HISTORY-ECONOMIC THOUGHT 125 (001) (Fall 2020)

Economics of Good and Evil

Economics of Good and Evil

The Quest for Economic Meaning from Gilgamesh to Wall Street

Tomas Sedlacek

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Library of Congress Cataloging-in-Publication Data

Sedlacek, Tomas, 1977– [Ekonomie dobra a zla. English] Economics of good and evil : the quest for economic meaning from Gilgamesh to Wall Street / Tomas Sedlacek. p. cm. Includes bibliographical references and index. ISBN 978-0-19-976720-5 (cloth : alk. paper) 1. Economics—Philosophy. 2. Economics—Moral and ethical aspects. 3. Good and evil. 4. Civilization—History. 5. Literature and morals. I. Title.

HB72.S36513 2011 174—dc22 2010030271

978-0-19-976720-5 (cloth)

Editor of the Czech original: Jiří Nádoba, Co-editors: Martin Pospíšil, Lukáš Tóth Translation: Douglas Arellanes Illustrations (inside): Milan Starý

First published in Czech as Ekonomie dobra a zla, 2009, by 65. pole Publishing, Konevova 121, Praha 3, Czech Republic.

9 8 7 6 5 4 3 2 1

Printed in the United States of America on acid-free paper

This book was translated into English with the kind support of ČSOB a.s., a member of KBC Group.

To my young son Chris, who I feel understands more than I ever will, as perhaps I also did long ago. Anyway, may you one day write a better book.

Know then thyself, presume not God to scan The proper study of mankind is man. Placed on this isthmus of a middle state, A being darkly wise, and rudely great: With too much knowledge for the sceptic side, With too much weakness for the stoic’s pride, He hangs between; in doubt to act, or rest; In doubt to deem himself a God, or beast; In doubt his mind and body to prefer; Born but to die, and reas’ning but to err; Alike in ignorance, his reason such, Whether he thinks too little, or too much; Chaos of thought and passion, all confus’d; Still by himself, abus’d or disabus’d; Created half to rise and half to fall; Great lord of all things, yet a prey to all, Sole judge of truth, in endless error hurl’d; The glory, jest and riddle of the world.

Alexander Pope, The Riddle of the World

Contents

Foreword by Václav Havel Acknowledgments

Introduction: The Story of Economics: From Poetry to Science

PART I: ANCIENT ECONOMICS AND BEYOND

1 The Epic of Gilgamesh: On Effectiveness, Immortality, and the Economics of Friendship

2 The Old Testament: Earthliness and Goodness

3 Ancient Greece

4 Christianity: Spirituality in the Material World

5 Descartes the Mechanic

6 Bernard Mandeville’s Beehive of Vice

7 Adam Smith, Blacksmith of Economics

PART II: BLASPHEMOUS THOUGHTS

8 Need for Greed: The History of Want

9 Progress, New Adam, and Sabbath Economics

10 The Axis of Good and Evil and the Bibles of Economics

11 The History of the Invisible Hand of the Market and Homo Economicus

12 The History of Animal Spirits: The Dream Never Sleeps

13 Metamathematics

14 Masters of Truth: Science, Myths, and Faith

Conclusion: Where the Wild Things Are

Bibliography Index

Foreword Václav Havel

I had the opportunity to read Tomas Sedlacek’s book before it was published in the Czech Republic in 2009 under the same title, and it was obvious that it was an unconventional view on a scientific discipline that—as the general belief has it—is exceptionally dull. Of course I was taken with the book, and I was curious about the kind of interest it would provoke in other readers. To the surprise of both the author and publisher, it immediately drew so much attention in the Czech Republic that it became a bestseller within a few weeks, and both experts and the general public were talking about it. By coincidence, Tomas Sedlacek was at that time also a member of the Czech government’s National Economic Council, which, in its behavior as well as its views on long-term goals, stood in sharp contrast to the quarrelsome political environment, which usually doesn’t think further than the next election.

Instead of self-confident and self-centered answers, the author humbly asks fundamental questions: What is economics? What is its meaning? Where does this new religion, as it is sometimes called, come from? What are its possibilities and its limitations and borders, if there are any? Why are we so dependent on permanent growing of growth and growth of growing of growth? Where did the idea of progress come from, and where is it leading us? Why are so many economic debates accompanied by obsession and fanaticism? All of this must occur to a thoughtful person, but only rarely do the answers come from economists themselves.

The majority of our political parties act with a narrow materialistic focus when, in their programs, they present the economy and finance first; only then, somewhere at the end, do we find culture as something pasted on or as a libation for a couple of madmen. Whether they are on the right or left, most of them—consciously or unconsciously —accept and spread the Marxist thesis of the economic base and the spiritual superstructure.

It may all be related to how economics as a scientific discipline frequently tends to be mistaken for mere accounting. But what good is accounting when much of what jointly shapes our lives is difficult to calculate or is completely incalculable? I wonder what such an economist-accountant would do if given the task to optimize the work of a symphony orchestra. Most likely he would eliminate all the pauses from Beethoven concerts. After all, they’re good for nothing. They just hold things up, and orchestra members cannot be paid for not playing.

The author’s questioning breaks down stereotypes. He tries to break free of narrow specialization and cross the boundaries between scientific disciplines. Expeditions beyond economics’ borders and its connection to history, philosophy, psychology, and ancient myths are not only refreshing, but necessary for understanding the world of the twenty-first century. At the same time, this is a readable book that is also accessible to laymen, in which economics becomes a path to adventure. We do not always find an exact answer to the permanent search for its end, only more reasons for even deeper considerations of the world and man’s role in it.

In my presidential office, Tomas Sedlacek belonged to the generation of young colleagues who promised a new view on the problems of the contemporary world, one unburdened by four decades of the totalitarian Communist regime. I have the feeling that my expectations were fulfilled, and I believe you, too, will appreciate his book.

Acknowledgments

In the Czech edition of this book, I wrote a very brief thank-you. That was not a good idea, so I will be more verbose this time. This book took many years to be born, innumerable conversations, hundreds of lectures, and countless books read over many a long night.

I owe this book to my two great teachers, Professor Milan Sojka (who led me in this work) and H. E. Milan “Mike” Miskovsky (who inspired me on the whole topic, many years ago). This book is dedicated to their memory. Neither is with us anymore.

I owe thanks to my great teacher, Professor Lubomír Mlčoch, whom I had the honor to work as a teaching assistant in his Business Ethics classes. I give my great thanks to Professor Karel Kouba, Professor Michal Mejstřík, and Professor Milan Žák for their leadership. I thank my 2010 class of Philosophy of Economics for their comments and thoughts.

I would like to thank Professor Catherine Langlois and Stanley Nollen from Georgetown University for teaching me how to write, and also Professor Howard Husock from Harvard University. I would like to express my great gratitude to Yale University for offering me a very gracious fellowship, during which I wrote a substantial part of the book. Thank you, Yale World Fellows, and all at Betts House.

Great thanks to the outstanding Jerry Root, for welcoming us to stay in his basement for a month to work on the book in perfect quiet, and for the pipe and smokes; David Sween, for making it all happen; and James Halteman, for all the books. Thank you to Dušan Drabina, for support in the hardest times.

There are many philosophers, economists, and thinkers to whom I feel honored to express thanks: Professor Jan Švejnar, Professor Tomáš Halík, Professor Jan Sokol, Professor Erazim Kohák, Professor Milan Machovec, Professor Zdeněk Neubauer, David Bartoň, Mirek Zámečník, and my younger brother, the great thinker Lukáš. You have my thanks and admiration. I can never express enough thanks to the rest of my family, especially my father and mother.

Now, the biggest thanks for the most specific help with this book goes to the team who cooperated on the Czech and English versions. Tomáš Brandejs, for ideas, faith, and courage; Jiří Nádoba, for editing and management; Betka Sočůvková, for patience and endurance; Milan Starý, for drawings, creativity, and kindness; Doug Arellanes, for thorough translation; and Jeffrey Osterroth, for detailed English proofreading.

Now, there are two great minds who helped me to write and edit parts of the book: Martin Pospíšil and Lukáš Tóth, my two intellectual fellows. I cannot thank them enough for their brilliant thoughts, keen debates, and research, as well as their hard work on specific chapters, which they co-authored. I would also like to thank my colleagues at ČSOB, a.s. for a creative work environment and support.

My wife, Markéta, has stood with me in times when no other imaginable person would. Thank you also for your smiles and thoughts (she is a sociologist, so you can imagine our dinner discussions). This book really belongs to her.

But the biggest thanks go to the one whose name I actually don’t even know …

Economics of Good and Evil

Introduction The Story of Economics: From Poetry to Science

Reality is spun from stories, not from material. Zdeněk Neubauer

There is no idea, however ancient and absurd, that is not capable of improving our knowledge …

Anything goes … Paul Feyerabend

Man has always striven to understand the world around him. To this end he was helped by stories that made sense of his reality. From today’s standpoint, such stories often seem quaint—much as ours will appear to the generations that follow. However, the secret power of these stories is profound.

One such story is the story of economics, which began a long time ago. Xenophon wrote around 400 BC that “even if a man happens to have no wealth, there is such a thing as a science of economics.”1 Once upon a time, economics was the science of managing a household,2 later a subset of religious, theological, ethical, and philosophical disciplines. But, little by little, it seems to have become something quite different. We may sometimes feel that economics has gradually lost all of its shades and hues to a technocratic world where black and white rule. But the story of economics is far more colorful.

Economics, as we know it today, is a cultural phenomenon, a product of our civilization. It is not, however, a product in the sense that we have intentionally produced or invented it, like a jet engine or a watch. The difference lies in the fact that we understand a jet engine or a watch—we know where they came from. We can (almost) deconstruct them into their individual parts and put them back together. We know how they start and how they stop.3 This is not the case with economics. So much originated unconsciously, spontaneously, uncontrolled, unplanned, not under the conductor’s baton. Before it was emancipated as a field, economics lived happily within subsets of philosophy—ethics, for example—miles away from today’s concept of economics as a mathematical- allocative science that views “soft sciences” with a scorn born from positivistic arrogance. But our thousand-year “education” is built on a deeper, broader, and oftentimes more solid base. It is worth knowing about.

MYTHS, STORIES, AND PROUD SCIENCE It would be foolish to assume that economic inquiry began with the scientific age. At first, myths and religions explained the world to people, who ask basically similar questions as we do today; today, science plays that role. Thus, to see this link, we must dive into far more ancient myths and philosophy. That is the reason for this book: to look for economic thought in ancient myths and, vice versa, to look for myths in today’s economics.

Modern economics is considered to have begun in 1776 with the publication of Adam Smith’s Wealth of Nations. Our postmodern age (which seems to be significantly humbler than its predecessor, the modern scientific age)4 is more likely to look further back and is aware of the power of history (path dependency), mythology, religion, and fables. “The separation between the history of a science, its philosophy, and the science itself dissolves into thin air, and so does the separation between science and non-science; differences between the scientific and unscientific are vanishing.”5 Therefore, we shall set out as early as the written legacy of our civilization allows. We shall search for the first traces of economic inquiry in the epic of the Sumerian king Gilgamesh and explore how Jewish, Christian, classical, and medieval minds considered economic issues. Additionally, we shall carefully investigate the theories of those who laid the foundations for contemporary economics.

The study of the history of a certain field is not, as is commonly held, a useless display of its blind alleys or a collection of the field’s trials and errors (until we got it right), but history is the fullest possible scope of study of a menu that the given field can offer. Outside of our history, we have nothing more. History of thought helps us to get rid of the intellectual brainwashing of the age, to see through the intellectual fashion of the day, and to take a couple of steps back.

Studying old stories is not only for the benefit of historians, or for understanding the way our ancestors thought. These stories have their own power, even after new stories appear and replace or contradict them. An example could be drawn from the most famous dispute in history: the dispute between the story of geocentrism and the story of heliocentrism. As everyone knows, in the battle between helio- and geocentrism, the heliocentric story won, though even today we geocentrically say that the Sun rises and sets. But the Sun does not rise or set: if anything is rising,

it’s our Earth (around the Sun), not the Sun (around the Earth). The Sun does not revolve around the Earth; the Earth revolves around the Sun—so we are told.

Furthermore, those ancient stories, images, and archetypes that we will examine in the first part of the book are with us to this day and have cocreated our approach to the world, as well as how we perceive ourselves. Or, as C. G. Jung puts it, “The true history of the mind is not preserved in learned volumes but in the living mental organism of everyone.”6

THE DESIRE TO PERSUADE Economists should believe in the power of stories; Adam Smith believed. As he puts it in The Theory of Moral Sentiments, “the desire of being believed, or the desire of persuading, of leading and directing other people, seems to be one of the strongest of all our natural desires.”7 Note that this sentence comes from the alleged father of self- interest being the strongest of all our natural desires. Two other great economists, Robert J. Shiller and George A. Akerlof, recently wrote: “The human mind is built to think in terms of narratives … in turn, much of human motivation comes from living through a story of our lives, a story that we tell to ourselves and that creates a framework of our motivation. Life could be just ‘one damn thing after another’ if it weren’t for such stories. The same is true for confidence in a nation, a company, or an institution. Great leaders are foremost creators of stories.”8

The original quote comes from “Life isn’t one damn thing after another. It’s the same damn thing again and again.” This is well put, and myths (our grand stories, narratives) are “revelations, here and now, of what is always and forever.”9 Or, in other words, myths are what “never happened, but always are.”10 However, our modern economic theories based on rigorous modeling are nothing more than these metanarratives retold in different (mathematical?) language. So it is necessary to learn this story from the beginning—in a broad sense, for one will never be a good economist, who is only an economist.11

And since economics wants imperially to understand everything, we must venture out of our field to truly try to understand everything. And if it is at least partially true that “salvation was now to be a matter of ending material scarcity, leading humankind into a new era of economic abundance, [and that] it followed logically that the new chief priesthood should consist of economists,”12 then we must be aware of this crucial role and take a broader social responsibility.

THE ECONOMICS OF GOOD AND EVIL All of economics is, in the end, economics of good and evil. It is the telling of stories by people of people to people. Even the most sophisticated mathematical model is, de facto, a story, a parable, our effort to (rationally) grasp the world around us. I will try to show that to this day that story, told through economic mechanisms, is essentially about a “good life,” a story we have borne from the ancient Greek and Hebrew traditions. I will try to show that mathematics, models, equations, and statistics are just the tip of the iceberg of economics; that the biggest part of the iceberg of economic knowledge consists of everything else; and that disputes in economics are rather a battle of stories and various metanarratives than anything else. People today, as they have always, want to know from economists principally what is good and what is bad.

We economists are trained to avoid normative judgments and opinions as to what is good and bad. Yet, contrary to what our textbooks say, economics is predominantly a normative field. Economics not only describes the world but is frequently about how the world should be (it should be effective, we have an ideal of perfect competition, an ideal of high-GDP growth in low inflation, the effort to achieve high competitiveness …). To this end, we create models, modern parables, but these unrealistic models (often intentionally) have little to do with the real world. A daily example: If an economist on television answers a seemingly harmless question about the level of inflation, in one blow a second question will be presented (which an economist will frequently add himself without being asked) as to whether the level of inflation is good or bad, and whether inflation should be higher or lower. Even with such a technical question, analysts immediately speak of good and bad and offer normative judgments: It should be lower (or higher).

