ARISTOTLE'S ECONOMICS - Part Three of our "The State in Economic Theory"

What makes the inversion of this age-old nexus between State and economy ever more peremptory and pressing is the fact that now more than ever we are witnessing how it is not the economy that is the foundation of the State but much rather it is the “statality” of being human (Hegel's Logos of the Objective State and Marx's notion of "species-conscious being" or Gattungswesen) that is culpably obfuscated by “economic science”. The great part of Aristotle’s study on the State, the Politics, is devoted to what he deems to be its foundation – the oikos or household whose “regulation” or “laws” (nomia) lend the name to present-day economics (oiko-nomia). Since Aristotle, and then thanks to his influence through Antiquity and the Christian Middle Ages, it is the laws of the household that found the reproduction of human society intended as societas civilis and not vice versa – that is, it is not the “statality” of human being that founds economics. With Aristotle, “the freedom of the ancients” answers to the physis of human beings – the zoon politikon. This is the active side of the animal sociale in that human beings seek ful-filment in Politics, in the State. Hence, the State is the ethico-political perfection of its citizens in the sense that the State’s ethico-political dimension, quite distinct from its police and military functions, is an emanation from the citizens as animalia rationalia (rational animals) distinct from other animals by the faculty of language and therefore of reason.

 

In Aristotelian metaphysics, the “nature” (physis) of an entity is to pro-duce or generate its “purpose” (telos). The nature of an entity is that without which that entity could not exist (its raison d’etre in French): the progeny of an entity is the telos of its physis. Hence, it is in the nature of the household to give rise to the State. The State exists because it is the ec-sistence of the household: the State is the telos of the household. The State is the telos (purpose) of the family household as the “natural” reproductive unit whose “nature” or physis it is to bring forth the State. But the nature of the household itself is constituted by that without which human beings could not exist – the union of man and woman. That is why for Aristotle it is not the individual but the household that takes precedence – because no individual could exist without a household. In turn, Aristotle contends, the household could not exist, would not be self-sufficient, without its more developed progeny – the State.

 

Yet, it is not the State that sanctions the rationality and ethico-political perfection of its citizens but it is the citizens who ful-fil and per-fect themselves by establishing the State. In Aristotle’s theory, the citizens play an active role in the formation and life of the State understood as a polity founded on the household as its natural reproductive unit. But they achieve this perfection only in the ethico-political sphere, not in the reproductive and economic one of the household! Because the State is perceived as an agglomerate of households, so far as the reproductive and economic spheres are concerned, the State serves merely as an adventitious mechanical instrument of protection against internal disruption (police) and external enemies (army). There is no “statality” in the sphere of social reproduction which is left entirely to “the household” - except where the household threatens social peace by exceeding, by going beyond, the bounds of its reproduction and thereby defeats the pursuit of the ethical ideal of the good life.

 

However much Aristotle may insist on its “self-sufficiency”, the State does not play a reproductive role in the society he describes given that its scope is limited to internal and external order. Here the ambit of the State, its role in society, is merely confined to the ethical one of “temperance and liberality” on the active side, and of policing and defence on the negative side. But in the first case the State turns out to be a wholly ideal, moral and ethical entity, and in the second case a purely mechanical and militarist one. There simply is no organic nexus between the existence of the State and the needs of households – there is no “statality” in the households which are presented instead as self-contained and “self-sufficient units”! Despite his contention to the contrary, the household Aristotle describes exists only ontogenetically, that is to say, it is capable of subsisting independently of the State! In reality, it is painfully evident from Aristotle’s exposition of his political theory that the interests of the household in expanding its genetic and territorial reach – its telos of “populating the earth” - will inevitably threaten the integrity of the State as a regulator of households and as a defender of them against external threats – because the expansion of households will make the State liable to internal dissolution if it is uneven, and also necessarily be liable to external attack if it is excessive – except for the entirely “idealistic and moralistic” Aristotelian prescription of “temperance” and “liberality”.

 

What makes Aristotle’s theory of the State idealistic and voluntarist is the fact that the interests of households and those of the State do not coincide – which is why Aristotle has to appeal passionately to the extrinsic philosophical ideal of “living well”. Of the two aspects of “the good life” as prescribed by Aristotle, one, temperance (phronesis or prudence), shrivels into a pious renunciation of profiteering by privileging use values over exchange values, whilst the other, liberality or the pursuit of excellence in the arts, degenerates into the cynicism of “knowledge is power”.

