An Economist’s Reflections on Aristotle’s Politics

My foreword to the Laissez Faire Books / Classical Wisdom ebook edition of Aristotle’s Politics (2015)

Reviewing Aristotle’s Politics on Amazon, a reader opined, “even though Aristotle’s ideas are brilliant, I don’t like the way he expresses himself.” Everybody can have his opinion, but this one is problematic. First, Aristotle’s Politics, as it has been handed to us, is quite certainly not exactly what Aristotle wrote or said. Moreover, one is advised to approach with some humility a classic book that is still influential after 25 centuries. In this spirit, I will try to provide some keys about how Politics fits in today’s knowledge of politics, economics, and liberty.

One can struggle with the philosophical discourse in the 4th century BC. The world is much different today, which renders the usual translation challenge even more difficult. For example, what the translator (famous 19th-century scholar Benjamin Jowett) renders as “the state” is the Greek word πόλις (polis), whose meaning is probably closer to “the city.” It is however, a city whose government wields a lot of power over citizens, which, from this point of view, makes it more similar to today’s states. Others might prefer the term “city-state.” Keeping “polis” is another option. There is no neat solution, except to try to understand what Aristotle wanted to say.

Aristotle (384–322) was a Greek philosopher who needs no introduction. As the New Palgrave Dictionary of Economics says, he was a universal genius who “defined and codified the subject-matter and indeed created much of the language required for scientific and philosophical discourse.”[1] He was born within the confine of the ancient Greek world (in Stagira), lived part of his life in Athens and part in Macedonia, the country that conquered Greece.

In Politics, Aristotle framed concepts that have had long-lasting influence, and asked questions that still excite political thinkers. He devised theories and checked them against observations across many societies of his time. We owe him astute observations about the main political regimes — monarchy, aristocracy, oligarchy, democracy, and tyranny. The thrust of the book, however, is normative: the author is more concerned with what the government should be than in describing what it is and how it works. Yet, he tries to remain realistic: in framing an ideal, he writes, “we may assume what we wish but should avoid impossibilities.” He defends the middle class just as modern politicians do: “Wherefore the city which is composed of middle-class citizens is necessarily best governed.”

He sometimes seems on the verge of discovering the rule of law as classical liberals understand it. “The will of man,” he says, “is a very unsafe rule,” and “even if it is better for certain individuals to govern, they should be made only guardians and ministers of the law.” A good king rules according to law over “voluntary subjects,” in contrast with a tyrant, who rules over involuntary subjects — a standard distinction in Greek political theory. Because it is usually impossible to secure the rule of the best, a mix of oligarchy and democracy with a large middle class, which he calls “constitutional government,” constitutes the best form of government that is attainable.

Yet Aristotle defends a highly stratified society. Citizens rule over slaves, imperfect citizens (such as women), and non-citizens. “Our definition of the virtue of a citizen,” he writes, “will apply to some citizens and freemen only, and not to those who work for a living. The latter class, to whom toil is necessary, are either slaves who minister to the wants of individuals, or mechanics and laborers who are the servants of the community.” “The life of mechanics or tradesmen,” he explains, “is ignoble and inimical to virtue.”

By and large, the citizens should not work with their hands: they should only contemplate, own the land, wage war, and occupy official functions. Their material subsistence is taken care of by the working people. For the citizens, the Aristotelian city represents the ancient version of the welfare state: “No citizen should be in want of subsistence.” In fact, starting from the 5th century, Athenian citizens were not only assisted by the state; they were also paid to deliberate.[2]

Aristotle’s citizens are nowhere free in the way the classical-liberal tradition uses the term. The sort of liberty that Aristotle defends (for part of the population) is what Benjamin Constant calls the “liberty of the ancients” as opposed to the “liberty of the moderns.”[3] Ancient liberty is the collective liberty of the majority of citizens to rule over the minority, as opposed to individual liberty. Aristotle shows clearly which side he is on:

Neither must we suppose that any one of the citizens belongs to himself, for they all belong to the state, and are each of them a part of the state.

He immediately adds “and the care of each part is inseparable from the care of the whole.” Perhaps this ideal of care can be interpreted as an emphasis on the individual, but it can mean as well that collective liberty implies the welfare state.

