Chapter 2
Ancient Times
The earliest surviving expressions of thought on economic subjects have come down to us from the Oriental theocracies. The general spirit of the corresponding type of social life consisted in taking imitation for the fundamental principle of education, and consolidating nascent civilisation by heredity of the different functions and professions, or even by a system of castes, hierarchically subordinated to each other according to the nature of their respective offices, under the common supreme direction of the sacerdotal caste. This last was charged with the traditional stock of conceptions, and their application for purposes of discipline. It sought to realise a complete regulation of human life in all its departments on the basis of this transmitted body of practical ideas. Conservation is the principal task of this social order, and its most remarkable quality is stability, which tends to degenerate into stagnation. But there can be no doubt that the useful arts were long, though slowly, progressive under this regime, from which they were inherited by the later civilisations -- the system of classes or castes maintaining the degree of division of labour which had been reached in those early periods. The leading members of the corporations which presided over the theocracies without doubt gave much earnest thought to the conduct of industry, which, unlike war, did not imperil their political pre-eminence by developing a rival class. But, conceiving life as a whole, and making its regulation their primary aim, they naturally considered most the social reactions which industry is fitted to exercise. The moral side of economics is the one they habitually contemplate, or (what is not the same) the economic side of morals. They abound in those warnings against greed and the haste to be rich which religion and philosophy have in all ages seen to be necessary. They insist on honesty in mutual dealings, on just weights and measures, on the faithful observance of contracts. They admonish against the pride and arrogance apt to be generated by riches, against undue prodigality and self-indulgence, and enforce the duties of justice and beneficence towards servants and inferiors. Whilst, in accordance with the theological spirit, the personal acquisition of wealth is in general thesis represented as determined by divine wills, its dependence on individual diligence and thrift is emphatically taught. There is indeed in the fully developed theocratic systems a tendency to carry precept, which there differs little from command, to an excessive degree of minuteness -- to prescribe in detail the time, the mode, and the accompaniments of almost every act of every member of the community. This system of exaggerated surveillance is connected with the union, or rather confusion, of the spiritual and temporal powers, whence it results that many parts of the government of society are conducted by direct injunction or restraint, which at a later stage are intrusted to general intellectual and moral influences.
The practical economic enterprises of Greek and Roman antiquity could not, even independently of any special adverse influences, have competed in magnitude of scale or variety of resource with those of modern times. The unadvanced condition of physical science prevented a large application of the less obvious natural powers to production, or the extensive use of machinery, which has acquired such an immense development as a factor in modern industry. The imperfection of geographical knowledge and of the means of communication and transport were impediments to the growth of foreign commerce. These obstacles arose necessarily out of the mere immaturity of the industrial life of the periods in question. But more deeply rooted impediments to a vigorous and expansive economic practical system existed in the characteristic principles of the civilisation of antiquity. Some writers have attempted to set aside the distinction between the ancient and modern worlds as imaginary or unimportant, and, whilst admitting the broad separation between ourselves and the theocratic peoples of the East, to represent the Greeks and Romans as standing on a substantially similar ground of thought, feeling, and action with the Western populations of our own time. But this is a serious error, arising from the same too exclusive pre-occupation with the cultivated classes and with the mere speculative intellect which has often led to an undue disparagement of the Middle Ages. There is this essential difference between the spirit and life of ancient and of modern communities, that the former were organised for war, the latter during their whole history have increasingly tended to be organised for industry, as their practical end and aim. The profound influence of these differing conditions on every form of human activity must never be overlooked or forgotten. With the military constitution of ancient societies the institution of slavery was essentially connected. Far from being an excrescence on the contemporary system of life, as it was in the modern West Indies or the United States of America, it was so entirely in harmony with that life that the most eminent thinkers regarded it as no less indispensable than inevitable. It does, indeed, seem to have been a temporary necessity, and on the whole, regard being had to what might have taken its place, a relative good. But it was attended with manifold evils. It led to the prevalence amongst the citizen class of a contempt for industrial occupations; every form of production, with a partial exception in favour of agriculture, was branded as unworthy of a free man -- the only noble forms of activity being those directly connected with public life, whether military or administrative. Labour was degraded by the relegation of most departments of it to the servile class, above whom the free artisans were but little elevated in general esteem. The producers being thus for the most part destitute of intellectual cultivation and excluded from any share in civic ideas, interests, or efforts, were unfitted in character as well as by position for the habits of skilful combination and vigorous initiation which the progress of industry demands. To this must be added that the comparative insecurity of life and property arising out of military habits, and the consequent risks which attended accumulation, were grave obstructions to the formation of large capitals, and to the establishment of an effective system of credit. These causes conspired with the undeveloped state of knowledge and of social relations in giving to the economic life of the ancients the limitation and monotony which contrast so strongly with the inexhaustible resource, the ceaseless expansion, and the thousandfold variety of the same activities in the modern world. It is, of course, absurd to expect incompatible qualities in any social system; each system must be estimated according to the work it has to do. Now the historical vocation of the ancient civilisation was to be accomplished, not through industry, but through war, which was in the end to create a condition of things admitting of its own elimination and of the foundation of a regime based on pacific activity.