Despite this, economics tries, as if in a panic, to avoid terms such as “good” and “evil.” It cannot. For “if economics were truly a value-neutral undertaking, one would expect that members of the economics profession would have developed a full body of economic thought.”13 This, as we have seen, has not happened. In my view, it is a good thing, but we must admit that economics is, at the end of the day, more of a normative science. According to Milton Friedman (Essays in Positive Economics), economics should be a positive science that is value-neutral and

describes the world as it is and not how it should be. But the comment itself that “economics should be a positive science” is a normative statement. It does not describe the world as it is but as it should be. In real life, economics is not a positive science. If it were, we would not have to try for it to be. “Of course most men of science, and many philosophers, use the positivistic doctrine to avoid the necessity of considering perplexing fundamental questions— in short, to avoid metaphysics.”14 By the way, being value-free is a value in itself, a great value to economists anyway. It is a paradox that a field that primarily studies values wants to be value-free. One more paradox is this: A field that believes in the invisible hand of the market wants to be without mysteries.

So in this book I ask the following questions: Is there an economics of good and evil? Does it pay to be good, or does good exist outside the calculus of economics? Is selfishness innate to mankind? Can it be justified if it results in the common good? If economics is not to become simply a mechanical-allocational, econometric model without any deeper meaning (or application), it is worth asking such questions.

By the way, there is no need to fear words such as “good” or “evil.” Using them does not mean we are moralizing. Everyone has some internalized ethics according to which we act. In the same way, we each have a certain faith (atheism is a faith like any other). It is like that with economics, too, as John Maynard Keynes puts it: “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist…. Sooner or later, it is ideas, not vested interests, which are dangerous for good or evil.”15

WHAT THIS BOOK IS ABOUT: META-ECONOMICS This book is composed of two parts: In the first part we look for economics in myths, religion, theology, philosophy, and science. In the second part, we look for myths, religion, theology, philosophy, and science in economics.

We will search our entire history for answers, from the beginnings of our culture to our current postmodern age. Our goal is not to examine every moment that helped change later generations’ (and our current) economic perception of the world; it is to look at the stops in the development, either at certain historical epochs (the age of Gilgamesh and the eras of the Hebrews, and Christians, etc.) or at significant personalities that influenced the development of man’s economic understanding (Descartes, Mandeville, Smith, Hume, Mill, et al.). Our goal is to tell the story of economics.

In other words, we seek to chart the development of the economic ethos. We ask questions that come before any economic thinking can begin—both philosophically and, to a degree, historically. The area here lies at the very borders of economics—and often beyond. We may refer to this as protoeconomics (to borrow a term from protosociology) or, perhaps more fittingly, metaeconomics (to borrow a term from metaphysics).16 In this sense, “the study of economics is too narrow and too fragmentary to lead to valid insight, unless complemented and completed by a study of metaeconomics.”17 The more important elements of a culture or field of inquiry such as economics are found in fundamental assumptions that adherents of all the various systems within the epoch unconsciously presuppose. Such assumptions appear so obvious that people do not know what they are assuming, because no other way of putting things has ever occurred to them, as the philosopher Alfred Whitehead notes in Adventures of Ideas.

What exactly are we doing? And why? Can we do (ethically) all that we can do (technically)?18 And what is the point of economics? What is all the effort for? And what do we really believe and where do our (often unknown) beliefs come from? If science is “a system of beliefs to which we are committed,” what beliefs are they?19 As economics has become a key field of explaining and changing the world today, these are all questions that need to be asked.

In a somewhat postmodern fashion, we will try to have a philosophical, historical, anthropological, cultural, and psychological approach to metaeconomics. This book aims to capture how the perception of man’s economic dimension developed and to reflect on it. Almost all of the key concepts by which economics operates, both consciously and unconsciously, have a long history, and their roots extend predominantly outside the range of economics, and often completely beyond that of science. Let us now attempt to examine the beginnings of economic belief, the genesis of these ideas and their influence on economics.

TO ALL THE COLORS OF ECONOMICS I argue that mainstream economists have forsaken too many colors of economics and have been overobsessed with the black-and-white cult of homo economicus, which ignores issues of good and evil. We have created a self- inflicted blindness, a blindness to the most important driving forces of human actions.

I argue that there is at least as much wisdom to be learned from our own philosophers, myths, religions, and poets as from exact and strict mathematical models of economic behavior. I argue that economics should seek, discover, and talk about its own values, although we have been taught that economics is a value-free science. I argue that none of this is true and that there is more religion, myth, and archetype in economics than there is mathematics. I argue that in economics nowadays there is too much emphasis on the method rather than on the substance. I argue and try to show that it is crucial for economists, and a wider audience as well, to learn from a wide group of sources, such as the Epic of Gilgamesh, the Old Testament, Jesus, or Descartes. The traces of our way of thinking are more readily understood when we look at their historical beginnings, when the thoughts were, so to speak, more naked—there we can see the origins and sources of such ideas easier. Only thus can we identify our principal (economic) beliefs—in the complicated web of today’s society, in which they are still very strong but go unnoticed.

I argue that to be a good economist, one has to either be a good mathematician or a good philosopher or both. I argue that we have overemphasized the mathematical and neglected our humanity. This has led to the evolution of lopsided, artificial models that are often of little use when it comes to understanding reality.

I argue that the study of metaeconomics is important. We should go beyond economics and study what beliefs are “behind the scenes,” ideas that have often become the dominant yet unspoken assumptions in our theories. Economics is surprisingly full of tautologies that economists are predominantly unaware of. I argue that the nonhistorical perspective, which has become dominant in economics, is wrong. I argue that it is more important in understanding human behavior to study the historical evolution of ideas that shape us.

This book is a contribution to the long-lasting clash between normative and positive economics. I argue that the role normative myths and parables had in ancient times is now played by scientific models. This is fine, but we should openly admit it.

I argue that economic questions were with mankind long before Adam Smith. I argue that the search for values in economics did not start with Adam Smith but culminated with him. The modern mainstream, which claims to descend from classical Smith-economics, has neglected ethics. The issue of good and evil was dominant in classical debates, yet today it is almost heretical to even talk about it. I further argue that the popular reading of Adam Smith is a misunderstanding. I argue that his contribution to economics is much broader than just the concept of the invisible hand of the market and the birth of the egoistic, self-centered homo economicus, although Smith never used that term. I argue that his most influential contribution to economics was ethical. His other thoughts had been clearly expressed long before him, whether on specialization, or on the principle of the invisible hand of the market. I try to show that the principle of the invisible hand of the market is much more ancient and developed long before Adam Smith. Traces of it appear even in the Epic of Gilgamesh, Hebrew thought, and in Christianity, and it is expressly stated by Aristophanes and Thomas Aquinas.

I argue that now is a good time to rethink our economic approach, because now, in the time of the debt-crisis, is a time when people care and are willing to listen. I argue that we have not really learned our economic lessons from the simplest Sunday school stories, such as the story of Joseph and the Pharaoh, although we have sophisticated mathematical models at hand. I argue that we should reconsider our growth-only thinking. I argue that economics can be a beautiful science that can appeal to a wide audience.

In a way, this is a study of the evolution of both homo economicus and, more importantly, the history of the animal spirits within him. This book tries to study the evolution of the rational as well as the emotional and irrational side of human beings.

THE BORDERS OF CURIOSITY, AND A DISCLAIMER Since economics has dared to imperialistically apply its system of thought to provinces traditionally belonging to religious studies, sociology, and political science, why not swim against the current and look at economics from the viewpoint of religious studies, sociology, and political science? As long as modern economics dares to explain the operation of churches or conduct economic analyses of family ties (often resulting in new and interesting insights), why not examine theoretical economics as we would systems of religions or of personal relationships? In other words, why not attempt an anthropological view of economics?

To look at economics in such a way, we must first distance ourselves from it. We must venture to the very borders of economics—or, even better, beyond them. Following Ludwig Wittgenstein’s metaphor of the eye observing its surroundings but never itself to examine an object (Wittgenstein, Tractatus Logico-Philosophicus, section 5.6), it is always necessary to step outside of it, and if that is not possible, at the very least, to use a mirror. In this book we will employ anthropological, mythical, religious, philosophical, sociological, and psychological mirrors—anything that provides us with a reflection.

Here, at least two apologies must be offered. First, if we look at our own reflection in anything and everything around us, we often get a fractured and disparate picture. This book does not wish to offer an intricately woven system (for the simple reason that no such system exists). Importantly, we will only deal with the legacy of our Western culture and civilization and will not study here other legacies (such as Confucian, Islamic, Buddhist, Hunduist, and many others, although we would certainly find a great deal of stimulating ideas if we did). Furthermore, we will not, for example, tackle the entirety of Sumerian literature. We will discuss Hebrew and Christian thought that concerns economics, but we will not study the whole of ancient and medieval theologies. Our goal will be to pick out the key influences and revolutionary concepts that created today’s economic modus vivendi. The justification for such a broad and somewhat disjointed approach is the idea Paul Feyerabend explained long ago, that “anything goes.”20 We can never predict from which well science will draw inspiration for its further development.

The next apology concerns the possible simplification or distortion of those fields that the author finds important despite being located entirely within another realm. Today, science enjoys hiding behind an ivory wall built here from mathematics, there from Latin or Greek, from history, from axioms, and other sacred rituals, so scientists can enjoy undeserved sanctuary from critics from other fields and the public. But science must be open; otherwise, as Feyerabend aptly noted, it becomes an elitist religion for the initiates, radiating its totalitarian beams back at the public. In the words of the Czech-born, American economist Jaroslav Vanek, “unfortunately or fortunately, one’s curiosity is not limited to one’s professional field.”21 If this book inspires new insights in fusion of economics with these other areas, then it has fulfilled its raison d’être.

This is not a book on the thorough history of economic thought. The author aims instead to supplement certain chapters on the history of economic thought with a broader perspective and analysis of the influences that often escape the notice of economists and the wider public.

Perhaps it should be said that this text contains quite a number of quotations. This provides the closest approximation to the valuable ideas of distant ages in the words of the original authors. If we only paraphrased the ancient words, their authenticity and the spirit of the age would simply evaporate—a terrible loss. The footnotes provide the opportunity for deeper study of the problems given.

CONTENTS: SEVEN EPOCHS, SEVEN TOPICS The book is divided into two parts. The first follows a line through history, which in seven stops focuses specifically on seven topics, which will then be summarized in the second part. The second part is therefore thematic; it harvests historical topics and integrates them. In this sense, the book is a bit like a matrix; you can follow it historically, or thematically, or both. The seven topics are as follows:

The Need for Greed: The History of Consumption and Labor Here we start with the most ancient myths, in which labor figures as the original human calling, labor for pleasure, and later (through insatiability) as a curse. God or the gods either curse labor (Genesis, Greek myths) or curse too much labor (Gilgamesh). We will analyze the birth of desire and lust, or demand. We will then examine asceticism in various concepts. Later, Augustinian contempt for this world dominates; Aquinas turns the pendulum, and the material world gets attention and care. Until then, care for the soul dominated and the desires and needs of the body and the world were marginalized. Later, the pendulum would again swing the opposite way, in the direction of individualistic-utilitarian consumption. Nevertheless, from his beginnings, man has been marked as a naturally unnatural creature, who for unique reasons surrounds himself with external possessions. Insatiability, both material and spiritual, are basic human metacharacteristics, which appear as early as the oldest myths and stories.

Progress (Naturalness and Civilization) Today we are intoxicated by the idea of progress, but in the very beginning, the idea of progress was nonexistent.22 Time was cyclical, and humanity was expected to make no historical motion. Then the Hebrews, with linear time, and later the Christians gave us the ideal (or amplified the Hebrew ideal) we now embrace. Then the classical economists secularized progress. How did we come to today’s progression of progress, and growth for growth’s sake?

The Economy of Good and Evil We will examine a key issue: Does good pay (economically)? We will start first with the Epic of Gilgamesh, where the morality of good and evil, it would appear, were not connected; on the other hand, later, in Hebrew thought, ethics ruled as an explanatory factor in history. The ancient Stoics did not permit the calculation of the yield of

good, and the Hedonists, on the other hand, believed that anything that paid in its results was good as a rule. Christian thinking broke a clear causality between good and evil through divine mercy and shifted reward for good or evil to the afterlife. This theme culminates with Mandeville and Adam Smith, in the now-famous dispute on private vices that produce public benefit. Later, John Stuart Mill and Jeremy Bentham built their utilitarianism on a similar Hedonistic principle. The entire history of ethics has been ruled by an effort to create a formula for the ethical rules of behavior. In the final chapter we will show the tautology of Max Utility, and we will discuss the concept of Max Good.

The History of the Invisible Hand of the Market and Homo Economicus How ancient is the idea of the invisible hand of the market? How long before Adam Smith was this concept with us? I will try to show that fore-shadowing of the invisible hand of the market is almost everywhere. The idea that we can manage to utilize our natural egoism, and that this evil is good for something, is an ancient philosophical and mythical concept. We will also look into the development of the ethos of homo economicus, the birth of “economic man.”

The History of Animal Spirits: Dreams Never Sleep Here we will examine the other side of human beings—the unpredictable, often arational and archetypal. Our animal spirits (something of a counterpart to rationality) are influenced by the archetype of the hero and our concept of what is good.

Metamathematics From where did economics get the concept of numbers as the very foundation of the world? Here we want to show how and why economics has become a mechanistically allocative field. Why do we believe that mathematics is the best way to describe the world (even the world of social interactions)? Is mathematics at the core of economics, or is it just the icing of the cake, the tip of the iceberg of our field’s inquiry?

Masters of the Truth What do economists believe? What is the religion of economists? And what is the character of truth? The effort to rid science of myth has been with us from the time of Plato. Is economics a normative field or positive science? Originally, truth was a domain of poems and stories, but today we perceive truth as something much more scientific, mathematical. Where does one go (to shop) for the truth? And who “has the truth” in our epoch?

PRACTICAL ISSUES AND DEFINITIONS When we mention economics in this book, we mean the mainstream perception of it, perhaps as best represented by Paul Samuelson. By the term homo economicus, we mean the primary concept of economic anthropology. It comes from the concept of a rational individual, who, led by narrowly egotistical motives, sets out to maximize his benefit. We will avoid the question of whether economics is or is not, properly stated, a science. So although we may occasionally refer to it as a social science, we often only mean the field of economics. We understand “economics” to mean a broader field than just the production, distribution, and consumption of goods and services. We consider economics to be the study of human relations that are sometimes expressible in numbers, a study that deals with tradables, but one that also deals with nontradables (friendship, freedom, efficiency, growth).

I have been blessed with three experiences in life. I worked for many years in academia, studying, researching, and teaching theoretical economics (dealing with meta-economic dilemmas). I also served for many years as an economic advisor on economic policy—working as an advisor to our former Czech president, Václav Havel, to our minister of finance, and, eventually, to our prime minister (on the practical application of economic policy). It is also my duty and (often) pleasure to be a regular columnist at our leading economic daily, writing about the practical, as well as philosophical, aspects of economics for a wide audience (simplifying things, trying to create a fusion of different fields of inquiry). This experience has taught me the limits and advantages of each side of economics. This triple schizophrenia (What is the meaning of economics? How can we use it practically? and How can it be connected with other fields in an understandable way?) has always been with me. For good or for bad, this book, which I offer here, is the result.

