Plato (428-347BC)
Western Philosophy
questions whether or not democracy can work
examines: nature of justice, nature and aquisition of power, and the values that people ought to live by.
Plato: From The Republic
he is telling a story about a conversation Socrates had with some disciples; Plato’s
work is divided into his writings based on Socrates’ philosophy (Socrates wrote nothing) and his
own later philosophy.
Plato: Constraint needed to make people behave.
lack of power
Plato: Division of labor needed to make a city work.
…Everyone specialize.
Plato: A “true” state meets needs; an unhealthy one develops when people want luxury.
Plato: An unhealthy city grows beyond its means and needs what other cites/states have.
Infatuation with wants over needs. Once have abundance, move to production for wants.
Plato: What insights about the human spirit does the story about Gyges provide?
Man will do wrong when he has the power. Men do right only when they have no power in society. Doing good has no benefit for the individual personally. EX: who are you when no one is watching?
What was the
process Plato described for the development of an economy?
Everyone needs to specialize in something.
What is the fundamental key to
that process?
Why did money and merchants develop in this economy?
B/c they didn’t want to waste the time of the producers.
What did Plato feel was
the natural end of this process?
War is inevitable, wants=more land to provide, wants=war.
Aristotle (384-322 BCE)
a Greek philosopher and scientist, a student of Plato who spent 20
years at the Lyceum, Plato’s university. He regarded the world as made up of individuals belonging
to fixed natural kinds or species. Aristotle also argued for the existence of a divine being, which he
believed is perfect and the aspiration of all things in the world because all things desire perfection.
Echoes of his thought can be found in Thomas Aquinas’ writing which we will study later
Aristotle: The “natural” art of money-making: household management
concerned with provision of food
attend to men
human excellence
virtue of freedom
The unnatural or improper methods of money-making: retail and usury
wealth and property have no limit
acquisition of inanimate objects
excellence of property
virtue of slaves
The concept of things having use value and acceptable exchange value; things have
unacceptable exchange value
(adj.) belonging to someone or something by its very nature, essential, inherent; originating in a bodily organ or part
rank or order as less important or consider of less value
to criticize harshly
Aristotle – How does Aristotle differentiate between the art of household management and the art
of making money?
natural vs unnatural
How does he feel about each?
he feels unnatural is unneccesary and not honorable.
Which is more like the “art” suggested by
Natural household managment
What is usury and what did he feel about that?
interest collected on loans. he feels this is the most unnatural.
Ayn (rhymes with “mine”) Rand (1905-1982)
An American novelist, philosopher and
controversial figure in 20th-century literary and philosophical debate. Rand believed that human
beings must live for themselves, neither sacrificing any part of their natures or goals to other people,
nor bending others’ wills to their own. Rand was also a firm atheist. Every book Rand published in
her lifetime is still in print. So far, copies sold total more then twenty million. Her vision of man
and her philosophy for living have changed the lives of thousands of readers and launched a
philosophic movement in American culture
Ayn: From the Atlas shrugged
The “money” speech by Francisco d’Anconia: Atlas Shrugged is a novel that imagines a world in
decline because money and personal effort are vilified, where government functionaries take money
away from hard-working capitalists and give it to “moochers and looters.” This was a thinly veiled
refutation of communism. When, at a cocktail party, Francisco is excoriated by a fellow guest, who
says he is a depraved product of money, he makes this famous speech.
Ayn: Individual rights
We are all metaphysical in some way, reality exists independnt of us, knowledge must be testable, and we are all self-interested organisms.
Wealth is the product of man’s capacity to think
self made man, the ultimate product
Ayn: Non-interference
No violence.
Ayn: Productive achievement as a noble activity
money is the noble medium of exchange
Ayn: Unlike Faust, man doesn’t live to work; he works to live
Willing to work for their money.
(v) to whip, punish severely; (n) a cause of affliction or suffering; a source of severe punishment or criticism
play up to another’s desires and weaknesses
How does Rand describe money and its motivation?
Money is the means of survival
How does she describe the love of
to love money is to know that it is know and love the fact that it is the creation of the best power within you. Lovers of money are willing to work for it, they are deserving.
Why did she feel that money was the “barometer of a society’s virtue?
The way money is used in a society can tell how doomed that society is.
Adam Smith (1723-1790)
was a Scottish-born philosopher and economist who wrote The Wealth of
Nations (1776) and is commonly referred to as the father of classical economics. Smith was
appointed commissioner of customs in Edinburgh in 1778. He served in this capacity until his
death. In 1787, he was also named lord rector of the University of Glasgow.
Smith’s Wealth of Nations
represents the first serious attempt in the history of economic thought to
separate the study of political economy from the related fields of political science, ethics, and law.
In this work Smith established the principle of the “invisible hand”: every individual in pursuing his
or her own good is led, as if by an invisible hand, to achieve the best good for all and therefore any
interference with free competition by government is almost certain to be injurious. The Wealth of
Nations has served as a guide to the formulation of governmental economic policies.
Pro-free market
Self-interest, free trade, division of labor, invisible hand.
Anti-government regulation of markets, although not anti-government in general
Government should only provide protection(army), provide justice and peace, maintenance of infrastructure….
Anti-trade barriers
That there shouldn’t be a lot, we should trade little.
Definition of what we today call gross domestic product (the wealth of a nation) = the
exchangeable value of all a nation produces
annual revenue of every society is alwasy precisely equal to the exchangeable value of the whole annual produce of its industry.
The invisible hand – the value of self-interest
Law of unintended purposes. The economy will take care of itself.
A free market grows the pie for all
Division(specialization) of labor. labor changes wealth.
Self interest leads to the exchange of goods which leads to a division of labor which leads
to the growth of wealth.
not locking anyone out, it is in self interest to invest near home(like Toyota plants). Self interest leads to profits; market force will push commerce in best interest of society; ultimately benefit society; self interest assumed in free market.

