LECTURE 1. AT THE ORIGINS OF ECONOMIC THOUGHT

1. Economic thought of ancient Greece and ancient Rome

Why do we start the study of the course "History of Economic Doctrines" with an examination of the views of the thinkers of Ancient Greece? Did humanity really have no idea about the economy before them? Apparently, this is not the case, given that the economy is as old as human society. But since economic thought is not initially separated from other forms of thinking about society, it is impossible to accurately determine its first manifestations. If you wish, you can prove that the first economic work is the Bible. This is a matter of the author's preferences and an argument here would be meaningless.

So, why does our course begin with the economic thought of Ancient Greece? First, we pay tribute to the people who gave science its name. "Economics" - a word of ancient Greek origin, literally means "housekeeping". For the first time it is found in the Greek thinker Xenophon, being the title of an essay in which reasonable rules for housekeeping and agriculture are considered. By the way, this word (the science of household) has retained this meaning for centuries. But not only this determines our attention to the economic views of this era.

Economic thought is not just the sum of observations and information about economic life. It presupposes a certain generalization, abstraction, that is, a definite economic analysis. The ancient Greek thinker Aristotle (384-322 BC) was the first to analyze economic phenomena and tried to identify the patterns of development of society. Therefore, he can rightfully be called the first economist in the history of science.

We will dwell on the views of Aristotle in more detail, because:

▪ firstly, his economic views were developed in the economic thought of the Middle Ages; we can say that, to a certain extent, it all rests on the so-called dogmas of Aristotle.

▪ and secondly, and more importantly for us, Aristotle was the first to pose a problem that has become central to economists for many centuries and is still the subject of debate.

At first glance, the question is simple: "What determines the proportions of the exchange of goods?" Or, in other words, what makes products comparable? It was the answer to this question that divided economists into two of the largest currents in the history of economic thought: supporters of the labor theory of value, and supporters of various versions of the theory, the essence of which is that value is a subjective category and is derived from people's assessment of the utility of a product. Aristotle himself had several points of view on solving this problem. In his writings, one can find the beginnings of the labor theory of value, and references to the fact that the proportions of the exchange of goods are based on their utility, and the assertion that money, which is a common need for all, makes comparable goods. But let's not look for an exhaustive answer to this question from Aristotle. His contribution to the history of economic thought is already in the fact that he clearly formulated the problem. And to clearly formulate the problem is half to solve it.

Aristotle is also interesting in his analysis of capital, which in the ancient world existed in commercial and monetary form. For his analysis, he even introduces a new term "chrematistics". Under chrematistics, Aristotle understood activity aimed at making profit, at the accumulation of wealth, in contrast to the economy - as an activity aimed at acquiring goods for the home and the state. At the same time, Aristotle considered the first form of economic organization to be unnatural, and his particular indignation was caused by interest, which he regarded as the most unnatural form of income, because, in his opinion, money is intended only for exchange and cannot give birth to new money. According to the views of Aristotle, interest is a "profit" at the expense of the debtor, which the usurer appropriated and thereby enriched himself, and this appropriation is an expression of his vicious greed and stinginess. The usurer appropriated the interest unfairly, since he did not create it, but forced him to give it to himself, making money a source of acquiring new money, embarking on the path of a radical perversion of its nature.

Analyzing the nature of money, Aristotle insisted that money is the result of an agreement between people and “it is in our power to make it unusable.” But here, too, his position is ambivalent. Distinguishing between economics and chrematistics, Aristotle emphasizes that if money refers to “economics”, then it is a sign of value determined by law or custom, and if it refers to “chrematistics,” then it acts as a real representative of untrue wealth. Moreover, it is with the invention of money that the economy is destroyed, turning it into chrematism, into the art of making money. And in the art of making a fortune, “...there is never a limit to achieving the goal, since the goal here is unlimited wealth and the possession of money... Everyone involved in money turnover strives to increase their capital to infinity.” Therefore, the wealth that chrematistics strives for is limitless. Aristotle states with regret that chrematistics inevitably grows out of economics. In modern terms, this recognition means that capitalist relations inevitably grow out of simple commodity production.