Part I: ANCIENT ECONOMICS AND BEYOND

1 The Epic of Gilgamesh On Effectiveness, Immortality, and the Economics of Friendship

Gilgamesh, wherefore do you wander? The eternal life you are seeking you shall not find…. Always be happy, night and day. Night

and day play and dance. The Epic of Gilgamesh

The Epic of Gilgamesh dates from more than four thousand years ago1 and is the oldest work of literature available to humankind. The first written records come from Mesopotamia, as do the oldest human relics. This is true not only of our civilization but of humankind in general.2 The epic served as an inspiration for many stories that followed, which dominate mythology to this day in more or less altered form, whether it is about the motif of the flood or the quest for immortality. Even in this oldest work known to men, however, questions we today consider to be economic play an important role—and if we want to set out on a trail of economic questioning, we can go no deeper into history than this. This is the bedrock.

Only a fraction of the material relics survive from the period before the epic, and only fragments remain of written records relating mainly to economics, diplomacy, war, magic, and religion.3 As the economic historian Niall Ferguson (somewhat cynically) notes, these are “reminders that when human beings first began to produce written records of their activities they did so not to write history, poetry, or philosophy, but to do business.”4 But the Epic of Gilgamesh bears witness to the opposite—despite the fact that the first written clay fragments (such as notes and bookkeeping) of our ancestors may have been about business and war, the first written story is mainly about great friendship and adventure. Surprisingly, there is no mention of either money or war; for example, not once does anyone in the whole epic sell or purchase something.5 No nation conquers another, and we do not encounter a mention even of the threat of violence. It is a story of nature and civilization, of heroism, defiance, and the battle against the gods, and evil; an epic about wisdom, immortality, and also futility.

Despite being a text of such great importance, it seems to have completely escaped the attention of economists. There is no economic literature on the Epic of Gilgamesh. At the same time, this is where we encounter our civilization’s very first economic contemplation; the beginnings of well-known concepts such as the market and its invisible hand, the problem of utilizing natural wealth and efforts at maximizing effectiveness. A dilemma appears on the role of feelings, the term “progress,” and the natural state, or the topic of the comprehensive division of labor connected with the creation of the first cities. This is the first feeble attempt to understand the epic from an economic standpoint.6

First, though, let’s briefly summarize the story line of the Epic of Gilgamesh (we will develop it in greater detail shortly). Gilgamesh, the ruler of the city of Uruk, is a superhuman semigod: “two thirds of him god and one third human.”7 The epic begins with a description of a perfect, impressive, and immortal wall around the city that Gilgamesh is building. As punishment for the merciless treatment of his workers and subjects, the gods call on the savage Enkidu to stop Gilgamesh. But the two become friends, an invincible pair, and together they carry out heroic acts. Later, Enkidu dies, and Gilgamesh sets out in search of immortality. He overcomes numerous obstacles and pitfalls, but immortality eludes him, if only by a hair’s breadth. The end of the story returns to where the epic began —to the song in praise of Uruk’s wall.

UNPRODUCTIVE LOVE Gilgamesh’s effort to build a wall like no other is the central plot of the entire story. Gilgamesh tries to increase his subjects’ performance and effectiveness at all costs, even preventing them from having contact with their wives and children. So the people complain to the gods:

The young men of Uruk he harries without warrant, Gilgamesh lets no son go free to his father (…) Gilgamesh lets no girl go free to her bridegroom The warrior’s daughter, the young man’s bride.8

This has a direct relation to the emergence of the city as a place that manages the countryside around it. “The village neighbors would now be kept at a distance: no longer familiars and equals, they were reduced to subjects,

whose lives were supervised and directed by military and civil officers, governors, viziers, tax-gatherers, soldiers, directly accountable to the king.”9

A principle so distant and yet so close. Even today we live in Gilgamesh’s vision that human relations—and therefore humanity itself—are a disturbance to work and efficiency; that people would perform better if they did not “waste” their time and energy on nonproductive things. Even today, we often consider the domain of humanity (human relations, love, friendship, beauty, art, etc.) to be unproductive; maybe only with the exception of reproduction, the only one which is literally(!) productive, reproductive.

This effort to maximize effectiveness at any cost, this strengthening of the economic at the expense of the human, reduces humans across the breadth of their humanity to being mere production units. The beautiful, originally Czech word “robot”10 perfectly expresses this: The word is based on the old Czech and Slavic word “robota,” which means “work.” A person reduced to being only a worker is a robot. How well the epic would have served Karl Marx, who could have easily used it as a prehistoric example of the exploitation and alienation of the individual from his family and himself!11

Governing people reduced to human-robots has been the dream of tyrants from time immemorial. Every despotic ruler sees competition to effectiveness in family relations and friendships. The effort to reduce a person to a unit of production and consumption is also evident in social utopia or more accurately dystopias. For the economy as such needs nothing more than a human-robot, as has been beautifully—albeit painfully—shown in the model of homo economicus, which is a mere production and consumption unit.12 Here are some examples of this kind of utopia or dystopia: In his vision of an ideal state, Plato does not allow guardian families to raise their children; instead they hand them over to a specialized institution immediately after birth.13 This is similar to the dystopias in Aldous Huxley’s Brave New World and George Orwell’s 1984. In both novels, human relations and feelings (or any expressions of personality) are forbidden and strictly punished. Love is “unnecessary” and unproductive, as is friendship; both can be destructive to a totalitarian system (as can be seen well in the novel 1984). Friendship is unnecessary because individuals and society can live without it.14 As C. S. Lewis puts it, “Friendship is unnecessary, like philosophy, like art…. It has no survival value; rather it is one of those things that give value to survival.”15

To a large degree, today’s mainstream economics is somewhat close to such a concept. Models of neoclassical economics perceive labor as an input to a production function. But such an economy does not know how to build humanity (so human!) into its framework—but human-robots would fit it just fine. As Joseph Stiglitz says,

One of the great “tricks” (some say “insights”) of neoclassical economics is to treat labour like any other factor of production. Output is written as a function of inputs—steel, machines, and labour. The mathematics treats labour like any other commodity, lulling one into thinking of labour like an ordinary commodity, such as steel or plastic. But labour is unlike any other commodity. The work environment is of no concern for steel; we do not care about steel’s well-being.16

LET’S CHOP DOWN THE CEDARS But there exists something that is frequently confused with friendship, something society and the economy greatly need: Even the earliest cultures were aware of the value of cooperation on the working level—today we call this collegiality, fellowship, or, if you want to use a desecrated term, comradeship. These “lesser relationships” are useful and necessary for society and for companies because work can be done much faster and more effectively if people get along with each other on a human level and are mutually amenable. Teamwork is a promise of improved performance, and specialized companies are hired to do team-building.17

But true friendship, which becomes one of the central themes of the Epic of Gilgamesh, comes from completely different material than teamwork. Friendship, as C. S. Lewis accurately describes it, is completely uneconomical, unbiological, unnecessary for civilization, and an unneeded relationship (as opposed to erotic relationships or maternal love, which are necessary from a purely reproductive standpoint).18 But it is in friendship where—often by-the-way, as a side product, an externality—ideas and deeds are frequently performed or created that together can altogether change the face of society.19 Friendship can go against an ingrained system in places where an individual does not have the courage to do so himself or herself.

In the beginning, Gilgamesh considers friendship unnecessary and unproductive until he himself experiences it with Enkidu and discovers that it brings unexpected things. Here we have a beautiful example of the power of friendship, one that knows how to transform (or break down) a system and change a person. Enkidu, sent to Gilgamesh as a punishment from the gods, in the end becomes his faithful friend, and together they set out against the gods. Gilgamesh would never have gathered the courage to do something like that on his own—nor would

Enkidu. Their friendship helps them to hold their own in situations where either of them would not have succeeded alone. Mythic drama frequently contains a strong friendship bond—as religious scholars describe it, friends “are afraid and stimulate each other before the battle, seek solace in their dreams and are transfixed before the irreversibility of death.”20

Bound by the ties of friendship and shared intent, Gilgamesh forgets about the building of his protective wall (in doing so abandoning what used to be his greatest goal) and instead heads away from the city, beyond the safety of its walls, his civilization, his known ground (which he himself built). Into the wilds of the forest he goes and there he wants to correct the order of the world—to kill Humbaba, the personification of evil.

In the Forest of Cedar, where Humbaba dwells, Let us frighten him in his lair!(…) Let us slay him so that his power is no more!(…) Let me start out, I will cut down the cedar, I will establish for ever a name eternal!21

Let’s pause for a moment at the cutting of the cedars. Wood was a prized commodity in ancient Mesopotamia. Going out for this wood was very dangerous, and only the most courageous could do it. The danger of these expeditions is symbolized in the epic by the presence of Humbaba in the forest. “Humbaba was the guardian of the Cedar Forest, placed there by Enlil to deter would-be intruders seeking the valuable Timber.”22 In the epic, Gilgamesh’s courage is emphasized by his intention to cut down the cedar forest itself (and thus gain the great wealth, which is the hero’s right).

In addition, cedars were considered a holy tree, and cedar forests were the sanctuary of the god Shamash. Due to their friendship, Gilgamesh and Enkidu then intend to stand up to the gods themselves and turn a holy tree into mere (construction) material they can handle almost freely, thereby making it a part of the city-construct, part of the building material of civilization, thus “enslaving” that which originally was part of wild nature. This is a beautiful proto-example of the shifting of the borders between the sacred and profane (secular)—and to a certain extent also an early illustration of the idea that nature is there to provide cities and people with raw material and production resources.23 “The felling of cedars was usually considered a ‘cultural success’ because Uruk did not have wood for construction. Gilgamesh is considered to have procured this valuable material for his city in this way. This act can also be a portent of our ‘cultural successes,’ which turn living beings, not only trees, into raw materials, supplies, goods (…) The transformation of a cosmic tree into construction material is an example given to us by Gilgamesh and one which we have feverishly pursued.”24

Here we witness an important historical change: people feel more natural in an unnatural surrounding: the city. Among the Mesopotamians, it was the city that was the habitat of people; for Hebrews (as we will see later) it was still nature, as they originally were more of a nomadic tribe. It started with Babylonians—rural nature becomes just a supplier of raw materials, resources (and humans the source of human resources). Nature is not the garden in which humans were created and placed, which they should care for and which they should reside in, but becomes a mere reservoir for natural (re)sources.

The part of the epic mentioning Gilgamesh and Enkidu’s expedition to Humbaba also conceals another reason why Gilgamesh is celebrated—he is ascribed in legends with the discovery of several desert oases that eased traveling for traders in ancient Mesopotamia. “The discovery of various wells or oases that opened a passage across the desert from the middle Euphrates to Lebanon must have revolutionalized long-distance travel in upper Mesopotamia. If Gilgamesh was traditionally the first to make this journey on his expedition to the Cedar Forest, it would be logical for him to be given credit for the discovery of the techniques of survival that made desert travel possible.”25 Gilgamesh becomes a hero not only due to his strength, but also due to discoveries and deeds whose importance were in large part economic—direct gaining of construction materials in the case of felling the cedar forest, stopping Enkidu from devastating Uruk’s economy, and discovering new desert routes during his expeditions.

BETWEEN ANIMAL AND ROBOT: HUMAN The subjugation of wild nature was a bold act that Gilgamesh dared to try because of his friendship with Enkidu. But in the end, this revolt against the gods paradoxically served the gods’ original plan: Through his friendship with the feral Enkidu, Gilgamesh renounces the construction of the wall. At the same time, inadvertently and through his own experience, he confirms his theory—that human relations truly stand in the way of the construction of his famed wall. He then leaves it unfinished and, with his friend, heads out beyond it. No longer does he seek immortality in the construction of his wall but in heroic acts with his friend for life.

The friendship changes both friends. Gilgamesh changes from a cold and hated tyrant, who reduces men to robots, into a person with feelings. He leaves his sober pride behind the walls of Uruk and indulges in adventures in the wild with his animal spirits.26 Despite J. M. Keynes’s thinking of this term as a spontaneous impulse to action, he did not necessarily have our animality in mind; but perhaps we could in this context consider for a moment the animal parts of our (would-be rational-economic) personae. The animal essence of his friend, Enkidu, is transferred onto Gilgamesh (they head out from the city into nature, giving in to the call of uncertain adventure).

And Enkidu’s transformation? If Gilgamesh was a symbol for nearly godlike perfection, civilization, and a staid city tyrant who would rather see machines instead of his subjects, Enkidu originally represented something on the complete opposite pole. He is the personification of animality, unpredictability, indomitability, and wildness. His animalistic nature is also brought to mind physically: “All his body is matted with hair (…) the hair of his head grows thickly as barley.”27 In Enkidu’s case, friendship with Gilgamesh symbolizes the culmination of the process of becoming a human. Both heroes change—each from opposite poles—into humans.

In this context, a psychological dimension to the story may be useful: “Enkidu (…) is Gilgamesh’s alter ego, the dark, animal side of his soul, the complement to his restless heart. When Gilgamesh found Enkidu, he changed from a hated tyrant into the protector of his city. (…) Both titans are humanized by the experience of their friendship, and the half-god and half-animal become beings similar to us.”28 There seem to be two propensities in us, one economic, rational, seeking to be in control, maximizing, efficiency seeking, and so forth, and the other wild, animal-like, unpredictable, and brute. To be human seems to be somewhere in between, or both of these two. We shall come back to this topic in the second part of the book.

DRINK THE BEER, AS IS THE CUSTOM OF THE LAND Now how did Enkidu become a part of the civilization, a human? At the beginning of Enkidu’s transformation from an animal into a civilized person, Gilgamesh sets a trap for him. The harlot Shamhat is told to “do for the man the work of a woman”29 and when Enkidu gets up after six days and seven nights of sex, nothing is as it was before.

When with her delights he was fully sated, he turned his gaze to his herd. The gazelles saw Enkidu, they started to run, the beasts of the field shield away from his presence. Enkidu has defiled his body so pure,30 his legs stood still, though his herd was in motion. Enkidu was weakened, could not run as before,31 but now he had reason, and wide understanding.32

Enkidu eventually loses his animal nature because “his herd will spurn him, though he grew up amongst it.”33 He is brought to the city, dressed, given bread and beer:

Eat the bread, Enkidu, essential to life, drink the ale, the lot of the land.34

With this, what happened is that he had “turned into a man.”35 Enkidu joined a (specialized) society that offered him something that nature in its uncultivated state was never capable of. He moved away from nature—he moved behind the city walls. Thus he became a human person. But this change is irrevocable. Enkidu cannot return to his previous life because “the beasts of the field shield away from his presence.”36 Nature will not allow a person back who has left her womb. “Nature, from where (a person) long ago came, remains outside, beyond the city walls. It will be foreign and rather unfriendly.”37

At this moment of rebirth from an animal to a human state, the world’s oldest preserved epic implicitly hints at something highly important. Here we see what early cultures considered the beginning of civilization. Here is depicted the difference between people and animals or, better, savages. Here the epic quietly describes birth, the awakening of a conscious, civilized human. We are witnesses to the emancipation of humanity from animals, similar to how a sculpture is brought forth from stone. From a state of individual satisfaction of his needs in a primary unmediated use of nature without any efforts to transform it, Enkidu moves to the city, the prototype of civilization and life in an artificial environment outside nature. “He will continue to live in a city, in a world created by people; he will live there richly, safely, and comfortably and will live on bread and beer, strange fare, which has been laboriosly prepared by human hands.”38

The entire history of culture is dominated by an effort to become as independent as possible from the whims of nature.39 The more developed a civilization is, the more an individual is protected from nature and natural influences and knows how to create around him a constant or controllable environment to his liking. Our menu is no longer dependent on harvests, the presence of wild game, or the seasons. We have managed to maintain a constant temperature inside our dwellings, regardless of whether there is piercing cold or burning summer.