 

The incompatibility of the interests of the household in expanding its family and possessions and that of the State in regulating this impulse by means of the philo-sophic “ideal” of phronesis is made painfully evident by Aristotle’s invocation of it as a cure for the intrinsic ills of the household economy and its inevitable descent into the blind pursuit of wealth on which the Greek city-state was founded to its unavoidable detriment and undoing. Thus, the State in Antiquity was bound to remain a superstructural entity that was understood only in its ethico-political but not in its metabolic reproductive dimension – the dimension of social labour. The State legislates only over the policing of autonomous households in their relations inter se and over the defense of the polity because the households have no organic relation to one another: their interests inter se and therefore vis-à-vis the State are neither co-extensive nor harmonious – in fact, they are antagonistic.

 

As a result, even the apparent dis-interestedness of leisurely philosophical pursuits which are the deliberative active foundation of the Greek city-state is ultimately dependent on the material  “economic” ability of the household to support its master, the citizen who forms the State. But given the obvious antagonism between the material interests of individual households, this “economic” side of the State will never suffice to secure its survival as a free deliberative assembly of citizens! Aristotle fails to apply to his own political theory the critique that he deploys to dismiss Plato’s attempts in the Republic and the Laws to prescribe the forms of external intervention of the State on the autonomy of the household: given that the household remains the fundamental unit of the State and households have conflicting interests, it is impossible for the State to reconcile the divergent interests of households except in an idealistic and moralistic sense prescribed by phronesis.

 

Indeed, as Marx’s and other historical analyses of the ancient economy have shown (Karl Polanyi, The Great Transformation, Moses Finley, The Ancient Economy, Perry Anderson), Aristotle’s impassioned defence of the household and virulent condemnation of “wealth-seeking” is disarmingly moralistic or velleitary in that the “speculation” of chrematistics (commerce for the sake of profit) which so obviously endangers the survival of the Greek economy based on the household, can only be “tempered” by the pursuit of “the good life” or “excellence” epitomised by the love of wisdom or philo-sophy. But given that the speculative dis-interestedness of philo-sophy is supported materially by the “speculative” pursuit of wealth by the household (chrematistics or finance), it is quite simply impossible for philo-sophy, the real source of phronesis, to restrain its material speculative counterpart in the chrematistics blindly pursued by the household!

 

In Aristotle’s political theory, economics (the law of the household) is distinguished from chrematistics (the pursuit of abstract wealth for its own sake). Just how inconsistent and specious Aristotle’s plea for temperance and just how deficient his theory of the State are can be inferred from how the philosophical “speculation” that supposedly leads to temperance and liberality – to phronesis – rapidly and inexorably degenerates into the financial speculation that he so vehemently decries, in the example of Thales, the philosopher who, when reproached by his peers for wasting his time on pointless philosophical “speculation”, determined to show how knowledge can turn into power by “speculating” on the market for the production of olive oil by monopolising olive trees and oil-making equipment at a time when prices were low only to make a fortune by selling them when prices rose. The fact that knowledge (sophia) can demonstrate its power only by turning from philosophical speculation to financial speculation (chrematistike) shows just how contradictory and pathetic Aristotle’s pleas for temperance and liberality – for “living well” – are, because they are founded on his incomprehension of the inevitable inconsistent dynamics of the Greek city-state founded on private households. Here, the “speculation” of philosophy insidiously turns into the “speculation” of chrematistics just as swiftly and inevitably as the law of the household, oiko-nomia, was bound to turn by its internal contradictions into that of “finance”, chrematistics, and thereby come to threaten the very existence of the Greek polis or city-State! (In similar vein, Ernst Mach in Erkenntnis und Irrtum champions pure scientific research against its application for gain.)

 

In his review of Classical political theory in Theorie und Praxis, Habermas is too pre-occupied with decrying the abandonment of the ethico-political understanding of politics in Antiquity – which he, following Arendt [in The Human Condition], is very eager to praise - in the social theory of Thomism and the mechanistic scientism of Machiavelli and Hobbes, and so fails to stress the purely “idealistic/moralistic” or “voluntarist” nature of Aristotelian politics. This is the limit also of Herman E. Daly’s “ecological economics” directed precisely at this distinction between the household and chrematistics. Daly condemns modern economics for promoting chrematistics by neglecting “economics” in the Aristotelian sense (see hisThe Common Good). He fails to see that economic science [chrematistics] can return to the use values of the household only once “the household” itself has disappeared with the abolition of the individual labours of the wage relation. Daly sees “the irrational pursuit of wealth or exchange value for its own sake” – as did also Aristotle and Weber and the entire Scholastic opposition to usury – but cannot explain why the “use values” pursued by the economics of “households” have led inevitably to the exchange values of chrematistics and therefore to capitalism and its “science”, economics! Thus, his call for a return to the economics of the household, just like Habermas’s nostalgia for Aristotelian politics, remains voluntaristic because it fails to see that it is not “economic science”, or Habermas’s “scientized political science” since Machiavelli and Hobbes, that is the problem but rather the interests that lie behind the imposition of the wage relation by the capitalist State and its “private enterprise”.