Among other things, Aristotle worried about the problem of establishing justice in exchange. Exchange, according to Aristotle, is a special form of equalizing justice, where the principle of equality, equivalence is manifested. But equality is impossible without commensurability. However, it is difficult to assume that heterogeneous objects are commensurable, that is, qualitatively equal. From this, Aristotle concludes that equalization can be something alien to the true nature of things, an artificial device. And their comparison by means of money becomes such an artificial device. Being the son of his time, Aristotle could not accept the idea of ​​the equality of labor of socially unequal people (slaves and citizens) and therefore took the position of the futility of searching for the commensurability of goods by labor, its duration. On the other hand, and here again the duality of Aristotle's position is manifested, in the composition of production costs, he attached the greatest importance to labor. Ultimately, Aristotle comes to the conclusion that an exchange on the principles of justice means an exchange "on merit." He argues that knowing the true dignity of the exchanging persons, it is possible to establish the proportions of the exchange. And he gives the following example: if 100 pairs of shoes = 1 house, and the value of the builder is twice that of the shoemaker, then the builder is related to the shoemaker as 200 pairs of shoes are to one house. And it is precisely this ratio of exchange that should be considered fair. As we can see, in the ancient world, economic and ethical problems were not yet considered separately.

But the ethical orientation of economic life is rather characteristic of ancient Greek thinkers, while for ancient Roman thinkers who study economic problems, practical issues related to the rational organization of a large-scale slave-owning economy come to the fore.

The representative of this direction of economic thought was Mark Cato (234-149 BC). This author not only developed criteria for choosing land for organizing the economy (good climate, a rich city nearby and convenient means of communication), but also gave detailed recommendations for determining the structure of land, which can be considered as a scale of profitability of agricultural sectors.

Cato also gave recommendations on the organization of forced labor. As a practicing economist, Cato tried to establish the optimal proportions of the elements of production of specialized slave farms, while assigning a huge role to the owner of the estate. In his opinion, it is the "master's eye" that is the most important factor in the organization of labor on the estate.

Also of interest are the views of Yu. Columella (1st century BC), who was the first in the history of ancient thought to pose the problem of the intensive path of development of the slave economy, while considering the reorganization of slave labor to be a necessary condition for the intensification of the economy. Columella recommended using all methods of turning slaves into hard workers: from prison in the basement to exchanging jokes with slaves and discussing new jobs together. The latter proposals can be seen as the beginnings of a “theory of human relations” that became widespread in the second half of the twentieth century.

As you can see, in ancient Rome, the range of economic issues under consideration was reduced to the issues of ensuring the efficiency of economic management and the rational combination of production factors. By the way, in the last third of the nineteenth century, it was these questions that became central to economic theory and now represent an essential part of the modern course "Microeconomics".

The return to the philosophical, ethical aspects of economic issues is associated with the economic views of the representatives of the Middle Ages.

2. Economic thought of the Middle Ages

As already mentioned, the economic thought of the Middle Ages relied heavily on the works of Aristotle, in particular on the provisions that were called “Aristotle’s dogmas.” This influence is also visible in the economic views of the greatest thinker of the Middle Ages, F. Aquinas (1225-1274).

Let me remind you that Aristotle approved of the type of management, which was reduced to the acquisition of goods for the home and the state. This natural (according to Aristotle) ​​economic activity, which, since the time of Xenophon, received the name "economy", included exchange within the limits necessary to satisfy reasonable personal needs. At the same time, activities aimed at enrichment, i.e., the activities of commercial and usurious capital, Aristotle characterized as unnatural, calling it "chrematistics".