We can also follow the first attempts at a desired constantization of the living environment in the Epic of Gilgamesh—and best in the example of the construction of a wall around Uruk, which will allow it to become a cradle of civilization.40 This constantization also pertains to human activity, human labor. Humans do better at one thing they specialize in, and if they can depend on the work of others for the rest of their needs, society grows rich. It has been a long time since every individual has had to make their own clothes and shoes; to hunt, plant, or prepare their own food; to find a source of drinking water and build a dwelling.41 These roles have been taken over by the institution of market specialization (which understandably functioned a long time before Adam Smith described it as one of the main sources of the wealth of nations42). Each therefore specializes in what they know to be most valuable to society, and the remaining vast majority of their needs are left to others.

The epic captures one of the greatest leaps in the development of the division of labor. Uruk itself is one of the oldest cities of all, and in the epic it reflects a historic step forward in specialization—in the direction of a new social city arrangement. Because of the city wall, people in the city can devote themselves to things other than worrying about their own safety, and they can continue to specialize more deeply. The permanence of a city surrounded by a wall brings is also noticeable. Human life in the city gains a new dimension and suddenly it seems more natural to take up issues going beyond the life span of an individual. “The city wall symbolizes as well as founds the permanence of the city as an institution which will remain forever and give its inhabitants the certainty of unlimited safety, allowing them to start investing with an outlook reaching far beyond the borders of individual life. The prosperity and riches of Uruk are supported by the certainty of its walls. Provincials can honestly be amazed, and possibly envy them.”43

From an economic standpoint, the creation of a fortified city brings important changes; aside from a deeper specialization for its inhabitants there is also “the possibility of crafts and trade, where one can become rich with the wave of a hand—and of course also become poor. The possibility of a livelihood for those who had no land, for younger sons, outcasts, speculators and adventurers from anywhere—from the entire world.”44

But everything has its price, and no lunch is free—not even the course of prosperity, which specialization has laid out for us. The price we pay for independence from the whims of nature is dependence on our societies and civilizations. The more sophisticated a given society is as a whole, the less its members are able to survive on their own as individuals, without society. The more specialized a society is, the greater the number of those on whom we are dependent.45 And so much so that it is existential.

Enkidu managed to survive in nature independently and without any kind of help, freely. Because Enkidu

knows not a people, nor even a country (…) with the gazelles he grazes on grasses, joining the throng with the game at the water-hole, his heart delighting with the beasts in the water.46

Enkidu is like an animal; he has no nation of his own and is a member of no land. Through his own acts he himself proves to take care of all his needs; he is without civilization, noncivilized. Again we see the principle of quid pro quo: Enkidu is self-sufficient (just as many animals are), and in return (or precisely because of this), his needs are minimal. Animal needs are negligible compared to humans’. On the other hand, people are not able to satisfy their needs even with the riches and technology of the twenty-first century. It can be said that Enkidu was therefore happy in his natural state, because all of his needs were satiated. On the other hand, with people, it appears that the more a person has, the more developed and richer, the greater the number of his needs (including the unsaturated ones). If a consumer buys something, theoretically it should rid him of one of his needs—and the aggregate of things they need should be decreased by one item. In reality, though, the aggregate of “I want to have” expands together with the growing aggregate of “I have.” Here it is appropriate to quote the economist George Stigler, who was aware of this human unsaturatedness. “The chief thing which the common-sense individual wants is not satisfactions for the wants he had, but more, and better wants.”47

A change in the external environment (a transition from nature to the city) in the Epic of Gilgamesh very closely relates to an internal change—the change of a savage into a civilized person. The wall around the city of Uruk is, among other things, a symbol of an internal distancing from nature, a symbol of revolts against submission to laws that do not come under the control of man and that man can at most discover and use to his benefit.

“The practical purpose of the wall in the outside world had its parallel in the interior of a person: The forming ego-consciousness also serves as a sort of protective wall which separates it from other psyches. Defensiveness is an important characteristic trait of the ego. And Gilgamesh also ushers in man’s isolation from the natural environment, both external and internal.”48 On the other hand, this isolation enables new, heretofore unrecognized forms of human development in relationship to the entire city society. “The expansion of human energies, the enlargement of the human ego (…) and differentiation at many points in the structure of the city were all aspects of a single transformation: The rise of civilization.”49

NATURAL NATURE When we talk about the city and nature, it is possible to take our thoughts in one more direction, one that will prove to be very useful, especially in comparison with later Hebrew and Christian thought. We consider the symbolism of nature as a natural state into which we are born and the city as a symbol of the exact opposite—development, civilization, the alteration of nature, and progress.

An unspoken message blows through the entire epic: Civilization and progress play out in the city, which is the true “natural” dwelling of the people. It seems from this perspective that it is not natural for us to be in the natural state of being. In the end, the city is the home not only of people but of gods as well:

Said Uta-napishti to him, to Gilgamesh: (…) The town of Shuruppak, a city well known to you, which stands on the banks of the river Euphrates: the city was old—the gods once were in it— when the great gods decided to send down the Deluge.50

It is animals that live in nature, and the savage Enkidu rages there. Nature is where one goes to hunt, collect crops, or gather the harvest. It is perceived as the saturator of our needs and nothing more. One goes back to the city to sleep and be “human.” On the contrary, evil resides in nature. Humbaba lives in the cedar forest, which also happens to be the reason to completely eradicate it. The wild Enkidu lives in nature; he looks like a human, but in his naturalness he is an animal—he does not live in the city, is uncontrollable,51 and does damage. It is necessary to separate the city, as a symbol of people, civilization, nonnature, from its surroundings with a strong wall. Enkidu becomes a human by moving to the city.

The natural state of things, as at birth, is accordingly imperfect in the epic, evil. Our nature has to be transformed, civilized, cultured, fought against. Symbolically, then, we can view the entire issue from the standpoint of the epic in the following way: Our nature is insufficient, bad, evil, and good (humane) occurs only after emancipation from nature (from naturalness), through culturing and education. Humanity is considered as being in civilization.

For fuller contrast, let us compare the duality of the city and nature with a later Hebrew thought. In the Old Testament, this relationship is perceived completely differently. Man (humanity) is created in nature, in a garden. Man was supposed to care for the Garden of Eden and live in harmony with nature and the animals. Soon after creation, man walks naked and is not ashamed, de facto the same as the animals. What is characteristic is that man dresses (the natural state of creation itself is not enough for him), and he (literally and figuratively) covers52 himself —in shame after the fall.53 Dressing, which stems from shame at his natural state, for his state at birth, for his nakedness, distinguishes people from animals and from their natural, at-birth state. When the prophets of the Old Testament later speak of a return to paradise, they are at the same time portraying it as harmony with nature:

The wolf will live with the lamb, the leopard will lie down with the goat. The calf and the lion and the yearling together; and a little child will lead them. The cow will feed with the bear, their young will lie down together, and the lion will eat straw like the ox. The infant will play near the hole of the cobra, and the young child put his hand into the viper’s nest.54

AND SINFUL CIVILIZATION? On the other hand, resistance to city civilization, to the sedentary way of life, can be found between the lines of many Old Testament stories. It is the “evil” farmer Cain (farming requiring a sedentary, city lifestyle) who kills the shepherd Abel (hunters and shepherds tended to be nomadic and did not found cities; their way of life on the contrary required constant motion from one hunting ground or pasture to the next). A similar dimension is in the

background of the story of the staidly living Jacob, who fools, tricks55 his brother Esau,56 depriving him of his father’s blessing in his own favor.

The city was frequently (at least in older Jewish writings) a symbol of sin, degeneration, and decadence— nonhumanity. The Hebrews were originally a nomadic nation, one that avoided cities. It is no accident that the first important city57 mentioned in the Bible is proud Babylon,58 which God later turns to dust. When the pasture gets too small for Abraham and Lot, Lot chooses the city as his future (Sodom and Gomorrah), and Abraham goes further into the desert to lead a nomadic life. It is not necessary to recall the degeneration of these two cities—everyone knows.

The Old Testament uses poetry that elevates nature. We find nothing of the sort in the Epic of Gilgamesh. The Old Testament Song of Solomon describes the lovers’ state with natural symbolism. It is no accident that all of the lovers’ positive moments play out in nature, outside the city, in a vineyard, in a garden. But unpleasant events take place in the city: A guard beats and humiliates his lover; the lovers cannot find each other in the city. But in nature, in the vineyard, in the garden (reminding us of the original Garden of creation) it is safe and the lovers are together again, uninterrupted, as they wish.

In short, nature and naturalness had a rather positive value for the Hebrews, while city civilization was negative. God’s original “altar” traveled, and when established was “only” placed in a tent (hence the term “the Lord’s Tabernacle ”). It is as if civilization could only spoil mankind—the closer it holds to nature, the more human it is. Here humans’ natural state, their naturalness, needs no civilization to be good or human. As opposed to the Epic of Gilgamesh, it appears that for the Hebrews, evil is rather found inside the city walls and in civilization.

This view of naturalness and civilization had and continues to have a complicated development in the history of Jewish culture and our own. The Hebrews later also chose a king (despite the unanimous opposition of God’s prophets) and settled in cities, where they eventually founded the Lord’s Tabernacle and built a temple for Him. The city of Jerusalem later gained an illustrious position in all of religion. The city (the home of the Temple) holds an important position in Hebrew thought as well. Later development is even more inclined toward the city model, which is already evident in early Christianity. It is enough, for example, to read the Book of Revelation to see how the vision of paradise developed from the deep Old Testament period, when paradise was a garden. John describes his vision of heaven as a city—paradise is in New Jerusalem, a city where the dimensions of the walls(!) are described in detail, as are the golden streets and gates of pearl. While the tree of life is located here, with a river flowing from it, there is no other mention of nature in the last book of the Bible.

But even this tableau perfectly describes the transformation of man’s perception and his naturalness that was playing out at the time. That is to say that by this time Christianity (as well as the influence of the Greeks) does not consider human naturalness to be an unambiguous good, and it does not have such an idyllic relationship to nature as the Old Testament prophets.

How does this affect economics? More than we would want to surmise. If we were to look at human naturalness as a good, then collective social actions need a much weaker ruling hand. If people themselves have a natural tendency (propensity) toward good, this role does not have to be supplied by the state, ruler, or, if you wish, Leviathan.59 But on the contrary, if we accept Hobbes’s vision of human nature as a state of constant latent violence and wars of everyone against everything, homo homini lupus, where man is dog eat dog (animal!) to his fellow man, then it is necessary to civilize man (and turn wolves into people) with a ruler’s strong hand. If a tendency toward good is not naturally endowed in people, it must be imputed from above through violence or at least the threat of violence. For in a “natural state” there is “no culture of the earth … no knowledge of the face of the earth,” and life is “solitary, poor, nasty, brutish, and short.”60 On the contrary, economic policy can be much freer if the ruler believes in human nature, which has in itself a tendency toward good and that this good only needs to be cared for, guided in coordination, and supported.

From the standpoint of the development of economic thought, it is interesting to note additional differences between the Old Testament and the Epic of Gilgamesh, even in seemingly similar stories. The epic, for example, mentions a great flood several times, which is strikingly similar to the biblical flood.

For six days and seven nights, there blew the wind, the downpour, the gale, the Deluge, it flattened the land. But the seventh day when it came, The gale relented, the Deluge ended. The ocean grew calm, that had thrashed like a woman in labour, The tempest grew still, the Deluge ended. I looked at the weather, it was quiet and still,

But all people had turned to clay. The flood plain was flat like the roof of a house.61

In the Epic of Gilgamesh, the flood occurred long before the main story itself. Only Utanapishti survived— because he built a ship that saved everything living.

All the silver I owned I loaded aboard, all the gold I owned I loaded aboard, all the living creatures I had I loaded aboard, I sent on board all my kith and kin, The beasts of the field, the creatures of the wild, and members of every skill and craft.62

Unlike Noah, Utanapishti loads silver and gold first, things that are not mentioned in the biblical story at all. If in Gilgamesh the city acts as a place of protection against the “evil beyond the walls,” its primary and positive relationship to wealth is logical. It is in cities that riches are concentrated. In the end, even Gilgamesh gained part of his fame by killing Humbaba—an act in which he came into riches in the form of wood from the felled cedars.

HARNESSING WILD EVIL AND THE INVISIBLE HAND OF THE MARKET Let us return for the last time to the humanization of the wild Enkidu, which is a process we can perceive with a bit of imagination as the first seed of the principle of the market’s invisible hand, and therefore the parallels with one of the central schematics of economic thinking.

Enkidu used to be an invincible terror to all hunters. He destroyed their plans and stood in the way of hunting and cultivating nature. In the words of one of the affected hunters:

I am afraid and I dare not approach him. He fills the pits that I myself dig, he pulls up the snares that I lay. He sets free from my grasp all the beasts of the field, he stops me doing the work of the wild.63

Nevertheless, after his humanization and civilization, a turnaround occurs:

When at night the shepherds lay sleeping, he struck down wolves, he chased off lions. Sleeping lay the senior shepherds, Their shepherd boy Enkidu, a man wide awake.64

By culturing and “domesticating” Enkidu, humanity tamed the uncontrollable wild and chaotic evil that had previously vehemently caused damage and did everything to work against the good of the city. Enkidu devastated the doings (the external, outside-the-walls) of the city. But he was later harnessed and fights at the side of civilization against nature, naturalness, the natural state of things. This moment has an interpretation that could be very important for economists. Enkidu caused damage and it was impossible to fight against him. But with the help of a trap, trick, this evil was transformed into something that greatly benefited civilization.

We understandably mean the image of the bad human inborn natural traits (for example, egoism, placing one’s interests before those of one’s neighbors). Enkidu cannot be defeated, but it is possible to use him in the service of good. A similar motif appears a thousand years after the reversal, which is well known even to noneconomists as the central idea of economics: the invisible hand of the market. Sometimes it is better to “harness the devil to the plow” than to fight with him. Instead of summoning up enormous energy in the fight against evil, it is better to use its own energy to reach a goal we desire; setting up a mill on the turbulent river instead of futile efforts to remove the current. This is also how Saint Prokop approached it in one of the oldest Czech legends.65 When he was clearing a forest(!) and tilled the land gained in this way (how nature was civilized at the time), the legend tells that neighboring people caught sight of a plow with a devil harnessed to it.66 Prokop, it seems, knew how to handle something dangerous, something that people fear. He understood well that it is wiser and more advantageous to appropriately make use of natural chaotic forces than to futilely try to suppress, exclude, and destroy them. He knew to a certain extent the “curse” of evil, which the devil Mephistopheles gives away in Goethe’s play Faust:

Part of that force which would Do evil evermore, and yet creates the good.67

In his book The Spirit of Democratic Capitalism, the economist Michael Novak deals with the problem of transforming evil into a creative force.68 He argues that only democratic capitalism, as opposed to all alternative— frequently utopian—systems, understood how deeply evil nature is rooted in the human soul, and realized that it is beyond any system to uproot this deeply embedded “sin.” The system of democratic capitalism can “bring down the power of sin—i.e., to retransform its energy into creative force (and in doing so the best way to get revenge on Satan).”69

A similar story (reforming something animally wild and uncultivated in civilizational achievement) is used by Thomas Aquinas in his teachings. Several centuries later, this idea is fully emancipated in the hands of Bernard Mandeville and his Fable of the Bees: or, Private Vices, Publick Benefits. The economic and political aspects of this idea are—often incorrectly—ascribed to Adam Smith. The idea that later made him famous speaks of the societal good that comes from the butcher’s egoism, yearning for earnings, and his own profit.70 Of course, Smith takes a much more sophisticated and critical stand than is generally taught and believed today. We will also get to this later.