THE GREEKS
This office was, however, reserved for Rome, as the final result of her system of conquest; the military activity of Greece, though continuous, was incoherent and sterile, except in the defence against Persia, and did not issue in the accomplishment of any such social mission. It was, doubtless, the inadequacy of the warrior life, under these conditions, to absorb the faculties of the race, that threw the energies of its most eminent members into the channel of intellectual activity, and produced a singularly rapid evolution of the aesthetic, philosophic, and scientific germs transmitted by the theocratic societies.
In the Works and Days of Hesiod, we find an order of thinking in the economic sphere very similar to that of the theocracies. With a recognition of the divine disposing power, and traditional rules of sacerdotal origin, is combined practical sagacity embodied in precept or proverbial saying. But the development of abstract thought, beginning from the time of Thales, soon gives to Greek culture its characteristic form, and marks a new epoch in the intellectual history of mankind.
The movement was now begun, destined to mould the whole future of humanity, which, gradually sapping the old hereditary structure of theological convictions, tended to the substitution of rational theories in every department of speculation. The eminent Greek thinkers, while taking a deep interest in the rise of positive science, and most of them studying the only science -- that of geometry -- then assuming its definitive character, were led by the social exigencies which always powerfully affect great minds to study with special care the nature of man and the conditions of his existence in society. These studies were indeed essentially premature; a long development of the inorganic and vital sciences was necessary before sociology or morals could attain their normal constitution. But by their prosecution amongst the Greeks a noble intellectual activity was kept alive, and many of those partial lights obtained for which mankind cannot afford to wait. Economic inquiries, along with others, tended towards rationality; Plutus was dethroned, and terrestrial substituted for supernatural agencies. But such inquiries, resting on no sufficiently large basis of practical life, could not attain any considerable results. The military constitution of society, and the existence of slavery, which was related to it, leading, as we have seen, to a low estimate of productive industry, turned away the habitual attention of thinkers from that domain. On the other hand, the absorption of citizens in the life of the state, and their pre-occupation with party struggles, brought questions relating to politics, properly so called, into special prominence. The principal writers on social subjects are therefore almost exclusively occupied with the examination and comparison of political constitutions, and with the search after the education best adapted to train the citizen for public functions. And we find, accordingly, in them no systematic or adequate handling of economic questions only some happy ideas and striking partial anticipations of later research.
In their thinking on such questions, as on all sociological subjects, the following general features are observable.
1. The individual is conceived as subordinated to the state, through which alone his nature can be developed and completed, and to the maintenance and service of which all his efforts must be directed. The great aim of all political thought is the formation of good citizens; every social question is studied primarily from the ethical and educational point of view. The citizen is not regarded as a producer, but only as a possessor, of material wealth; and this wealth is not esteemed for its own sake or for the enjoyments it procures, but for the higher moral and public aims to which it may be made subservient.
2. The state, therefore, claims and exercises a controlling and regulating authority over every sphere of social life, including the economic, in order to bring individual action into harmony with the good of the whole.
3. With these fundamental notions is combined a tendency to attribute to institutions and to legislation an unlimited efficacy, as if society had no spontaneous tendencies, but would obey any external impulse, if impressed upon it with sufficient force and continuity.
Every eminent social speculator had his ideal state, which approximated to or diverged from the actual or possible, according to the degree in which a sense of reality and a positive habit of thinking characterised the author.