Following Aristotle, F. Aquinas develops the idea of ​​the naturalness of natural economy and, in connection with this, divides wealth into natural (products of natural economy) and artificial (gold and silver). The latter, according to F. Aquinas, does not make a person happy and the acquisition of such wealth cannot be a goal, since the latter should consist of “moral improvement.” This conviction stems from the ideology of Christianity, where economic interests must be subordinated to the true cause of life - the salvation of the soul. In medieval theory there is no place for economic activity that is not connected with a moral purpose. And therefore, at every step there are restrictions, prohibitions, warnings not to allow economic interests to interfere in serious matters.

In accordance with the dogmas of Aristotle and the traditions of the Catholic Church, F. Aquinas condemned usury, calling it "a shameful craft." He wrote that when lending money at interest, lenders, in an effort to present a fair deal, demand interest as payment for the time they provide to the borrower. However, time is a common good given by God to everyone equally. Thus, the usurer deceives not only his neighbor, but also God, for whose gift he demands a reward. Among medieval philosophers, there was a common belief that usurers were unworthy of an honest name and superfluous for society, since they did not provide it with the items necessary for life. However, with regard to trade, medieval scholastics, including Fakvinsky, believed that it was a legitimate occupation, since the difference in the natural wealth of different countries indicates that it was provided for by Providence. Trading profits in themselves do not contribute anything vicious to economic life and can be used for an honest purpose. In addition, profit can be a payment for labor if there was a sale of a thing "changed for the better." But at the same time, trade is a dangerous business (in terms of temptation) and a person must be sure that he is engaged in it for the benefit of all and that the profit he derives does not exceed the fair wage for his labor.

F. Aquinas is also interested in his view of private property and the problem of justice. As is known, in early Christianity the idea of ​​equality was embodied in the idea of ​​renunciation of private property, the socialization of property, and in the affirmation of the universal obligation to work. In accordance with the long traditions of Christianity, work was positively assessed by F. Aquinas as necessary for life, getting rid of idleness, and strengthening morality. At the same time, following Aristotle, F. Aquinas rejects the idea of ​​the equivalence of all types of labor, considering physical labor as a slave occupation. Significant difficulties arise with the problem of justifying private property. Departing from the ideas of early Christianity, the thinkers of the Middle Ages argue that private property is necessary, at least in this imperfect world. When good belongs to individuals, people work more and argue less. Therefore, it is necessary to tolerate the existence of private property as a concession to human weakness, but at the same time, in itself, it is by no means desirable. The prevailing view, at least in the field of normative ethics, was that possessions, even at their best, were a burden. At the same time, it should be obtained legally, belong to as many people as possible and give funds to help the poor. They should be shared as much as possible. Its holders must be ready to share with those who are in need, even if their need does not reach poverty. The philosophical substantiation of these provisions are: the idea of ​​a just God and the idea of ​​a limited amount of material wealth. The latter is rooted in paganism, to the ideas prevailing during the collapse of tribal life that an overly successful farmer or hunter is a sorcerer and a thief. If someone got the best harvest, it means that he stole it from a neighbor and this harvest is a "harvest of spirits." Here we see the idea of ​​a closed universe with a constant, unchanging sum of goods. Hence the desire to share equally, so that everyone will have everything they need and no one will have a surplus. It should be noted that this is not only the area of ​​normative ethics: charity in the Middle Ages was huge, but as wasteful as it was ineffectual.

The rejection of excessive wealth connects the medieval scholastics not only with Aristotle, but also with Plato. For the latter, the goal of the ideal state is “to expel the ignoble passion for profit,” since it is surplus that gives rise to such disgusting qualities as laziness and greed. And it was from the ancient Greek thinkers that the belief that it was impossible to become very rich while remaining virtuous entered into medieval scholasticism. According to Plato, any surplus product should be considered as a disruption of social order, as theft. In this case, it is not the amount of social welfare that decreases first, but the amount of public virtue. The phrase will seem strange if you do not take into account that the thinkers of Ancient Greece were primarily concerned with issues of ethics, and not economic efficiency. As K. Marx argued, among the “ancients” you will not find discussions about which form of ownership is most effective. They are interested in the question of what form of ownership produces the best citizens for society.