At this place, please allow a minor observation. Only the saint in the story of Prokop had the transformative power to harness evil and recast it, to force it to serve the general welfare.71 In this day and age that quality is ascribed to the invisible hand of the market. In the story of Gilgamesh, the harlot was able to recast wild evil into something useful.72 It appears that the invisible hand of the market is endowed with the historical heritage of moving in the dimensions of these two extremes—the saint and the harlot.

IN SEARCH OF THE BLISS POINT73

With his divine origin, Gilgamesh was predestined to something great. His efforts at finding immortality serve as a red thread through the entire epic.74 This ancient goal par excellence, which only heroes previously dared attempt,75 takes several different forms in the epic.

First, Gilgamesh tries to secure his immortal name in a relatively uninteresting way—building a wall around the city of Uruk. In the second stage, after finding his friend Enkidu, Gilgamesh abandons the wall and sets out beyond the city to maximalize heroism. “In his (…) search of immortal life, Gilgamesh went through the most extraordinary hardships and performed superhuman feats.”76 Here the individual does not try anymore to maximize his goods or profits, but what is important is writing his name in human memory in the form of heroic acts or deeds. The utility consumption function replaces the dimension of the maximization of adventure and renown. Such a concept of immortality is very closely tied to the creation of letters (the story must be recorded for the next generation), and Gilgamesh was the very first to attempt such immortality in the form of a written record of “immortal” fame— anyway the first to succeed. “His famous name introduces a new concept of immortality, one connected with letters and the cult of the word: A name and especially a written name survives the body.”77

We also get, of course, to classical economic maximization of profit later in the epic. Gilgamesh’s journey in the end is not as successful as the hero imagined. His lifelong friend Enkidu dies before him, and for the first time he hears the sentence that for the rest of the epic will serve as an echo of the futility of his deeds: “O Gilgamesh, where are you wandering? The life you seek you never will find.”78 After this disappointment, he comes to the edge of the sea, where the innkeeper Siduri lives. As tonic for his sorrow, she offers him the garden of bliss, a sort of hedonistic fortress of carpe diem, where a person comes to terms with his mortality and at least in the course of the end of his life maximizes earthly pleasures, or earthly utility.

Gilgamesh, wherefore do you wander? The eternal life you are seeking you shall not find. When the gods created mankind, They established death for mankind, And withheld eternal life for themselves. As for you, Gilgamesh, let your stomach be full, Always be happy, night and day. Make every day a delight, Night and day play and dance. Your clothes should be clean, Your head should be washed,

You should bathe in water, Look proudly on the little holding your hand, Let your mate be always blissful in your loins, This, then, is the work of mankind.79

How does Gilgamesh respond to this offer, to this modern consumer-pleasure maxim? Surprisingly, he refuses her (“Gilgamesh said to her, to the tavern keeper: What are you saying, tavern keeper?”80) and sees in her only delays, obstacles in his path in search of Utanapishti, the only person to survive the great flood and in whom Gilgamesh sees the promise of finding the cure for mortality. The hero refuses hedonism in the sense of maximizing terrestrial pleasure and throws himself into things that will exceed his life. In the blink of an eye, the epic turns on its head the entire utility maximization role that mainstream economics has tirelessly tried to sew on people as a part of their nature.81

After finding Utanapishti, Gilgamesh gets from the seafloor his coveted plant, one that should give him youth forever. But he immediately falls asleep and loses the plant: “Exhausted by his great deeds, Gilgamesh cannot resist the most gentle and most unspectacular thing: He gives in to sleep, the brother of death, the creeping exhaustion which accompanies life as tiredness and aging.”82

Of the plant’s fragrance a snake caught scent, came up in silence, and bore the plant off. As it turned away it sloughed its skin.83

And in the eleventh and final tablet, Gilgamesh again loses what he sought. Like Sisyphus, he misses his goal just before the climax and does not find his notional bliss point. But in the end, Gilgamesh nevertheless becomes immortal—to this day his name is not forgotten. And regardless of whether chance played any kind of major role in this historical development of events, we today remember Gilgamesh for his story of heroic friendship with Enkidu, not for his wall, which no longer reaches monumental heights.

CONCLUSION: THE BEDROCK OF ECONOMIC QUESTIONING In this first chapter we have attempted the first economic contemplation of our civilization’s oldest text. I allowed myself to do so in the hope that through this ancient epic we would discover something about ourselves, about the society that has developed over five thousand years into an incredibly complicated organism and entanglement. Orienting oneself in today’s society is now naturally much more complicated. It is simpler to observe the main features of our civilization at a time when the picture was more readable—at a time when our civilization was just being born and was still “half-naked.” In other words, we have tried to dig down to the bedrock of our written civilization; under this, nothing else exists.

Was the study of the epic useful? Has it shown something about itself in an economic sense? And is there something from it that is valid today? Have we found in Gilgamesh certain archetypes that are in us to this day?

I have tried to show that the mystical relationship to the world also has its “truths.” Today we take these truths reservedly and tolerantly put them inside quotation marks, but we must be aware that the next generations will just as unhumbly put today’s truths into quotation marks as well. In ancient times people answered questions with stories, tales. In the end, the Greek word “myth” means “story.” “A myth is every story that anticipates some kind of ‘why.’”84 We will soon return in this book to the question of to what extent mythical storytelling differs from the mathematical or the scientific.

The very existence of questions similar to today’s economic ones can be considered as the first observation. The first written considerations of the people of that time were not so different from those today. In other words: The epic is understandable for us, and we can identify with it. Sometimes too much—for example, as far as efforts to turn people into robots go. The thought that the human in us is only a drag on work (on the wall)85 is still with us. Economics frequently uses this and tries to neglect everything human. The thought that humanity comes at the expense of efficiency is just as old as humanity itself—as we have shown, subjects without emotion are the ideal of many tyrants.

We have also been witnesses to the very beginnings of man’s culturing—a great drama based on a liberation and then a distancing from the natural state. Gilgamesh had a wall built that divided the city from wild nature and created a space for the first human culture. Nevertheless, “not even far-reaching works of civilization could satisfy human desire.”86 Let us take this as a memento in the direction of our restlessness, our inherited dissatisfaction and the volatility connected to it. Considering that they have lasted five thousand years and to this day we find ourselves

in harmony with a certain feeling of futility, perhaps these characteristics are inherent in man. Maybe we feel it even stronger and more burning than Gilgamesh or the author of the epic himself.

The epic later crashes this idea through the friendship of Gilgamesh and Enkidu. Friendship—the biologically least essential love, which at first sight appears to be unnecessary from a societal standpoint as well. For effective economic production, for the welfare of the society, it’s enough to become a member of a team without major emotional engagement. Of course, to change the system, to break down that which is standing and go on an expedition against the gods (to awaken, from naïveté to awakening) requires friendship. For small acts (hunting together, work in a factory), small love is enough: Camaraderie. For great acts, however, great love is necessary, real love: Friendship. Friendship that eludes the economic understanding of quid pro quo. Friendship gives. One friend gives (fully) for the other. That is friendship for life and death, never for profit and personal gain. Friendship shows us new, unsuspected adventures, gives us the opportunity to leave the wall and to become neither its builder nor its part—to not be another brick in the wall.

In another sense, the relationship between Gilgamesh and Enkidu can be compared to the civilized and animal essence of man (Enkidu later dies, but in a certain sense he lives on in Gilgamesh). We shortly paused on Keynes’s notion of “animal spirits,” which lead uneconomically and frequently irrationally to adventures: The builder Gilgamesh—he who separates humanity from its primitive animal state and brings about the civilized (one wants to say “sterile”) culture, the one hidden behind the walls and a careful ruler—becomes friends with the wild Enkidu and heads out to subjugate heretofore untouched nature.

At the same time, with the phenomenon of the creation of the city, we have seen how specialization and the accumulation of wealth was born, how holy nature was transformed into a secular supplier of resources, and also how humans’ individualistic ego was emancipated. This moment, of course, paradoxically relates to an increase in the individual’s dependence on other members of society, even if a civilized person feels more independent. The less a civilized, city person is dependent on nature, the more he or she is dependent on the rest of society. Like Enkidu, we have exchanged nature for society; harmony with (incalculable) nature for harmony with (incalculable) man.

We have compared this view with the view of the Hebrews, to whom we will devote ourselves in greater detail in the next chapter. The Hebrews came to cities much later, and an essential part of the Old Testament describes a people who lived in greater harmony with nature. Which, then, is more natural? Is man a naturally (full) man in his natural state, or does he become so in the framework of a (city) civilization? Is human nature good or evil? To this day these questions are key for economic policy: If we believe that man is evil in his nature, therefore that a person himself is dog eat dog (animal), then the hard hand of a ruler is called for. If we believe that people in and of themselves, in their nature, gravitate toward good, then it is possible to loosen up the reins and live in a society that is more laissez-faire.

Finally we have shown that the principle that a thousand years later materialized as the economic idea of the “invisible hand of the market” had its predecessors as early as Gilgamesh, in the form of harnessing wild evil, which in the end served to benefit humanity. We can find a whole range of predecessors of the invisible hand of the market in our ties. Finally, at the end of the chapter, a sort of pre-Greek hedonism got its word, in the form of the offer by the innkeeper Siduri. Gilgamesh rejects this offer, only for this thinking to be fully embraced by the economic ethos some 4,500 years later at the hands of utilitarians.

The end of the epic finishes at a dismal cyclical note, where nothing has changed, no progress was made, and— after a small adventure—everything returns to its original setting; the epic is cyclical and ends where it started, with the building of the wall. History heads nowhere, and everything cyclically repeats itself with minor variations, as we see in nature (the repeating of the seasons, cycles of the moon, etc.). In addition, nature, which has surrounded people, is the embodiment of unpredictable deities who have the same weaknesses and vagaries as people (according to the epic, the flood was called for by the gods because people were making too much noise, which bothered the deities). Because nature is not undeified, it is beyond consideration to explore it, let alone intervene in it (unless a person was a two-thirds god like Gilgamesh). It is not safe to investigate the preserves of capricious and moody gods.

For a concept of historical progress, for the undeification of heroes, rulers, and nature, mankind had to wait for the Hebrews. The entire history of Judaism is the history of waiting for the Messiah, who is to come in historical time, or rather at its end.

2 The Old Testament Earthliness and Goodness

Let me avow it right away: I think that the Jewish religion has the same leading ideas as Capitalism.

I see the same spirit in the one as in the other. Werner Sombart

Although the Jews of the Old Testament1 played a key role in forming today’s Euro-American culture and economic systems, not much space has been devoted to them in either the leading textbooks of economic ideas or other economic texts.2 Max Weber believed that we owe the birth of capitalism to Protestant ethics;3 Michael Novak, on the other hand, emphasizes the influence of Catholic morals and perception of humans;4 nevertheless, according to Sombart,5 it is the Jewish faith that is behind the birth of capitalism.

However, all of the leading lights in this discussion admit the important role Jewish culture has played. In no way may we doubt the important contribution of Jewish thought and its role in the development of modern capitalist economics.6 For this reason, there is no way the Old Testament could be absent from our exploration of prescientific economic viewpoints—not only because Christianity is built on it, which later had an important influence on the formation of capitalism and economic teachings, but also for its distinctive contribution to a change in the perception of economic anthropology and ethos.

In many areas, Jewish economic habits anticipate the development of modern economics. As early as the “dark” ages, the Jews commonly used economic tools that were in many ways ahead of their time and that later became key elements of the modern economy:

They practiced money lending, traded in many assets (…) and especially were engaged in the trading of shares on capital markets, worked in currency exchange and frequently figured as mediators in financial transactions (…), they functioned as bankers and participated in emissions of all possible forms. As regards modern capitalism (as opposed to the ancient and medieval periods) … there are activities in it which are, in certain forms, inherently (and completely necessarily) present—both from an economic and legal standpoint.7

Even those who attack Jewish traditions usually speak about these aspects. As Niall Ferguson notes, “Marx himself wrote a review article ‘On the Jewish Question,’ which identified the capitalist, regardless of his religion, as ‘the real Jew.’”8 Even according to Heinrich Class, one of the prewar instigators of racist propaganda,9 the Jews were “a people born to trade in money and goods.”10 How did this development come about? For a nation originally based on nomadism, where did this Jewish business ethos come from? And can the Hebrews truly be considered as the architects of the values that set the direction of our civilization’s economic thought?

PROGRESS: A SECULARIZED RELIGION One of the things the writers of the Old Testament gave to mankind is the idea and notion of progress. The Old Testament stories have their development; they change the history of the Jewish nation and tie in to each other. The Jewish understanding of time is linear—it has a beginning and an end. The Jews believe in historical progress, and that progress is in this world. This progress is to be climaxed by the arrival of the Messiah, who frequently in chiliastic notions will even take on a specific political role.11 Hebrew religiosity is therefore strongly connected with this world, not with any abstract world, and those who take pleasure in worldly possessions are not a priori doing anything wrong.

The observance of God’s Commandments in Judaism leads not to some ethereal other world, but to an abundance of material goods (Genesis 49:25–26, Leviticus 26:3–13, Deuteronomy 28:1–13) (…) There are no accusing fingers pointed at those engaged in normal economic activities for the earning of material goods. There are no echoes of asceticism nor for the cleansing and spiritual effect of poverty. It is fitting therefore, that the founders of Judaism, the Patriarchs Abraham, Isaac and Jacob, were all wealthy men.12

Before this linear understanding of time, a cyclical-Sisyphean perception held rule. In the Epic of Gilgamesh, history does not go in any direction. Everything is a cyclical repetition with minor variations, as we see in nature (the repetition of seasons, life and death, the cycle of the weeks, months, etc.). And stories take place in a strange time-loop: Gilgamesh’s story ends where it began. There is a consistency in this with Greek myths and fables: At the

end of the story, no progress occurs, no essential historic change; the story is set in indefinite time, something of a temporal limbo. It could play out anywhere and any number of times, because nothing has changed since its completion and everything returns to its old routine.13

The idea of progress,14 which would later become the moving force for the creation of science and the hope of our civilization in general, only came about due to a linear understanding of history. If history has a beginning as well as an end, and they are not the same point, then exploration suddenly makes sense in areas where the fruits are borne only in the next generation. Progress gains new meaning.

