stoic epistemology filtered through Descartes, and rejects Aristotelian realism in favor of nominalism. Thus Hobbes’ philosophy of language allows him to play more loosely with words and their referents, and does not require him to keep the word “economy” tethered to the notion of properly ordering the household. Hobbes can use it to refer to the revenue-management of the state without being concerned about whether this usage bears any relation to household management.

Your helpful observation about the concept of “the market” is, I think, consistent with my observation that in Hobbes we are not yet talking about the transactions of civil society but about the revenues of the state (and so still about management, and to that extent he is consistent with classical usage).

Given that, as I see it, the pervasive nominalism that the Scottish and french-economistic thinkers share with Hobbes removes the impediments that would prevent an Aristotelian from altering the primary referent of the term “economics”, and that Hobbes does so first among the moderns, it seems to me permissable to recognize his conceptual and linguistic shifts as continuous with theirs. The question of how radical he is in the transformation of “economic” thought depends ultimately on the question of what the real roots of the conceptual transformations involved are.

I think locating the decisive change with Hobbes in 1650 is just about a century too early. Hobbes’s use of the term is straightforwardly ancient – in keeping, I think, with the various treatises on Oeconomics from the ancient world (whether Aristotle/Theophrastus’s, or Xenophon’s, or the fragments we have of Stoic and Epicurean treatments of the subject). It conceives an oikonomia at the level of the polis. But that was old hat in antiquity. Oikonomia is about managing the affairs of some enterprise, and it’s possible to think of the state on that model in antiquity or – as Hobbes did – in early modernity.

The decisive shift comes a century later, when a new concept appeared – “the market” – in which households were subsumed but precisely not (as on Aristotle’s account) into a political community or polis. This idea of the market is missing from the ancient world – there were markets a plenty – but not imagined as cohering into an abstract allocative mechanism that sat above households and communities but outside the control of politics (that is, the state). It is this conceptual move that allows modern “economics” to begin, and we can place the change in the term rather precisely. It comes sometime between Frances Hutcheson’s use of “oeconomica politica” which is the standard antique usage and Adam Smith’s use of it in the “Wealth of Nations.” The innovator here is not Hobbes – however innovative he was, he did not have a separate conception of the market outside politics, except as a problem to be handled. Who gives us this idea of “economics”? I think it’s a combination of David Hume (Smith’s teacher) and some of the most important of the French “oeconomistes” who begin to conceive the market economy as a self-sufficient, self-equilibrating sphere apart from politics.

There are a couple of good sources here in case anyone’s interested – on the “ancient economy,” see Moses Finley’s still classic contribution “The Ancient Economy,” and on Aristotle, check out Scott Meikle’s “Aristotle’s Economic Thought.” Both of them expressly deal with the change in the term “oikonomia” and discuss how it functioned differently in antiquity.

And, of course, if you want a vision of an embedded – not disembedded – economics, which would be based on an ancient model, but adapted to the conditions of modernity, check out Karl Polanyi’s famous work (especially “The Great Transformation,” which is a critique of economic liberalism along just these lines.)

Great line! I think I’ll steal it.

This is an almost universal trend.

Its current Best Demonstration is the “No Child Left Behind” Act. This law, designed to standardize educational progress so as not to let the disadvantaged fall further behind essentially guts the pedagogical process and in particular, any kind of Socratic exchange and as a result, No child shall indeed be Left Behind because No child shall Go Forward. With this trajectory, an incurious public could almost be led into some kind of Organized Russian Roulette if there was a Regulation that said it must be made so.

Interesting, but because there seems to be no unifying moral basis in the culture, we Regulate to approximate the moral imperative but with the built in reductionism and relativity of Regulation, it can have no moral force and so the civic body is reduced to worshipping the Regulation alone. This is not a call for the integration of religion into government or erosions of the First Amendment, it is simply a recognition of the fits and starts with which we impede our way through accreting Regulation without a constant assessment….through an employment of the Socratic Method….. of the efficacy of the moral basis for the regulation and whether or not said Regulation is continuing to be relevant or even consistent with the original moral intent.

Funny how things given to our cookbook of Teleology 2400 years ago….not to mention 2009 years ago remain stunningly relevant and when we think we can create a better Telos through Regulation, these essential building blocks of the urge are the first to go…..creating a civic edifice that would shock an OSHA Administrator properly attuned.

What is known (more or less) is not what is useful, but what is loved. Love alone makes anything useful. We buy a CD because we love the music. We work 80 hours because we (think) we love the money. When the only love present is self-love, then the assumptions of methodological individualism hold. But when self-love rules, whether in the person, the family, the firm, or the nation, we generally call that person, family, firm, or nation, “dysfunctional.” Hence, we have an economics and politics of dysfunction, a perfect dystopia.

“Prominent Thinkers are paid to stop thinking and start producing propaganda”…beautiful.

You know, the “Natural ” vs. ” Unnatural” classifications are so much more descriptive than conventionally accepted classifications and they have the chief virtue of avoiding the partisan propagandizing of “liberal” and ‘Conservative”.

We’ve seen through zoning law that the regulations may actually work at times but generally, they create even greater disfunction and “unnatural” outcome. One wonders exactly why the Economists…or zoners… might not discern this ancient fact…aside from the fact that anything ancient must mean it’s of no relevancy… particularly whence not underwritten by the Great Think Tank .

“Practical Wisdom”…….how refreshing.

“Though the logos is common, the many live as if they have their own personal wisdom.”

“Rational utility maximization” is a bogus teleology, because the utility of anything depends upon a presupposed understanding of the ends of human living. Just like Hobbes, such “economists” presuppose that what counts as “good” is merely what people happen to prefer for whatever reason (or lack of reason). Teleology in the proper sense proceeds on the hypothesis that we can meaningfully distinguish true goods from false, better lives from worse, and thus sketch out a vision of the more important human ends that the political order ought to respect. So while Hobbes and the “economists” may provide a fairly accurate description of what most people do on a very abstract level, it is a description whose abstract and non-committal character derives from the methodological character I’ve described above.

For Aristotle, the practical disciplines of knowledge require developing the virtue of practical wisdom, which does not deal in such reductive abstractions but rather in the concrete particularities of practical life, the qualitative differences between objects of choice and preference and their implications for the whole character of one’s life.