The most celebrated of these ideal systems is that of Plato. In it the idea of the subordination of the individual to the state appears in its most extreme form. Within that class of the citizens of his republic who represent the highest type of life, community of property and of wives is established, as the most effective means of suppressing the sense of private interest, and consecrating the individual entirely to the public service. It cannot perhaps be truly said that his scheme was incapable of realisation in an ancient community favourably situated for the purpose. But it would soon be broken to pieces by the forces which would be developed in an industrial society. It has, however, been the fruitful parent of modern Utopias, specially attractive as it is to minds in which the literary instinct is stronger than the scientific judgment, in consequence of the freshness and brilliancy of Plato's exposition and the unrivalled charm of his style. Mixed with what we should call the chimerical ideas of his work, there are many striking and elevated moral conceptions, and, what is more to our present purpose, some just economic analyses. In particular, he gives a correct account of the division and combination of employments, as they naturally arise in society. The foundation of the social organization he traces, perhaps, too exclusively to economic grounds, not giving sufficient weight to the disinterested social impulses in men which tend to draw and bind them together. But he explains clearly how the different wants and capacities of individuals demand and give rise to mutual services, and how, by the restriction of each to the sort of occupation to which, by his position, abilities, and training, he is best adapted, everything needful for the whole is more easily and better produced or effected. In the spirit of all the ancient legislators he desires a self-sufficing state, protected from unnecessary contacts with foreign populations, which might tend to break down its internal organisation or to deteriorate the national character. Hence he discountenances foreign trade, and with this view removes his ideal city to some distance from the sea. The limits of its territory are rigidly fixed, and the population is restricted by the prohibition of early marriages, by the exposure of infants, and by the maintenance of a determinate number of individual lots of land in the hands of the citizens who cultivate the soil. These precautions are inspired more by political and moral motives than by the %Malthusian fear of failure of subsistence. Plato aims, as far as possible, at equality of property amongst the families of the community which are engaged in the immediate prosecution of industry. This last class, as distinguished from the governing and military classes, he holds, according to the spirit of his age, in but little esteem; he regards their habitual occupations as tending to the degradation of the mind and the enfeeblement of the body, and rendering those who follow them unfit for the higher duties of men and citizens. The lowest forms of labour he would commit to foreigners and slaves. Again, in the spirit of ancient theory, he wishes (Legg., v. 12) to banish the precious metals, as far as practicable, from use in internal commerce, and forbids the lending of money on interest, leaving indeed to the free will of the debtor even the repayment of the capital of the loan. All economic dealings he subjects to active control on the part of the Government, not merely to prevent violence and fraud, but to check the growth of luxurious habits, and secure to the population of the state a due supply of the necessaries and comforts of life.
Contrasted with the exaggerated idealism of Plato is the somewhat limited but eminently practical genius of Xenophon. In him the man of action predominates, but he has also a large element of the speculative tendency and talent of the Greek. His treatise entitled Oeconomicus is well worth reading for the interesting and animated picture it presents of some aspects of contemporary life, and is justly praised by Sismondi for the spirit of mild philanthropy and tender piety which breathes through it. But it scarcely passes beyond the bounds of domestic economy, though within that limit its author exhibits much sound sense and sagacity. His precepts for the judicious conduct of private property do not concern us here, nor his wise suggestions for the government of the family and its dependents. Yet it is in this narrower sphere and in general in the concrete domain that his chief excellence lies; to economics in their wider aspects he does not contribute much. He shares the ordinary preference of his fellow-countrymen for agriculture over other employments, and is, indeed, enthusiastic in his praises of it as promoting patriotic and religious feeling and a respect for property, as furnishing the best preparation for military life, and as leaving sufficient time and thought disposable to admit of considerable intellectual and political activity. Yet his practical sense leads him to attribute greater importance than most other Greek writers to manufactures, and still more to trade, to enter more largely on questions relating to their conditions and development, and to bespeak for them the countenance and protection of the state. Though his views on the nature of money are vague, and in some respects erroneous, he sees that its export in exchange for commodities will not impoverish the community. He also insists on the necessity, with a view to a flourishing commerce with other countries, of peace, of a courteous and respectful treatment of foreign traders, and of a prompt and equitable decision of their legal suits. The institution of slavery he of course recognises and does not disapprove; he even recommends, for the increase of the Attic revenues, the hiring out of slaves by the state for labour in the mines, after branding them to prevent their escape, the number of slaves being constantly increased by fresh purchases out of the gains of the enterprise. (De Vect., 3, 4.)