Our civilization, therefore, is especially indebted to the Hebrews for the idea of progress. In the course of history, however, the idea of progress itself underwent major changes, and today we perceive it very differently. As opposed to the original spiritual conceptions, today we perceive progress almost exclusively in an economic or scientific- technological sense.15 What’s more, economic progress has almost become an assumption of modern functional societies. We expect growth. We take it automatically. Today, if nothing “new” happens, if GDP does not grow (we say it stagnates) for several quarters, we consider it an anomaly. But this wasn’t always the case. As Keynes wrote almost a hundred years ago, strong growth and significant material progress have been with us only in the past three centuries:

From the earliest times of which we have record back, say, to two thousand years before Christ down to the beginning of the eighteenth century, there was no very great change in the standard of life of the average man living in the civilised centres of the earth. Ups and downs certainly. Visitations of plague, famine, and war. Golden intervals. But no progressive, violent change. Some periods perhaps 50 per cent better than others—at the utmost 100 per cent better—in the four thousand years which ended (say) in AD 1700 (…) At some epoch before the dawn of history—perhaps even in one of the comfortable intervals before the last ice age—there must have been an era of progress and invention comparable to that in which we live to-day. But through the greater part of recorded history there was nothing of the kind.16

After emancipating ourselves from a cyclical conception of time and after several centuries, humanity was not accustomed to a visible rise in the standard of living. We might supplement Keynes’s quote by saying that the furnishings of a typical household barely changed over those four thousand years. In this respect, a person who fell asleep in the time long before Christ and woke up in the seventeenth century would not necessarily have noted any major changes in the day-to-day material equipment. Now, however, we live in a time where waking up a generation later would mean absolute disorientation in operating common household equipment. Only since the period of scientific-technological revolution (and at a time when economics was born as an independent field) is material progress automatically assumed.

Despite the fact that Keynes expressed hope for the economic satisfaction of our needs most explicitly, a strong faith in the beneficial effect of material progress is professed by a majority of the key figures of economic thought of our time. This is why we must constantly grow, because we (deep down and often implicitly) believe that we are headed toward an (economic) paradise on Earth. Because care for the soul has today been replaced by care for external things, as the Czech philosopher Jan Patočka writes, economists have become key figures of great importance in our time (Kacířské eseje o filosofii dějin [Heretical Essays in the Philosophy of History]). They are expected to perform interpretations of reality, give prophetic services (macroeconomic forecasts), reshape reality (mitigate the impacts of the crisis, speed up growth), and, in the long run, provide leadership on the way to the Promised Land—paradise on Earth. Paul Samuelson, Milton Friedman, Gary Becker, Frank Knight, and many others have become passionate evangelizers of economic progress, used not only within their own country but also toward other cultures, globally. We will return to this topic more thoroughly in the latter part of the book.

REALISM AND ANTIASCETICISM Aside from ideas of progress, the Hebrews brought another very fundamental contribution to our culture: The desacralization of heroes, nature, and rulers. It could be said with some exaggeration that Jewish thought is the most grounded, most realistic school of thought of all those that have influenced our culture.17 An abstract world of ideas was unknown to the Jews. To this day it is still forbidden to even depict God, people, and animals in symbols, paintings, statues, and drawings. They were not permitted to create representative symbols and symbolic representations (in a way, models) of reality:

You saw no form of any kind the day the Lord spoke to you at Horeb out of the fire. Therefore watch yourselves very carefully, so that you do not become corrupt and make for yourselves an idol, an image of any shape,

whether formed like a man or woman, or like any animal on earth or any bird that flies in the air, or like any creature that moves along the ground or any fish in the waters below. And when you look up to the sky and see the sun, the moon, and the stars—all the heavenly array—do not be enticed into bowing down to them and worshiping things the Lord your God has apportioned to all the nations under heaven.18

As opposed to Christianity, the concept of an extraterrestrial paradise or heaven was not developed much in Hebrew thought.19 The paradise of the Israelites—Eden—was originally placed on Earth at a given place in Mesopotamia20 and at a given time, one which has measured the exact genealogy from Adam and Eve. Jews to this day calculate the years from the creation of the world. The concept of heaven is not elaborated at all, and in any case it is not used in (theological) argumentation. Even Voltaire writes: “It certain fact is, that in his public laws he [Moses] never so much as once made mention of a life to come, limiting all punishments and all rewards to the present life.”21

Directed and intentional asceticism was foreign to ancient Hebrew thought, as well disdain for anything material or physical, as would later happen under the influence of traditions built on the work of Socrates and Plato.22 This Greek ascetic tradition makes its way into Christianity later through the teachings of Paul of Tarsus and the neo- Platonist Augustine (354–430), who of course agreed with it only to a certain extent. (We will return to the Greek and medieval Christian scholars in relation to the topic of asceticism.)

Jewish groundedness (earthiness) was noted by Max Weber, who wrote that “Judaism is at least oriented to the world in the sense that it does not reject the world as such but it only rejects the prevailing social rank order in the world…. Judaism differs from Puritanism only in the relative (as always) absence of systematic asceticism…. The observance of the Jewish law has little to do with asceticism.”23 The Hebrews consider the world to be real—not just a shadow reflection of a better world somewhere in the cloud of ideas, something the usual interpretation of history ascribes to Plato. The soul does not struggle against the body and is not its prisoner, as Augustine would write later. On the contrary, the body and the material world—and therefore the economic world—is the creation of a good God. The land, the world, the body, and material reality are for Jews the paramount setting for divine history, the pinnacle of creation.

This idea is the conditio sine qua non of the development of economics, something of an utterly earthly making, and is thus warranted and justified, despite by itself not having a “spiritual dimension,” but serving the fulfillment of completely earthly needs and desires.24 Old Testament teachings rarely disdain wealth or sing the praises of poverty. It is in the New Testament that we find the austerity of radical contempt for riches—see for example the parable of Lazarus. But for Hebrews, when a person does well in the (economic) world, it is frequently understood as an expression of God’s favor. The economizing sociologist Sombart handles it accurately:

Look through Jewish literature, more especially through the Holy Writ and the Talmud, and you will find, it is true, a few passages wherein poverty is lauded as something higher and nobler than riches. But on the other hand you will come across hundreds of passages in which riches are called the blessing of the Lord, and only their misuse or their dangers warned against … in all of this nothing is said against riches; and never is it stated that they are abomination to the Lord.25

Together with the concept of earthiness, the Hebrews carried out other desacralizations. In the Old Testament teachings, heroes, rulers, and nature are all stripped of their deity. This all plays a major role for changes in economic considerations.

THE HERO AND HIS UNDEIFICATION: THE DREAM NEVER SLEEPS The concept of the hero is more important than it might appear. It may be the remote origin of Keynes’s animal spirits, or the desire to follow a kind of internal archetype that a given individual accepts as his own and that society values. Each of us probably has a sort of “hero within”—a kind of internal role-model, template, an example that we (knowingly or not) follow. It is very important what kind of archetype it is, because its role is dominantly irrational and changes depending on time and the given civilization. This internal animator of ours, our internal mover, this dream, never sleeps and it influences our behavior—including economic behavior—more than we want to realize.

First we perceive that the Old Testament has at its disposal a much more realistic archetype of hero than the surrounding civilizations. The Jewish “heroes,” as opposed to those in the Epic of Gilgamesh for example, or in Greek fables and legends, are more real and realistically, threedimensionally imaginable people. We already know the Sumerian idea of a hero, so let’s pause for a moment for the second culture that had a strong influence on the Jews—the Egyptians. The Jews spent several centuries there at the beginning of their history, leaving (probably)

sometime during the rule of the famous Ramses II.26 From the writings preserved (if anyone founded the tradition of bureaucrats and registrars, it was the Egyptians), we can roughly create a picture of what such a hero should look like in the imaginings of the time. The mythology of the hero-king was strongly developed in that period, which Claire Lalouette summarizes into these basic characteristics: Beauty (a perfect face, on which it is “pleasant to look upon,” but also “beauty,” expressed in the Egyptian word nefer, not only means aesthetics, but contains moral qualities as well),27 manliness and strength,28 knowledge and intelligence,29 wisdom and understanding, vigilance and performance, fame and renown (fame which overcomes enemies because “a thousand men would not be able to stand firmly in his presence”);30 the hero is a good shepherd (who takes care of his subordinates), is a copper-clad rampart, the shield of the land, and the defender of heroes. It is also necessary to point out that the Egyptian ruler, just as the Sumerian, was partly a god, or the son of a god.31

We find no similar demigods in the Torah, no musclemen heroes who are gifted with superhuman physical abilities and predestined to great things. The only exception was the “muscleman” Samson (but even he had his superhuman strength subject to divine discretion). The Torah’s heroes (if that term can be used at all) frequently make mistakes and their mistakes are carefully recorded in the Bible—maybe precisely so that none of them could be deified.32 We do not have to go far for examples. Noah gets so drunk he becomes a disgrace; Lot lets his own daughters seduce him in a similar state of drunkenness. Abraham lies and (repeatedly) tries to sell his wife as a concubine. Jacob defrauds his father Isaac and steals his brother Esau’s blessing of the firstborn. Moses murders an Egyptian. King David seduces the wife of his military commander and then has him killed. In his old age, King Solomon turns to pagan idols, and so on.33

Every society and era has its ideals, according to which we unconsciously behave; most are combined from things that have already been. Anthropology knows several archetypes of heroes. The Polish-born American anthropologist Paul Radin examined the myths of North American Indians and, for example, in his most influential book, The Trickster, he describes their four basic archetypes of heroes. The oldest was the so-called Trickster—a fraudster; then the culture bearer—Rabbit; the musclebound hero called Redhorn; and finally the most developed form of hero: the Twins. For example, Gilgamesh had the signs of all Radin’s archetypes at his disposal; the twin who complements him is Enkidu.34 To a certain extent it can be said that the Hebrews—and later Christianity—added another archetype, the archetype of the heroic Sufferer.35 Job was one of these, or in large part Isaiah (in Christianity the ideal is understandably personified by Jesus Christ, who projects his strength through weakness, his victory through loss, and his magnificence through humiliation on the cross. His role, it would seem, was to show the way and to suffer representatively). As we have seen from the list above, the Hebrew heroes correspond most to the Tricksters, the Culture Bearers, and the Twins. The divine muscleman, that dominant symbol we think of when we say hero, is absent here.

This is very important for democratic capitalism, because the Jewish heroic archetype lays the groundwork much better for the development of the later phenomenon of the hero, which better suits life as we know it today. “The heroes laid down their arms and set about trading to become wealthy.”36 And, as is well known, muscles are not necessary for trade, nor is beauty or being a half-hero. For the heroes who moved our civilization to where it is today, the heroic archetypes of the cunning trickster, culture bearer, and sufferer are rather more appropriate.

NATURE IS NOT SACRED

Aside from the undeification of heroes, the Old Testament strongly emphasizes the undeification of nature.37 Nature is God’s creation, which speaks of divinity but is not the domain of moody gods such as those we saw in the Epic of Gilgamesh.38 Undeification, however, does not mean a call to pillage or desecration; man was put here to take care of nature (see the story of the Garden of Eden or the symbolism of the naming of the animals). This protection and care of nature is also related to the idea of progress that we discussed at the beginning of the chapter. In the case of a linear perception of time, it is obviously an issue of legacy for generations to come. “Judaism views human economic development as positive, and nature is subservient to this. However (…), the growth will be of necessity limited. The needs of future generations will have to be considered; after all humankind are the guardians of God’s world. Waste of natural resources, whether privately owned or nationally owned is forbidden.”39

RULERS ARE MERE MEN In a similar historical context, the Old Testament teachings carried out a similar desacralization of rulers, the so- called bearers of economic policy. God called on the Jews, through Moses, to rise up against the pharaoh—

something unheard at the time. The ruler was equal to a god or, at worst, a god’s son—ultimately in a similar sense as Gilgamesh, ruler of the Uruk, was two-thirds god. But in an Old Testament context, the pharaoh was a mere man (whom one could disagree with, and who could be resisted!).

Even the later Israelite kings were constantly reminded by the prophets that they were not omnipotent; they were not equal to God, but His subordinates. Ultimately the entire idea of a political ruler stood against the Lord’s will, which is explicitly presented in the Torah. The Lord unequivocally preferred the judge as the highest form of rule— an institution that is capable of arbitrating, but will not explicitly rule in the modern sense of the term of executive power.40 The rule of kings was almost literally stamped out of the land by the Jews, and it was to be regarded in this sense by later readers of Torah. This was not, therefore, about a divine institution; being king was a completely earthly affair. Since then humility has been in effect for rulers as one of the most essential virtues. King David, the most important of the Israelite kings, writes in Psalm 147, which is attributed to him, “The Lord sustains the humble but casts the wicked to the ground.”41 Politics lost its character of divine infallibility, and political issues were subject to questioning. Economic policy could become a subject of examination.

The entire institution of kingly reign is therefore in the Old Testament something that is not recommended, and is even warned against. Before the Israelites elected (drew lots for) their kings, “rule” in Israel was carried out by judges who had far less executive authority than kings had. In the following citation, the Hebrew Lord warns people through the prophet Samuel not to institute a king above them:

He said: “This is what the king who will reign over you will do: He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots. He will take your daughters to be perfumers and cooks and bakers. He will take the best of your fields and vineyards and olive groves and give them to his attendants. He will take a tenth of your grain and of your vintage and give it to his officials and attendants. Your menservants and maidservants and the best of your cattle and donkeys he will take for his own use. He will take a tenth of your flocks, and you yourselves will become his slaves. When that day comes, you will cry out for relief from the king you have chosen, and the Lord will not answer you in that day.” But the people refused to listen to Samuel. “No!” they said. “We want a king over us.”42

So, even without blessing, the institution of the ruler as a bearer of executive power was born in Israel. From the very beginning, when God distances Himself from the entire idea, there is an anticipation that there is nothing holy, let alone divine, in politics. Rulers make mistakes, and it is possible to subject them to tough criticism—which frequently occurs indiscriminately through the prophets in the Old Testament.

THE PRAISE OF ORDER AND WISDOM: MAN AS A PERFECTER OF CREATION The created world has an order of sorts, an order recognizable by us as people, which for the methodology of science and economics is very important because disorder and chaos are difficult to examine scientifically.43 Faith in some kind of rational and logical order in a system (society, the economy) is a silent assumption of any (economic) examination.

At the beginning of creation, it would appear, this was not the case—everything was, in the true meaning of the word, only one formless and colorless mass; nothing had a name or marking, and everything melted into one.44 God first creates with the word and then on individual days He divides light from darkness, water from dry land, day from night, and so forth—and He gives order to things.45 The world is created orderly— it is wisely, reasonably put together. The way of the world is put together at least partially46 decipherably by any other wise and reasonable being who honors rational rules. The principles governing the world can be examined. The Book of Proverbs emphasizes specifically several times that it was wisdom that was present at the creation of the world. Wisdom personified calls out:

The Lord brought me forth as the first of his works, before his deeds of old. I was appointed from eternity, from the beginning, before the world began. When there were no oceans, I was given birth, when there were no springs abounding with water, before the mountains were settled in place, before the hills, I was given birth, before he made the earth or its fields or any of the dust of the world. I was there when he set heavens in place, when he marked out the horizon on the face of the deep (…) Then I was the craftsman at his side.47

The citation above continues:

I was filled with delight day after day, rejoicing always in his presence (…) and delighting in mankind. Now then, my sons, listen to me; blessed are those who keep my ways (…) Blessed is the man who listens to me, watching daily at my doors, waiting at my doorway. For whoever finds me finds life and receives favor from the Lord. But whoever fails to find me harms himself; all who hate me love death.48

God, and Wisdom with Him, therefore urge us toward learning the order of the world. The world is not entirely incomprehensible to us. And especially, examination is not forbidden. The fact that order can be grasped by human reason is another unspoken assumption that serves as a cornerstone of any scientific examination. There are more urgings to gain wisdom in the Old Testament. “Wisdom calls aloud in the street (…): ‘How long will you simple ones love your simple ways?’”49 Or several chapters later: “Wisdom is supreme; therefore get wisdom. Though it cost all you have, get understanding.”50

Examining the world is therefore an absolutely legitimate activity, and one that is even requested by God—it is a kind of participation in the Creator’s work.51 Man is called on to understand himself and his surroundings and to use his knowledge for good. Nature exists for man, and the possibility opens up to explore and change it, something that man is called on, if not directly created, to do.