However, despite the generally negative attitude towards private property, trade, and even more so towards interest, they existed in real economic life and it was impossible to ignore this. And the question arises - what are the criteria of justice in these conditions, including a fair exchange and a fair price?

Even Aristotle, in contrast to those who demanded the establishment of property equality for the community of the free, put forward the thesis that the distribution of goods should be based on the principles of justice, that is, “according to dignity.” This meant, in turn, the fairness of the existence of property inequality. Aristotle's idea was adopted and developed by F. Aquinas. In his view, society was conceived as hierarchical and class-based, where it is sinful to rise above one’s class, for the division into classes was established by God. In turn, belonging to a class determines the level of wealth to which a person should strive. In other words, a person is allowed to strive for such wealth as is necessary to live at a level appropriate to his social position. But the desire for more is no longer enterprise, but greed, which is a mortal sin.

These provisions formed the basis of F. Aquinas's reasoning about a fair price. During the Middle Ages, the discussion about the fair price included two points of view:

▪ first - the fair price is the one that ensures the equivalence of the exchange;

▪ second - the fair price is one that provides people with the well-being befitting their class.

F. Aquinas in his theory of fair price incorporated both of these provisions, distinguishing two types of fairness in exchange. One type of justice guarantees a price “in accordance with the thing,” that is, in accordance with labor and expenses (here equivalence is interpreted in terms of costs). The second type of justice provided more benefits to those who “mean more to public life.” Here, equivalence is interpreted as the appropriation in exchange of that share of goods that corresponds to the dignity of the exchanger. This meant that the pricing process was made dependent on the social status of the participants in the exchange. The defense of the privileges of the ruling classes is found in the works of F. Aquinas and in the justification of the legality of receiving land rent, which he views as a product created by the forces of nature and therefore sown by the land owner. It is the receipt of rent, according to F. Aquinas, that makes it possible for the chosen to engage in spiritual labor “for the sake of the salvation of the rest.”

In conclusion, it seems interesting to trace the evolution of views on the percentage of medieval thinkers - from complete rejection to partial justification. It is known from the history of usury that initially cash or material loans were taken for unproductive use, often out of "hopelessness". This practice dominated until the late Middle Ages. For example, a city dweller borrowed money so as not to starve to death; a knight to go on a crusade; community to build a temple. And it was considered unjust if someone made a profit on the distress or piety of others. At that time, canon law recognized two arguments in favor of charging interest: reimbursement of expenses for the organization and maintenance of credit institutions and compensation for damage due to the inability to dispose of the money lent. But this damage still had to be proven. When, by the sixteenth century, the productive and profitable investment of capital had become widespread, then it was enough for the usurer or banker to prove its commercial or industrial purpose in order to have grounds to demand compensation for the capital occupied. The reason was the loss by the creditor of the opportunity to benefit from those operations that could be presented to him during the absence of money. The deprivation of probable profit required a reward, since the principle of the equivalence of exchange, the main principle for canon law, was violated. In fact, the debtor, thanks to someone else's capital, enriched himself, and the creditor, due to his absence, suffered a loss. Due to changes in economic life, the justified charging of interest became fixed in canon law in the sixteenth century. It was forbidden only to collect the "interest" or excess profits of the usurer, for which an official maximum loan interest was set. Nevertheless, in general, the attitude towards usury still remained negative, which is not surprising, given the initial postulates of Christianity.

The ethical orientation of economic thought permeates the works of all thinkers of the Middle Ages, and the final rupture of economic and ethical problems is associated with the emergence of the first economic schools.

Author: Agapova I. I.

>> Forward: First economic schools (Mercantilism - theory and practice. Physiocrats)

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