Almost the whole system of Greek ideas up to the time of Aristotle is represented in his encyclopaedic construction. Mathematical and astronomical science was largely developed at a later stage, but in the field of social studies no higher point was ever attained by the Greeks than is reached in the writings of this great thinker Both his gifts and his situation eminently favoured him in the treatment of these subjects. He combined in rare measure a capacity for keen observation with generalising power, and sobriety of judgment with ardour for the public good. All that was original or significant in the political life of Hellas had run its course before his time or under his own eyes, and he had thus a large basis of varied experience on which to ground his conclusions. Standing outside the actual movement of contemporary public life, he occupied the position of thoughtful spectator and impartial judge. He could not, indeed, for reasons already stated, any more than other Greek speculators, attain a fully normal attitude in these researches. Nor could he pass beyond the sphere of what is now called statical sociology; the idea of laws of the historical development of social phenomena he scarcely apprehended, except in some small degree in relation to the succession of political forms. But there is to be found in his writings a remarkable body of sound and valuable thoughts on the constitution and working of the social organism The special notices of economic subjects are neither so numerous nor so detailed as we should desire. Like all the Greek thinkers, he recognises but one doctrine of the state, under which ethics, politics proper, and economics take their place as departments, bearing to each other a very close relation, and having indeed their lines of demarcation from each other not very distinctly marked. When wealth comes under consideration, it is studied not as an end in itself, but with a view to the higher elements and ultimate aims of the collective life.
The origin of society he traces, not to economic necessities, but to natural social impulses in the human constitution. The nature of the social union, when thus established, being determined by the partly spontaneous partly systematic combination of diverse activities, he respects the independence of the latter whilst seeking to effect their convergence. He therefore opposes himself to the suppression of personal freedom and initiative, and the excessive subordination of the individual to the state, and rejects the community of property and wives proposed by Plato for his governing class. The principle of private property he regards as deeply rooted in man, and the evils which are alleged to result from the corresponding social ordinance he thinks ought really to be attributed either to the imperfections of our nature or to the vices of other public institutions. Community of goods must, in his view, tend to neglect of the common interest and to the disturbance of social harmony.
Of the several classes which provide for the different wants of the society, those who are occupied directly with its material needs -- the immediate cultivators of the soil, the mechanics and artificers -- are excluded from any share in the government of the state, as being without the necessary leisure and cultivation, and apt to be debased by the nature of their occupations. In a celebrated passage he propounds a theory of slavery, in which it is based on the universality of the relation between command and obedience, and on the natural division by which the ruling is marked off from the subject race. He regards the slave as having no independent will, but as an "animated tool" in the hands of his master; and in his subjection to such control, if only it be intelligent, Aristotle holds that the true well-being of the inferior as well as of the superior is to be found. This view, so shocking to our modern sentiment, is of course not personal to Aristotle; it is simply the theoretic presentation of the facts of Greek life, in which the existence of a body of citizens pursuing the higher culture and devoted to the tasks of war and government was founded on the systematic degradation of a wronged and despised class, excluded from all the higher offices of human beings and sacrificed to the maintenance of a special type of society.
The methods of economic acquisition are divided by Aristotle into two, one of which has for its aim the appropriation of natural products and their application to the material uses of the household; under this head come hunting, fishing, cattle-rearing, and agriculture. With this primary and "natural" method is, in some sense, contrasted the other to which Aristotle gives the name of "chrematistic," in which an active exchange of products goes on, and money comes into operation as its medium and regulator. A certain measure of this "non-natural " method, as it may be termed in opposition to the preceding and simpler form of industrial life, is accepted by Aristotle as a necessary extension of the latter, arising out of increased activity of intercourse, and satisfying real wants. But its development on the great scale, founded on the thirst for enjoyment and the unlimited desire of gain, he condemns as unworthy and corrupting. Though his views on this subject appear to be principally based on moral grounds, there are some indications of his having entertained the erroneous opinion held by the physiocrats of the eighteenth century, that agriculture alone (with the kindred arts above joined with it) is truly productive, whilst the other kinds of industry, which either modify the products of nature or distribute them by way of exchange, however convenient and useful they may be, make no addition to the wealth of the community.