Hebrew culture laid the foundations for the scientific examination of the world. It is worth noticing that the rational examination of nature has its roots, surprisingly, in religion. While this world will always hold many mysteries that will never be solved by reason alone, we are set in a world that we can try to understand with a combination of intuition, reason, experience, and so forth.

MAN AS A FINISHER OF CREATION The creation of the world, as it is explained in Jewish teachings, is described in the Book of Genesis. Here God (i) creates, (ii) separates, and (iii) names [my emphasis]:

In the beginning God created the heavens and the earth (…) he separated the light from the darkness. God called the light “day,” and the darkness he called “night.” (…) God made the expanse and separated the water under the expanse from the water above it. And it was so. He called the expanse “sky.”(…) God called the dry ground “land,” and the gathered waters he called “seas.”52

Without naming, reality does not exist; it is created together with language. Wittgenstein tightly names this in his tractatus—the limits of our language are the limits of our world.53 Also, we cannot think of something that does not have a representative symbol in our mind (such as a name, sign, etc.). What we do not know how to consider we cannot rightfully name54 and vice versa.

The Naming itself (the capital N is appropriate) traditionally belongs to the crowning act of the Creator and represents a kind of grand finale of creation, the last move of the brush to complete the picture—a signature of the master. A noteworthy moment occurs in Genesis: The last act, final stroke of the brush of creation, naming of the animals—this act is given to a human, it is not done by God, as one would expect. Man was given the task of completing the act of creation that the Lord began:

[T]he Lord God had formed out of the ground all the beasts of the field and all the birds of the air. He brought them to the man to see what he would name them; and whatever the man called each living creature, that was its name. So the man gave names to all the livestock, the birds of the air and all the beasts of the field.55

A single paragraph speaks of the naming and designating four times. God hands over His creation to man in a somewhat incomplete state (one could almost say as a semifinished product) and leaves man to put on the finishing touches and thus to complete the creation. Naming is a symbolic expression. In Jewish culture (and also in our culture to this day), the right to name meant sovereign rights and belonged, for example, to explorers (new places), inventors (new principles), or parents (children)—that is, to those who were there at the genesis, at the origin. This right was handed over by God to mankind. The motif of putting on the finishing touches can also be seen in the notion of the garden, a place a person is supposed to cultivate, or to bring to perfection. Man was placed into a garden, not a jungle, forest or meadow. Gardens need constant care and cultivation; forests and meadows are fine even when left alone.56

How does this relate to economics? Reality itself, our “objective” world, is cocreated, man himself participates in the creation; creation, which is somewhat constantly being re-created.

Reality is not a given; it is not passive. Perceiving reality and “facts” requires man’s active participation. It is man

who must take the last step, an act (and we perceive the noteworthy proximity of fact and act) so that reality may continue to be created. A real-ization act on our part represents the creation of a construct, the imputation of sense and order (which is beautifully expressed by the biblical act of naming, or categorization, sorting, ordering). Our scientific models put the finishing touches on reality, because (1) they interpret, (2) they give phenomena a name, (3) they enable us to classify the world and phenomena according to logical forms, and (4) through these models we de facto perceive reality. Through this order (imputed by us), reality begins to truly appear; it loses sense without it. And as the leading Czech philosopher Neubauer puts it: “And that which makes no sense does not appear at all.”57

Through his theories, man not only discovers the world but also forms it. Not only in the sense of remolding nature (increasing efficiency or fertility through plowing fields, breeding plants, building dikes), but also in a deeper ontological meaning. When man finds a new linguistic framework or analytical model, or stops using the old one, he molds or remolds reality. Models are only in our heads; they are not “in objective reality.” In this sense, Newton invented (not merely discovered!) gravity.58 He invented (fictitiously and completely abstractly!) a framework that was generally accepted and soon “made into” reality. Marx invented similarly; he created the notion of class exploitation. Through his idea, the perception of history and reality was changed for a large part of the world for nearly an entire century.

Now we are getting to a purely economic topic. Let’s return to putting the finishing touches on reality in the simpler (nonmodel) sense of the term. John Locke deals with this in an interesting fashion, when he deals with the “value added” of human labor and care:

For the provisions serving to the support of human life, produced by one acre of enclosed and cultivated land, are (to speak much within compass) ten times more than those which are yielded by an acre of land an equal richness lying waste in common…. I have here rated the improved land very low, in making its product but as ten to one, when it is much nearer an hundred to one.59

Michael Novak even speaks of raw creation,60 or the creation of a kind of “natural state,” which remains left alone and unrefined by man in “the sweat of his face.” Man is established as the manager over the created world; he becomes responsible for leading creation to its full flourishing. As if through the raw (not completely ready) creation of the world, God connects man with the task of guarding and protecting the Garden of Eden, and thus man actually cocreates the cultural landscape. The Czech philosopher Zdeněk Neubauer also describes this: “Such is reality, and it is so deep that it willingly crystallizes into worlds. Therefore I profess that reality is a creation and not a place of occurrence for objectively given phenomena.”61

Even in this viewpoint it is possible to see how Jewish thought is mystical—it admits the role of the incomprehensible. Therefore, through its groundedness, Jewish thought indulges mystery and defends itself against a mechanistic-causal explanation of the world: “The Jewish way of thinking, according to Veblen, emphasizes the spiritual, the miraculous, the intangible. On the other hand, pagans instead see the mechanical and scientific.”62 Many years later, Keynes enters into the history of economic thought from the same intellectual cadence; his greatest contribution to economics was precisely the resurrection of the imperceptible—for example in the form of animal spirits or uncertainty. The economist Piero Mini even ascribes Keynes’s doubting and rebellious approach to his almost Talmudic education.63

GOOD AND EVIL IN US: A MORAL EXPLANATION OF WELL-BEING We have seen that in the Epic of Gilgamesh, good and evil are not yet addressed systematically on a moral level. In the epic, there is a mention of evil, but it is presented as something that occurs exogenously, outside (the city), beyond us. The personification of evil, Humbaba, dwells beyond the city in the cedar forest; Enkidu was an evil who raged beyond the city—on the contrary, at the moment of his urbanification he becomes beneficial.

A reader of the epic cannot resist the feeling that evil correlates with nature and good with the city, civilization, progress. Incidentally, the Egyptians indulged in a similar deification of the city; for them cities represented divine entities. In Egyptian texts and poems, the city was identified with the gods who inhabited them.64 But in the epic, good and evil are not envisaged morally—they are not the result of an (a)moral act. Evil was not associated with free moral action or individual will. This was not about moral-human evil, but rather a kind of natural evil. It is as if good and evil were not touched by morality at all. Evil simply occurred. Period.

Hebrew thought, on the other hand, deals intensively with moral good and evil. A moral dimension touches the core of its stories.65 What’s more, history seems to be based on morals; morals seem to be the key determining factors of history. For the Hebrews, history proceeds according to how morally its actors behave. Human sin has an

influence on history, and that is why the authors of the Old Testament prepared a complicated moral code that was to guarantee a better world. Evil does not lie beyond the city, somewhere in nature, or in the forest, beyond us. In many stories, the exact opposite can be read—the natural represents good, and the artificial city civilization means evil.

Evil cannot, of course, be gotten rid of with a trek into the forest, as Gilgamesh and Enkidu resolve when they head out “to kill Humbaba and cut down the cedars.” The Sumerians believed in dualism—good and evil deities exist, and the earth of people becomes their passive battlefield. The Jews believed the exact opposite. The world is created by a good God, and evil appears in it as a result of immoral human acts. Evil, therefore, is induced by man.66 History unwinds according to the morality of human acts. As an example, let us take the expulsion from paradise: It occurred after Adam and Eve’s disobedience.67 The difference is illustrated in the story of the flood. The Old Testament presents human decadence and the multiplication of amoral evil as the reason for the flood:

The Lord saw how great man’s wickedness on the earth had become, and that every inclination of the thoughts of his heart was only evil all the time.68

As opposed to this, in the epic the flood happens because people behaved loudly and disturbed the gods. The epic therefore does not give any moral dimension to the flood, while Genesis on the other hand explains the flood through (a)morality. We find countless examples in the Old Testament where an (a)moral act preceded history. The obliteration of Sodom and Gomorrah came as a result of those cities’ sins,69 forty years in the desert before entering the Promised Land was the punishment for the uprising on Mount Sinai,70 and so on. The entire history of the Jewish nation is interpreted and perceived in terms of morality. Morality has become, so to speak, a mover and shaker of Hebrew history.

MORAL BUSINESS CYCLE AND ECONOMIC PROPHECIES In the story of the Jewish nation we also encounter the first notion of the economic cycle—the first ever recorded economic cycle in our written history. Here we also find the first attempt to explain the reasons for the cycle. There are many theories about economic cycles, and no regular agreement prevails among economists about what causes cycles even today. Some blame psychological factors, some discrepancy between savings and investment, and others are convinced of the monetary essence of the cycle, yet others see its causes in sunspots. The Hebrews came up with the idea that morals were behind good and bad years, behind the economic cycle. But we would be getting ahead of ourselves.

Pharaoh’s Dream: Joseph and the First Business Cycle To prevent this from being too simple, of course, the very first historic economic cycle is connected with a mystery. It is the Pharaoh’s well-known dream of seven fat and seven lean cows, which he told to Joseph, the son of Jacob. Joseph interpreted the dream as a macroeconomic prediction of sorts: Seven years of abundance were to be followed by seven years of poverty, famine, and misery.

Pharaoh had a dream: He was standing by the Nile, when out of the river there came up seven cows, sleek and fat, and they grazed among the reeds. After them, seven other cows, ugly and gaunt, came up out of the Nile and stood beside those on the riverbank. And the cows that were ugly and gaunt ate up the seven sleek, fat cows. Then Pharaoh woke up.71

Joseph later interprets the Pharaoh’s dream:

Seven years of great abundance are coming throughout the land of Egypt, but seven years of famine will follow them. Then all the abundance in Egypt will be forgotten, and the famine will ravage the land.72

Later Joseph offers the Pharaoh advice on how to de facto avoid the results of the prophecy—how to avert both famine and de facto seven years of abundance.

And now let Pharaoh look for a discerning and wise man and put him in charge of the land of Egypt. Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. This food should be held in reserve for the country, to be used during

the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.73

In this we certainly can handily recognize later Keynesian anticyclical fiscal policy. On the specific application of this rule for today’s economic policy, see the second part of the book.

Self-Contradicting Prophecy Here, let’s make several observations on this: Through taxation74 on the level of one-fifth of a crop75 in good years to save the crop and then open granaries in bad years, the prophecy was de facto prevented (prosperous years were limited and hunger averted—through a predecessor of fiscal stabilization). This nicely points out that if the prophecy were “true,” accurate, what was prophesied would often actually never happen. Therefore there is a paradox here: If we are able to anticipate problems and take appropriate measures, they do not have to occur at all.76 The Old Testament prophesies therefore were not any deterministic look into the future, but warnings and strategic variations of the possible, which demanded some kind of reaction. If the reaction was adequate, what was prophesied would frequently not occur at all.77 This principle of the “accursed prophet” or the “self-contradicting prophecy” can be also shown from the story of the prophet Jonah; he seemed to be aware of this (that prophecies, when adhered to, never actually materialize) and for this reason did not want to be a prophet: the city of Nineveh was never destroyed, although (or more accurately precisely because) he prophesied against it.78

If the threat is anticipated, it is possible to totally or at least partially avoid it. Neither Joseph nor the pharaoh had the power to avoid bounty or crop failure (in this the dream interpretation was true and the appearance of the future mystical), but they avoided the impacts and implications of the prophecy (in this the interpretation of the dream was “false”)—famine did not ultimately occur in Egypt, and this was due to the application of reasonable and very intuitive economic policy.79 In other words, no one knows the future—not even prophets—and this is simply because people react in a certain way to information about the future; that, in and of itself, changes the future and the validity of the prophecy. This principle stands directly against the self-fulfilling prophecy,80 the well-known concept of social science. Certain prophecies become self-fulfilling when expressed (and believed) while others become self- contradicting prophecies when pronounced (and believed).

Let us further note that the first “macroeconomic forecast” appears in a dream. A dream—that irrational, pictorial, and difficult to understand phenomenon which has long caused serious people to shake their heads and which has only recently been rehabilitated by psychology—becomes the bearer of the economic future.

It isn’t clear why economists today are asked to predict the future. Of all the social sciences, or I’ll even say all humanities, economics is the most focused on the future; other fields do not deal with it as much.81 Perhaps this issue is related—one easily gets the feeling that for economists paradise is situated in the future, while paradise for sociologists, ecologists, or even for psychologists is in the nostalgic past (when man lived in harmony with his family, nature, or his psyche). Also, economics believes itself to be the most exact science among all the humanities; this may also be because it senses the future.

But back to Torah: Later in this story we will notice that there is no reason offered as to why the cycle occurs (that will come later). Fat years will simply come, and then lean years after them. For the Bible, which has some kind of (mainly moral) explanation for nearly everything, this is quite unique. Actually, in this regard it recalls the Epic of Gilgamesh: Evil (or good) simply occurs, and our acts have no general influence on it. The cycle is not explained in any way, and no answer at all is given to the question “why?”82

Moral Explanation of a Business Cycle That is fundamentally different from later Hebrew interpretations, when the Jewish nation tries to offer reasons why the nation fared well or poorly. And those reasons are moral. If the nation or its representatives (most frequently kings and priests) behave according to God’s commands, then Israel wins in battle,83 enjoys the honor of surrounding nations,84 and what is more important for us: prospers economically:

If you pay attention to these laws and are careful to follow them, then the Lord your God will keep his covenant of love with you, as he swore to your forefathers. He will love you and bless you and increase your numbers. He will bless the fruit of your womb, the crops of your land—your grain, new wine and oil—the calves of your herds and the lambs of your flocks (…) You will be blessed more than any other people; none of your men or women will be childless, nor any of your livestock without young. (…)85

Without being timid, we can say this is the first documented attempt to explain the economic cycle. The economic cycle, the explanation of which is to this day a mystery to economists, is explained morally in the Old Testament. At times when Israel maintained law and justice, when widows and orphans were not oppressed, and when the Lord’s

commandments were obeyed, the nation prospered. Economic and social crises occurred when the opposite was the case:

Do not take advantage of a widow or an orphan. If you do and they cry out to me, I will certainly hear their cry. My anger will be aroused, and I will kill you with the sword.86

The following passage could serve as another example:

In the twenty-third year of Joash son of Ahaziah king of Judah, Jehoahaz son of Jehu became king of Israel in Samaria, and he reigned seventeen years. He did evil in the eyes of the Lord by following the sins of Jeroboam son of Nebat, which he had caused Israel to commit, and he did not turn away from them. So the Lord’s anger burned against Israel, and for a long time he kept them under the power of Hazael king of Aram.87

From today’s perspective, we can state that the moral dimension entirely disappeared from economic thought for a long time, especially due to the implementation of Mandeville’s concept of private vices that contrarily support the public welfare (I devote a separate chapter to Mandeville). Individual morals are irrelevant in such a system because something that would later be mystically called the invisible hand of the market also transforms private vices into public welfare.

