Economics and Aristotle's Division of the Sciences

by D.G. Boland © 1997

The following is from the Introduction to a paper given by the author to the IEPS 1997 conference.

Economics is a word made up from two Greek words "oikos" and "nomos". The first means a household, though in ancient times this referred to something somewhat more extensive than the modern household, so that it could signify a large estate or even a village. The second had the meaning of a distribution or management, being derived from "nemein", to distribute, manage. There are thus two ideas associated here; a general one of ordering, so that any ordered system came to be referred to as an economy, e.g. the celestial economy. The other more particular idea is one related to (the ordering of) human affairs, i.e. a conscious adaptation of means to end, so that we have the connotation of the avoidance of waste. More particularly still, there is the focus on the day-to-day affairs of people, their livelihood.

From the start, then, the word "economic" was associated with the close supervision and management necessary to ensure adequate provisions to a community. The management concerned, however, was that of the "household", so that "economic" was used as equivalent to "domestic", and economics in ancient and mediaeval times was a term used to distinguish the economy of the household (oikos) from that of the city (polis). For Aristotle, therefore, Economics and Politics meant two different studies and arts. In the very first book of his Politics he is most careful to make the point that the difference between a household and a city is one of kind and not one of degree, "as if there were no difference between a large household and a small state." (Politics, Bk 1, 1252a 12-15)

We have to be careful, then, when we apply, as we do in its modern usage, the word "economic" or "economy" at the political level. Its strong association with the notion of "managing" the affairs of a group of people is appropriate in such particular areas as say the "economics" of the farm, the factory or the firm, for there you have a a system of subordination analogous to that of the household. It is even true to apply it to the "economics" of the Government, if we are simply referring to how it manages its own "household" affairs, to provide for the strict needs of government as such. Budgets and such like are concerns of households and similar bodies which have free disposal over things because they are already their own property. It is important to note right from the start that Aristotle would not have approved of the modern political assumption that the government has the property of the citizens virtually at its disposal (because of its arbitrary power of taxation) to dispense and distribute as it sees fit. Such a political economic position is more akin to Plato's Republic (which is the object of Aristotle's criticism noted above).

We should avoid, then, such expressions as "managing" the economy when we mean the political economy. The civil community is not a household "run" by the government. The relationship between the Government (the State in the narrow sense) and the community (the State in the widest sense) is of a kind altogether different from that between the head of the household (or other analogous organisation) and the household itself. The head of the body politic has much less control over how the community (and therefore its economy) is "run". The communism of modern times makes the same mistake in this regard as Plato did. But all forms of socialism and theories of economic "management" (macro-economics) do the same to a greater or lesser degree.

Not that we ought to go to the other extreme, which is to look upon the political economy as some sort of natural order like the celestial economy, which "runs" completely independently of human, ie political, intervention (this is the micro-economic mistake). This is to divorce the notion of political economy, or Economics, altogether from general human, ie social, control. Human social affairs, including the provisioning of economic goods, are dependent upon good government. The point above made is simply that the government of a state (large or small) is not like the management of a household. It is a ruling of those who are free and able to provide for themselves (given good laws and institutions - which is the government's business); who therefore have their own property and have responsibility for the management of their own affairs. The role of the government or the state in these matters is subsidiary, not managerial.

D.G.Boland © 1997

Don Boland is a lecturer at the Centre for Thomistic Studies, in Sydney, Australia.

This article posted December 1997. It was published in Universitas, Vol 1 (1997), No. 2.
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