The concept of democracy is marred by an ambiguity well illustrated by Aristotle. Is it individual liberty or, on the contrary, the liberty of the majority to rule over the minority? Aristotle explains that “the basis of a democratic state is liberty.” (For liberty, he uses the term ἐλευθερία or eleutheria.) He comes close to modern liberty by saying that liberty would mean “to be ruled by none if possible,” but he slips into ancient liberty when he explains that, since it is impossible not to be ruled, “all citizens alike should take their turn of governing and being governed.” It apparently did not cross his mind that liberty could consist in being ruled by no one in all areas of life where political authority is not essential. A typical ancient thinker, Aristotle could not conceive social life without wide and constant state authority.

Aristotle’s confusion about liberty is shown by his use of the same word to describe both his concept of liberty and the situation of northern barbarians who “keep their freedom [eleutheria], but have no political organization, and are incapable of ruling over others.” Many of our contemporaries fall into the same confusion between individual liberty and collective liberty, between liberty and democracy.

Aristotle’s ideal society is highly regulated. All life falls under the purview of the state, and there is no private life but what the state allows: “there ought to be a magistracy which will have an eye to those whose life is not in harmony with the government.” A law should mandate that deformed children be killed. Inheritances should be controlled in the interest of equality. Pregnant women should be required to take a daily walk, but not to exercise their minds too much. Men over 55 should not have children. Citizens should take their meals in common at “public tables.”

Under Aristotle’s ideal state, education is largely an enterprise of indoctrination by the state. “It is manifest,” he writes, “that education should be one and the same for all, and that it should be public, and not private — not as at present, when every one looks after his own children separately, and gives them separate instruction of the sort which he thinks best.” Education “should be an affair of state.” The directors of education “should be careful what tales or stories the children hear … and should take care that they are left as little as possible with slaves.”

The state does not stop at the bedroom door, nor is private speech off limits. The authorities must fight “indecency of speech,” as well as “pictures or tales which are indecent.” As with all laws, these proposals must be enforced:

A freeman who is found saying or doing what is forbidden, if he be too young as yet to sit at the public table, should be disgraced and beaten, and an elder person degraded as his slavish conduct deserves.

What Aristotle has written about economics is to be found in a few pages of Politics (especially in Book I) and a couple of pages in his Nicomachean Ethics — remembering again that we have to rely on texts that scholars think are not too far from the originals. As for the book Oeconomica, which was for a long time attributed to Aristotle, it is now recognized as apocryphal. Aristotle did understand some basic economic facts. He understood that material goods are necessary (but not sufficient) for happiness. He understood the benefits of private property, although he did not want to extend it to anybody other than citizens. He saw that leisure, not work, is the goal of economic life: “As I must repeat once and again, the first principle of all action is leisure.”

It would be anachronistic to fault Aristotle for not understanding economics as we understand it since the 18th century. But we can certainly recognize that he did not bring any significant contribution to its development. He had an embryo of understanding of money, but not much more. For him and his contemporaries, economics (oikononia) was merely household management (the roots of the Greek term) and, by extension, management of public affairs.[4] Joseph Schumpeter, the famous economist, explained that, in Aristotle’s economics efforts, “we find (if such a thing can be said without offense of so great a figure) decorous, pedestrian, slightly mediocre, and more than slightly pompous common sense.”[5] Without a better grasp of economics, it is not surprising Aristotle could not understand some essential features of society and politics.

Aristotle was interested in virtue and objective good, not in subjective preferences, a central concept in economics. At any rate, he would not have wanted to incorporate the preferences of the individuals who should not count in his ideal society — contrary to economists, who do not discriminate among individuals. For Aristotle, some individuals are inferiors “and it is better for them … that they should be under the rule of a master.”

Aristotle did not clearly understand the crucial economic concept of exchange. He was interested in the moral significance of exchange, not its economic consequences. He despised retail traders. He opposed interest on loans, which he thought produces an unnatural increase in money.

Contrary to the natural tendency of contemporary economists (who often makes exceptions, but they are exceptions), Aristotle did not conceive of an efficient spontaneous order. “Where absolute freedom is allowed there is nothing to restrain the evil which is inherent in every man,” he writes. And what he calls “absolute freedom” is not only anarchy: if the state does not constantly control and regulate life, chaos will ensue.

If one does not look at politics with the eyes of an economist, one is bound to miss important phenomena and make many errors. Consider for example the statement that the reader meets very early in Book I:

When several villages are united in a single community, perfect and large enough to be nearly self-sufficing, the state comes into existence, originating in the bare needs of life, and continuing in existence for the sake of a good life.… Hence it is evident that the state is a creation of nature, and that man is by nature a political animal.