He rightly regards money as altogether different from wealth, illustrating the difference by the story of Midas. And he seems to have seen that money, though its use rests on a social convention, must be composed of a material possessing an independent value of its own. That his views on capital were indistinct appears from his famous argument against interest on loans, which is based on the idea that money is barren and cannot produce money.
Like the other Greek social philosophers, Aristotle recommends to the care of Governments the preservation of a due proportion between the extent of the civic territory and its population, and relies on ante-nuptial continence, late marriages, and the prevention or destruction of births for the due limitation of the number of citizens, the insufficiency of the latter being dangerous to the independence and its superabundance to the tranquillity and good order of the state.
THE ROMANS
Notwithstanding the eminently practical, realistic, and utilitarian character of the Romans, there was no energetic exercise of their powers in the economic field; they developed no large and many-sided system of production and exchange. Their historic mission was military and political, and the national energies were mainly devoted to the public service at home and in the field. To agriculture, indeed, much attention was given from the earliest times, and on it was founded the existence of the hardy population which won the first steps in the march to universal dominion. But in the course of their history the cultivation of the soil by a native yeomanry gave place to the introduction, in great numbers, of slave labourers acquired by their foreign conquests; and for the small properties of the earlier period were substituted the vast estates -- the latifundia -- which, in the judgment of Pliny, were the ruin of Italy.(1) The industrial arts and commerce (the latter, at least when not conducted on a great scale) they regarded as ignoble pursuits, unworthy of free citizens; and this feeling of contempt was not merely a prejudice of narrow or uninstructed minds, but was shared by Cicero and others among the most liberal spirits of the nation.(2) As might be expected from the want of speculative originality among the Romans, there is little evidence of serious theoretic inquiry on economic subjects. Their ideas on these as on other social questions were for the most part borrowed from the Greek thinkers. Such traces of economic thought as do occur are to be found in (1) the philosophers, (2) the writers de re rustica, and (3) the jurists. It must, however, be admitted that many of the passages in these authors referred to by those who assert the claim of the Romans to a more prominent place in the history of the science often contain only obvious truths or vague generalities.
In the philosophers, whom Cicero, Seneca, and the elder Pliny sufficiently represent (the last indeed being rather a learned encyclopaedist or polyhistor than a philosopher), we find a general consciousness of the decay of industry, the relaxation of morals, and the growing spirit of self-indulgence amongst their contemporaries, who are represented as deeply tainted with the imported vices of the conquered nations. This sentiment, both in these writers and in the poetry and miscellaneous literature of their times, is accompanied by a half-factitious enthusiasm for agriculture and an exaggerated estimate of country life and of early Roman habits, which are principally, no doubt, to be regarded as a form of protest against existing abuses, and, from this point of view, remind us of the declamations of Rousseau in a not dissimilar age. But there is little of larger or just thinking on the prevalent economic evils and their proper remedies. Pliny, still further in the spirit of Rousseau, is of opinion that the introduction of gold as a medium of exchange was a thing to be deplored, and that the age of barter was preferable to that of money. He expresses views on the necessity of preventing the efflux of money similar to those of the modern mercantile school -- views which Cicero also, though not so clearly, appears to have entertained. Cato, Varro, and Columella concern themselves more with the technical precepts of husbandry than with the general conditions of industrial success and social well-being. But the two last named have the great merit of having seen and proclaimed the superior value of free to slave labour, and Columella is convinced that to the use of the latter the decline of the agricultural economy of the Romans was in a great measure to be attributed. These three writers agree in the belief that it was chiefly by the revival and reform of agriculture that the threatening inroads of moral corruption could be stayed, the old Roman virtues fostered, and the foundations of the commonwealth strengthened. Their attitude is thus similar to that of the French physiocrats invoking the improvement and zealous pursuit of agriculture alike against the material evils and the social degeneracy of their time. The question of the comparative merits of the large and small systems of cultivation appears to have been much discussed in the old Roman, as in the modern European world; Columella is a decided advocate of the petite culture. The jurists were led by the coincidence which sometimes takes place between