Increased competition. Competition leads to lower prices; all this creates jobs.

labor increases wealth

unnatural or artificial behavior, usually intended to impress
a skilled or artistic worker
the practice of lending money at exorbitant rates
How does Smith’s ideas mirror Plato’s?
specialization/division of labor
What did Smith feel about regulation? How
does the “invisible hand” work?
Is against it. Invisible Hand.
What is Smith’s view about barriers to foreign trade?
That there shouldn’t be a lot, we should trade little.
How does that relate to everyday business activity?
We need it. Also not one country can specialize in any one thing, so need other countries to get best product.
Ralph Waldo Emerson (1803-1882)
was an American essayist, poet, and a leader of the
philosophical movement of Transcendentalism. He was born in Boston, Massachusetts. Seven of
his ancestors were ministers, and his father, William Emerson, was minister of the First Church
(Unitarian) of Boston.
Wealth from Essays and Journals
The poem tells the story of evolution and consequences of development. Pay particular
attention to the last 6 lines of the poem.
The prose describes Emerson’s views on wealth.
Need for all men to be producers; views regarding who should be wealthy
Work- “know how to earn a blameless livelihood” “Every man is a consumer and out to be a producer” Add to the common wealth
The basis of wealth (application of mind to nature)
Effect of poverty; explicit and implicit meaning of money
When you’re poor, it makes you do anything to get the money- you’re immoral and Deceiving.
Measures of Economy and the rule of Impera Parendo
Relationship Thoreau
reckless wastefulness
impera parendo
know when to stop
more intense; strongly felt or perceived
extreme greed for material wealth
What were the messages Emerson communicated in the poem at the beginning of his
advent of business and the spread of commercialization in society. Must stay within the limits of natures law.
What was Emerson’s definition of a merchant and how can this be generalized to all
business activity?
Nature is an outgrowth of God, business is an outgrowth of nature, therefore, business is an outgrowth of God. Comparative advantage: nations first have it, china: labor us: technology. People have it as well ie brains, common sense, athletes.
How did his views mirror Thoreau’s?
They both were trancendelents. Both
What were Emerson’s view on the
acquisition of wealth?
Why did he believe that business was a game of skill?
How do his views
reflect those we read in Rand’s work?
What are the five measures of an economy he describes?