The expression “political animal” (πολιτικὸν ζῷον or politicon zoion) has also been translated as “social animal,” which is understandable, because Aristotle did not clearly distinguish between the social and the political, except to claim that the political was the most perfect form of the social and the goal to be reached.

He explains that the state does not exist “for the sake of alliance and security from injustice, nor yet for the sake of exchange and mutual intercourse; for then the Tyrrhenians and the Carthagenians, and all who have commercial treaties with one another, would be citizens of one state.” The role of the state is far more than guaranteeing security and protecting exchange. “A state is not a mere society”; it exists to promote virtue and to fight vice, “for the sake of a perfect and self-sufficing life.” Society exists for “mere companionship,” while the community called the state exists “for the sake of noble actions.”

For Aristotle, the state is not something that governs society; it is society — and a more perfect society. His constant glorification of the state, although less extreme than in the writings of his teacher Plato, is thus not surprising.

How does the desire to rule over others push monarchies toward tyranny, aristocracies toward oligarchy, and democracies toward demagogical government? Aristotle’s explanations are scanty. He makes many good observations — for example how some tyrants were demagogues enough to gain wide support: “Cypselus was a popular man, who during the whole time of his rule never had a bodyguard.” But his analysis does not go very far. For him, a good government is one that governs “with a view of the common interest,” which is to realize the good society. He does not explain how the interaction of citizens, magistrates (officials), and judges could lead to the common interest. He does not understand the internal workings of the state. This is not surprising, for this sort of analysis will have to wait until the development of Public Choice theory in the 20th century, but it puts into light Aristotle’s political romanticism and the limits of his political analysis.

Aristotle is tempted by holism: “The whole is superior to the part,” he writes. Consequently, the state is superior to the citizens. He justifies democracy with a holist fiction, in which the multitude is transmogrified by the good men:

For the many, of whom each individual is but an ordinary person, when they meet together may very likely be better than the few good, if regarded not individually but collectively.… For each individual among the many has a share of virtue and prudence, and when they meet together they become in a manner one man, who has many feet, and hands, and senses.

Aristotle remains prudent with this idea that individuals become better in a group: it would not, he notes, hold among brutes. And “the decrees of the demos correspond to the edicts of the tyrant.” He is not completely oblivious to the danger of government power: “passion perverts the minds of rulers, even when they are the best of men.” He does notice that “instead of looking for the public good, [some states] have used ostracism for factious purposes.” But he still trusts that just governments, who observe the law, would be immune to these dangers, because “the law is reason unaffected by desire.” He hoped that customary law would restrain the majority. Uninformed by economics, moral thinking easily becomes wishful thinking.

Aristotle — and he has not been alone in this — did not see that the pursuit of the good by an all-powerful state leads to the tyranny of the good. We have seen how stratified, regulated, and stifled is a society ruled by Aristotle’s ideal state. It even turns into a Machiavellian state. For example, Aristotle suggests that “the ruler who has a care of the state should invent terrors, and bring distant dangers near, in order that the citizens may be on their guard.”

There may be, as the author of Politics believed, some ultimate good that transcends individual preferences. But the knowledge of this good, assuming we can attain it, is not very useful for organizing society as long as there is no near-unanimous consent on what it is and how to achieve it. The practical challenge is to find a way for people to live together in a peaceful and prosperous society. Contrary to what Aristotle — and so many others — thought, Leviathan is not the solution.

Theory and history suggest that the state is at best an agent charged with assuring the security necessary for the individuals to pursue their own happiness by themselves. It is not prudent to make it the instrument of the good life, and to grant it the enormous powers required by this grandiose mission. On the contrary, the state’s goals and domain must be severely limited. As poet Friedrich Hölderlin wrote, “What has always made the state a hell on earth has been precisely that man has tried to make it his heaven.”[6]

[1] M.I. Finley, “Aristotle,” in The New Palgrave: A Dictionary of Economics, vol. 1 (Macmillan, 1987), 112–13.
[2] M.L.W. Laistner, Greek Economics (J.M. Dent & Sons, 1923), xxi–xxii.
[3] See Benjamin Constant, The Liberty of the Ancients Compared With That of the Moderns (1819) (Laissez Faire Books, 2015).
[4] See M.I. Finley, “Aristotle and Economic Analysis,” Past & Present 47 (May 1970): 3–25.
[5] Joseph Schumpeter, History of Economic Analysis (Oxford University Press, 1954), 57.
[6] Quoted by Friedrich Hayek, The Road to Serfdom (1944) (University of Chicago Press and Routledge, 2007), 76.

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