A History of Greek Economic Thought. Albert Augustus Trever
actual conditions and possibilities in Greece and his admittedly more or less utopian ideal.
EXCHANGE
Exchange in Greek economy held a very minor place, compared with its dominant importance in modern theory. It was discussed chiefly in a negative manner, as the object of the moral and aristocratic prejudice of Greek thinkers. We find, however, some appreciation of its true place in the economic life of a state. Plato divides trade, ἀλλαγή or ἀγοραστική, into αὐτοπωλική, which sells its own products, αὐτουργῶν, and μεταβλητική, which exchanges the products of others. He further divides the latter into καπηλική, the exchange within the state, which he calls one-half of all the exchange, and ἐμπορική, foreign commerce.[205] He finds its origin in the division of labor, and in the mutual interdependence of men and states.[206] He understands the necessity of the reciprocal attitude in international, as well as in private, exchange, and thus has a clearer insight than the mercantilists and some modern statesmen. A state must raise a surplus of its own products, so as to supply the other state from which it expects to have its own needs satisfied.[207]
Since a tariff on imports played little part in Greek life, except in so far as it was imposed for sumptuary or war purposes,[208] the perplexing modern problem of the protective tariff scarcely came within the horizon of Greek thinkers. Plato would prohibit the import of certain luxuries, as a moral safeguard. He divides merchandise into primary and secondary products, and would not permit the import of the latter.[209] Elsewhere, however, he legislates against imposts upon either imports or exports, though unconscious of the significance of his suggestion.[210]
He appreciated something of the function of exchange in society. It performed a very important service, as a mediator between producer and consumer.[211] Like money, it served to equalize values, and thus acted as an aid to the satisfaction of needs.[212] When limited to this primary function, it was of advantage to both parties to the exchange,[213] and merchants and retailers had then a real part in the production of values.[214]
The sweeping assertion is too often made that the Greek people were hostile to trade, and therefore that their theorists were especially opposed to it. We have already seen how false this idea is for the Greeks themselves,[215] but it also needs a great deal of qualification in the case of their writers. Their hostility is directed especially against the more petty business of retail trade (καπηλική) rather than against the extensive operations of the merchant (ἔμπορος). But their opposition even to this is not entirely undiscriminating. We have seen that Plato clearly understands the necessity of exchange to the life of the state.[216] He admits that even retail trade is not necessarily evil.[217] The chief reason why it appears so is because it gives free opportunity for the vulgar greed of unlimited gain, which is innate in man.[218] If the noblest citizens, who are governed by rational interests, should become retailers and innkeepers, the business would soon be held in honor.[219]
Plato, however, would limit exchange to its primary function as defined above.[220] Like Ruskin, he believes that, whenever it is pursued merely for private gain, it becomes a source of degeneration to individual and state. It is then akin to the fraudulent or counterfeit pursuits (κιβδήλοις).[221] The retailers in well-ordered states are generally the weakest men, who are unable to undertake other work.[222] The rulers in the Republic must keep themselves entirely free from the trammels of trade, lest they become wolves instead of shepherds,[223] though Plato is grappling here with a very real problem that still faces us—how to prevent graft among public servants.[224] In the Laws, retail trade is entirely prohibited to citizens,[225] and permitted only to metics and strangers,[226] and, indeed, only to those whose corruption will be of least injury to the state.[227] These aliens are not to be permitted to gain overmuch wealth,[228] and they must depart from the state, after twenty years’ residence, with all their belongings.[229] Retail trade, even in their hands, must be strictly limited to the demands of the state,[230] and confined to the market-place for the sake of publicity.[231] All exchange must be honest, dealing with unadulterated products (ἀκίβδηλον).[232] There shall be no dickering over sales, but only one price shall be set upon goods each day. If this is not accepted, the goods must be removed from sale until the following day.[233] If possible, the executors of the laws should try to fix a just schedule of prices, to allow of moderate gain, and should see that this is observed by the retailers.[234] As a climax to all these precautions, Plato would have the rulers take pains to devise means whereby the retailers shall not degenerate into unbridled shamelessness and meanness of soul.[235] Under such limitations, he has faint hopes that retail trade may be freed of its stigma, so as to do least harm to those who pursue it, and to benefit the whole state.[236]
It need not be observed that this attitude of Plato toward trade and commerce is alien to the spirit of economic progress, and that no advanced civilization could be developed on such a basis. His profuse legislation, too, as above outlined, strikes a modern as naïve and visionary.[237] No man, however, is more aware of this than Plato himself. He should be judged, not in a spirit of rigid literalism, but with a sympathetic criticism which tries to understand the psychological reasons for his attitude. His suggestions are not offered as a proposed scheme for actual legislation,[238] but rather in the spirit of the moralist, who, observing that almost inevitable evils accompany retail trade and commercialism, with human nature as it is, and that commerce, the servant of man, has become his master, sees almost the only hope of escape in its limitation to what is barely necessary. The age-long problem of a greedy commercialism, which is blind to the appeal of all other goods when profits are at stake, Plato certainly saw clearly, and outlined with the hand of a master. The problem faces us still, in a form even more acute, but the protests of Plato, Ruskin, and Carlyle are bearing positive fruit today, in a political economy that takes as its supreme goal human life at its best.
But aside from these generalities, a sympathetic study of Plato’s thought on exchange reveals an insight into certain specific points, of interest to modern economics, which are commonly overlooked. His protest against the former axiom of economics, that the prime purpose of trade is profit, and that the mere fact that goods change hands, necessarily increases the wealth of a country, is substantially correct.[239] Commerce for commerce’ sake is a clear case of mistaking the means for the end, and is contrary to sound economics as well as ethics. The objections of Plato and Ruskin[240] against the principle too generally accepted by business and economy of the past, at least tacitly, that “it is the buyer’s function to cheapen and the seller’s to cheat,” are being recognized today as worthy of consideration.
The anxiety of Plato over the effect of trades or professions upon character is well worthy of modern imitation, and this is, to a considerable extent, an economic as well as a moral question. Zimmern[241] has well observed: “Our neglect to study the effect of certain modern professions upon character, when we are always insisting, and rightly, upon the importance of a character-forming education, is one of the strangest lapses, due to the sway of nineteenth-century economics.”
As we have seen, one of the chief purposes of Plato in his limitation of commerce was to eliminate graft from the government. Though his remedy was not acceptable, yet his remarkable appreciation of a very grave problem that still faces us should be recognized. Furthermore, no better solution for it has ever been offered than the separation of politics from big business. This was the underlying principle of his suggestion, and it is in accord with the trend of modern statesmanship.
Another impelling motive of Plato in his stringent legislation was to render impossible the development of extremes of wealth or poverty in the state. Again, we should credit him with having clearly appreciated the problem, though we may criticize his attempted