their point of view and that of economic science to make certain classifications and establish some more or less refined distinctions which the modern economists have either adopted from them or used independently. They appear also (though this has been disputed, Neri and Carli maintaining the affirmative, Pagnini the negative) to have had correct notions of the nature of money as having a value of its own, determined by economic conditions, and incapable of being impressed upon it by convention or arbitrarily altered by public authority. But in general we find in these writers, as might be expected, not so much the results of independent thought as documents illustrating the facts of Roman economic life, and the historical policy of the nation with respect to economic subjects. From the latter point of view they are of much interest; and by the information they supply as to the Course of legislation relating to property generally, to sumptuary control, to the restrictions imposed on spendthrifts, to slavery, to the encouragement of population, and the like, they give us much clearer insight than we should otherwise possess into influences long potent in the history of Rome and of the Western world at large. But, as it is with the more limited field of systematic thought on political economy that we are here occupied, we cannot enter into these subjects. One matter, however, ought to be adverted to, because it was not only repeatedly dealt with by legislation, but is treated more or less fully by all Roman writers of note, namely, the interest on money loans. The rate was fixed by the laws of the Twelve Tables; but lending on interest was afterwards (B.C. 341) entirely prohibited by the Genucian Law, In the legislation of Justinian, rates were sanctioned varying from four to eight per cent according to the nature of the case, the latter being fixed as the ordinary mercantile rate, whilst compound interest was forbidden. The Roman theorists, almost without exception, disapprove of lending on interest altogether. Cato, as Cicero tells us, thought it as bad as murder ("Quid fenerari? Quid hominem occidere?" De Off, ii. 25); and Cicero, Seneca, Pliny, Columella all join in condemning it. It is not difficult to see how in early states of society the trade of money-lending becomes, and not unjustly, the object of popular odium; but that these writers, at a period when commercial enterprise had made considerable progress, should continue to reprobate it argues very imperfect or confused ideas on the nature and functions of capital. It is probable that practice took little heed either of these speculative ideas or of legislation on the subject, which experience shows can always be easily evaded. The traffic in money seems to have gone on all through Roman history, and the rate to have fluctuated according to the condition of the market.
Looking back on the history of ancient economic speculation, we see that, as might be anticipated a priori, the results attained in that field by the Greek and Roman writers were very scanty. As Dühring has well remarked, the questions with which the science has to do were regarded by the ancient thinkers rather from their political than their properly economic side. This we have already pointed out with respect to their treatment of the subject of population, and the same may be seen in the case of the doctrine of the division of labour, with which Plato and Aristotle are in some degree occupied. They regard that principle as a basis of social classification, or use it in showing that society is founded on a spontaneous co-operation of diverse activities. From the strictly economic point of view, there are three important propositions which can be enunciated respecting that division: -- (1) that its extension within any branch of production makes the products cheaper; (2) that it is limited by the extent of the market; and (3) that it can be carried further in manufactures than in agriculture. But we shall look in vain for these propositions in the ancient writers; the first alone might be inferred from their discussions of the subject. It has been the tendency especially of German scholars to magnify unduly the extent and value of the contributions of antiquity to economic knowledge. The Greek and Roman authors ought certainly not to be omitted in any account of the evolution of this branch of study. But it must be kept steadily in view that we find in them only first hints or rudiments of general economic truths, and that the science is essentially a modern one. We shall indeed see hereafter that it could not have attained its definitive constitution before our own time.(3)
NOTES:
1. "Locis, quae nunc, vix seminario exiguo militum relicto, servitia Romana ab solitudine vindicant." -- Liv. vi. 12. "Villarum infinita spatia." Tac. Ann. iii. 53.
2. "Opifices omnes in sordida arte versantur; nec enim quidquam ingenuum habere potest officina." Cic. de Off. i. 42. "Mercatura, si tenuis est, sordida putanda est: sin magna et copiosa, multa undique apportans multisque sine vanitate impertiens, non est admodum vituperanda." -- Ibid. "Quaestus omnis Patribus indecorus visus est." Liv. xxi. 63
3. On the Economic doctrines of the Ancients see Roscher's Essay Ueber das Verhältniss der National÷konomie zum klassischen Alterthume in his Ansichten der Volkswirthschaft (1861).