Only in recent times have some currents of economics again become aware of the importance of morals and trust in the form of measuring the quality of institutions, the level of justice, business ethics, corruption, and so forth, and examining their influence on the economy, not to mention economic growth.

But how do we consolidate these two conflicting interpretations of the economic cycle: Can ethics be responsible for it or not? Can we influence reality around us through our acts? Does ethics have an influence on the future? With this, we come to one of the most important questions of ethics and economics.

THE ECONOMICS OF GOOD AND EVIL: DOES GOOD PAY OFF? This is probably the most difficult moral problem we could ask. The fact that we are asking this question in the middle of a discourse on Hebrew thought indicates that there are probably more opinions on this than there are participants in the discourse. We are also suggesting that it is not within the scope of this book to answer that question; justice has been done to the question if it manages to sketch out the main contours of possible searches for answers.

It could follow from the text above that good deeds pay. For the Hebrews, morals meant the best investment one could make. Nothing could help an economy more than being very particular about justice. Adherence to rules and a moral life would pay off very well for them materially.88 Let us not forget that the Hebrews had it more difficult to answer this question. In the Old Testament, there is little mention of heaven or hell—as if this concept did not exist for the Hebrew thought; it was not possible (somewhat noncommittally) to place payback for good or evil in the form of a just recompense that comes posthumously (as, in the end, Christianity does; see below). It speaks of justice in the context of life here on Earth. Moral accounting had to be carried out during life on earth; it could not be deferred into the preserve of life after death.

Sombart puts it this way:

The oldest form of Judaism knows nothing of another world. So, weal and woe can come only in this world. If God desires to punish or to reward, He must do so during man’s lifetime. The righteous therefore is prosperous here, and the wicked here suffer punishment. Obey my precepts, says the Lord, “so that thou mayest live long and prosper in the land which the Lord thy God hath given unto thee.” Hence the bitter cry of Job, “Wherefore do the wicked live, become old, yea, wax mighty in power? … But my way He hath fenced up, that I cannot pass … He hath broken me down on every side … He hath also kindled His wrath against me” [Job xxi.7; xix.8, 10, 11].“Why hath all this evil come upon me, seeing that I walked in His path continually?”89

As far as reward for good, we can find an interesting parallel in a different context, on the payment of tithes:

“You are under a curse—the whole nation of you—because you are robbing me. Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it. I will prevent pests from devouring your crops, and the vines in your fields will not cast their fruit,” says the Lord

Almighty. “Then all the nations will call you blessed, for yours will be a delightful land,” says the Lord Almighty.90

Inquiring about the economics of good and evil, however, is not that easy. Where would Kant’s “moral dimension of ethics” go if ethics paid? If we do good for profit, the question of ethics becomes a mere question of rationality. Immanuel Kant, the most important modern thinker in the area of ethics, answers on the contrary that if we carry out a “moral” act on the basis of economic calculus (therefore we carry out an hedonistic consideration; see below) in the expectation of later recompense, its morality is lost. Recompense, according to the strict Kant, annuls ethics.

The same issue figures in all its thorniness in the Torah. The issue of the “algorithm of recompense for sin,”91 the search for the rules of God’s justice on this earth, has become an important topic of the Hebrew thought. The pious Hasidim and their successors, the Pharisees, who are known mainly from the New Testament, considered their piety as being in their adherence to the given, and very strict, rules. As opposed to this, the prophetic schools emphasized that there was no algorithm between good and reward. We find a good example in one of the most beautiful—and at the same time most complicated—books of the Old Testament, the Book of Job. The role of devil’s advocate is (conveniently) awarded to Satan (incidentally, the only place in the Old Testament where the devil figures explicitly92):

Then the LORD said to Satan, “Have you considered my servant Job? There is no one on earth like him; he is blameless and upright, a man who fears God and shuns evil.” “Does Job fear God for nothing?” Satan replied. “Have you not put a hedge around him and his household and everything he has? You have blessed the work of his hands, so that his flocks and herds are spread throughout the land. But stretch out your hand and strike everything he has, and he will surely curse you to your face.”93

After Job’s misfortunes (by the way, three of the four misfortunes relate to his possession, his assets), which are supposed to show (it almost sounds like a divine bet between God and devil) that Job does not do good for profit, his friends stop by to see him. Their debate (which is among the high points of Jewish poetry and philosophy) more or less turns around how Job’s friends try to show that he must have sinned in some way and, in doing so, deserved God’s punishment. They are absolutely unable to imagine a situation in which Job, as a righteous man, would suffer without (moral) cause. Nevertheless, Job insists that he deserves no punishment because he has committed no offense: “God has wronged me and drawn his net around me.”94

At first sight, this idea collides with the aforementioned thesis of reward for the righteous. But Job remains righteous, even though it does not pay to do so:

Though he slay me, yet will I hope in him.95

And

till I die, I will not deny my integrity I will maintain my righteousness and never let go of it; my conscience will not reproach me as long as I live.96

Job does not live morally because it is advantageous. He remains righteous, even if his only reward is death. What economic advantage could he have from that?

Good Outgoing, Good Incoming In life it often happens that the righteous suffer and the unrighteous live in prosperity. What ontological status, then, does good have? What logic? Is there a correlation at all between the (outgoing) good or evil we do and the good or evil (just reward) that comes to us (incoming)? From what is presented above, it would appear that this relationship is created randomly. Why do good rather than evil (outgoing), if its consequent state (incoming) is random? Aside from the Book of Job, this characteristic is noted by the author of the biblical book of Ecclesiastes:

There is something else meaningless that occurs on earth: righteous men who get what the wicked deserve, and wicked men who get what the righteous deserve. This too, I say, is meaningless.97

The Psalmist also perceives this similarly and in full scope and bitterness:

But as for me, my feet had almost slipped; I had nearly lost my foothold. For I envied the arrogant when I saw the prosperity of the wicked. They have no struggles; their bodies are healthy and strong. They are free from the burdens common to man; they are not plagued by human ills.98

So why do good? After all, suffering is the fate of many biblical figures. The answer can only be: For good itself. Good has the power to be its own reward. In this sense, goodness gets its reward, which may or may not take on a material dimension. Nevertheless, in the proper sense of the term, morals cannot be considered in the economic dimension of productivity and calculus. The role of the Hebrews was to do good, whether it paid off or not. If good (outgoing) is rewarded by incoming goodness, it is a bonus,99 not a reason to do outgoing good. Good and reward do not correlate to each other.

This reasoning takes on a dimension of its own in the Old Testament. Good (incoming) has already happened to us. We must do good (outgoing) out of gratitude for the good (incoming) shown to us in the past.100

One more comment about morals and asceticism. As we will see later, especially in connection with the teachings of the Stoics and Epicureans, the question of whether one can enjoy life on earth plays an important role in the economy of good and evil. Consequently, whether he or she has the right to expect the maximization of utility. Can we lay claim to material or emotive rewards for good that has been performed? Immanuel Kant was of the opinion that if good (outgoing) is reciprocated with good (incoming), then we have done nothing meritorious or moral, because the increase in our utility (whether precalculated or unexpected) negates the morality of our acts.

Now, the Hebrews offered an interesting compromise between the teachings of the Stoics and Epicureans. We will go into it in detail later, so only briefly here: The Stoics could not seek their enjoyment—or, by another name, utility. They could not in any way look back on it, and in no way could they count on it. They could only live according to rules (the greatest weakness of this school was to defend where exogenously the given rules came from and whether they are universal) and take a indifferent stand to the results of their actions.

The Epicureans acted with the goal of maximizing utility without regard for rules (rules developed endogenously, from within the system, computed from that which increased utility—this was one of the main trumps of the Epicurean school; they did not need exogenously given norms, and argued that they could “calculate” ethics (what to do) for every given situation from the situation itself).

The Old Testament offers an option somewhere in the middle:

Be happy, young man, while you are young, and let your heart give you joy in the days of your youth. Follow the ways of your heart and whatever your eyes see, but know that for all these things God will bring you to judgment.101

In other words, clear (exogenously given) rules exist that must be observed and cannot be contravened. But within these borders it is absolutely possible, and even recommended, to increase utility. In the language of the more modern economic mainstream, individuals are recommended to carry out the optimalization of utility limited by their budgetary constraint. It calls for bounded optimalization (with limits). A kind of symbiosis existed between the legitimate search for one’s own utility (or enjoyment of life) and maintaining rules, which are not negotiable and which are not subject to optimalization. The religion of the Old Testament did not act as an ascetic religion forbidding earthly pleasures. On the contrary, the world was given to man, or, if you prefer, so that he could draw enjoyment from it. However, the mining of enjoyment must not come at the expense of exogenously given rules. “Judaism comes therefore to train or educate the unbounded desire … for wealth, so that market activities and patterns of consumption operate within a God-given morality.”102

Christianity later returned again to a more ascetic view103 on the search for utility, or enjoying life. A good example could be, among the many possible, the parable of Lazarus:

There was a rich man who was dressed in purple and fine linen and lived in luxury every day. At his gate was laid a beggar named Lazarus, covered with sores and longing to eat what fell from the rich man’s table. Even the dogs came and licked his sores. The time came when the beggar died and the angels carried him to Abraham’s side. The rich man also died and was buried. In hell, where he was in torment, he looked up and saw Abraham far away, with Lazarus by his side. So he called to him, “Father Abraham, have pity on me and send Lazarus to dip the tip of his finger in water and cool my tongue, because I am in agony in this fire.” But Abraham replied, “Son, remember that in your lifetime you received your good things, while Lazarus received bad things, but now he is comforted here and you are in agony.”104

In other words, what appears to be said here is: The rich man enjoyed himself on Earth, and as if that is why he must suffer after death, and on the other hand the poor man will be blessed in heaven, because he did not experience

good on Earth. Ultimately, we cannot read anything into the morality of the rich man or of Lazarus (we can only extrapolate it from the story, but nevertheless, the story itself does not consider this dimension to be important). The only difference between them is that the rich man enjoys a high standard of enjoyment on Earth while Lazarus suffers.

We shall return to the relation between good outgoing and good incoming in a separate chapter in the latter part of the book, where various moral views are summarized on a symbolical Axis of Good and Evil.

To Love the Law The Jews not only had to observe the law (perhaps the word covenant would be more appropriate), but they were to love it because it was good. Their relationship to the law was not supposed to be one of duty,105 but one of gratitude, love. Hebrews were to do good (outgoing), because goodness (incoming) has already been done to them.

And now, O Israel, what does the Lord your God ask of you but to fear the Lord your God, to walk in all his ways, to love him, to serve the Lord your God with all your heart and with all your soul, and to observe the Lord’s commands and decrees that I am giving you today for your own good? To the Lord your God belong the heavens, even the highest heavens, the earth and everything in it. Yet the Lord set his affection on your forefathers and loved them…. He defends the cause of the fatherless and the widow, and loves the alien, giving him food and clothing…. He is your God, who performed for you those great and awesome wonders you saw with your own eyes. Your forefathers who went down into Egypt were seventy in all, and now the Lord your God has made you as numerous as the stars in the sky.106

This is in stark contrast with today’s legal system, where, naturally, no mention of love or gratefulness exists. But God expects a full internalization of the commandments and their fulfillment with love, not as much duty. By no means was this on the basis of the cost-benefit analyses so widespread in economics today, which determines when it pays to break the law and when not to (calculated on the basis of probability of being caught and the amount of punishment vis-à-vis the possible gain). Let us present just a few examples:

Fix these words of mine in your hearts and minds; tie them as symbols on your hands and bind them on your foreheads.107

Even the Psalmist speaks of loving the law rather than its slavish fulfillment: “Oh, how I love your law! I meditate on it all day long. (…) Because I love your commands more than gold, more than pure gold.”108 Or elsewhere: “Blessed is the man who does not walk in the counsel of the wicked … But his delight is in the law of the LORD, and on His law he meditates day and night.”109 This motif is repeated many times in the Old Testament, and the principle of doing good (outgoing) on the basis of a priori demonstrated good (incoming) was also taken over by the New Testament. Atonement itself is based on an a priori principle; all our acts are preceded by good. The well- known sociologist Werner Sombart also notes the love and esteem the Jews have for the Law:

As Josephus [meaning Flavius] so well put it: “Ask the first Jew you meet concerning his ‘laws’ and he will be able to tell you them better than his own name.” The reason for this may be found in the systematic religious instruction given to every Jewish child, as well as in the fact that divine service partly consists of the reading and explanations of passages from Holy Writ. In the course of the year the Torah is read through from beginning to end. Moreover, it is one of the primary duties of the Jew to study the Torah. “And you shall teach them diligently to your children, and shall talk of them when you sit in your house, and when you walk by the way, and when you lie down, and when you rise up.” [Deuteronomy vi.5](…) The Talmud was the greatest wealth; it was the breath of their lives, their soul itself.110

The aforementioned citation beautifully shows what a central role laws and rules have in the Jewish religion. Their absolute understanding is of course typical only for rules and laws presented in the Torah—laws given by God.111

The following difference is also characteristic: The Egyptians had to love their rulers,112 while the Hebrews were to love their Lord and His law.113 Laws given by God are binding for Jews, and God is the absolute source of all values, and for this reason a way to overcome human laws must exist. Human laws, if they are in conflict with the responsibilities given by God, are subordinate to personal responsibility, and a Jew cannot simply join the majority, even if it is legally allowed. Ethics, the concept of good, is therefore always superior to all local laws, rules, and customs: “Do not follow the crowd in doing wrong. When you give testimony in a lawsuit, do not pervert justice by siding with the crowd.”114

THE FREEDOM OF THE NOMAD AND THE SHACKLES OF THE CITY Owing to the Hebrew’s liberation from Egyptian slavery, freedom and responsibility become the key values of Jewish thought. The Hebrews, originally a nomadic tribe, preferred to be unrestrained and grew up in constant freedom of motion. They preferred this way of life to settled agricultural city life, which seemed to tie them down.115 The Jews were shepherds—agricultural life would have required settling in one place.

The Hebrew ideal is represented by the paradise of the Garden of Eden, not a city.116 The despised city civilization or the tendency to see in it a sinful and shackling way of life appears in glimpses and allusions in many places in the Old Testament. The construction of the fabled Tower of Babel is presented with the preamble: “Then they said, ‘Come, let us build ourselves a city, with a tower that reaches to the heavens, so that we may make a name for ourselves and not be scattered over the face of the whole earth.’”117 Abraham chooses pastures, while Lot bets on (alas the sinful) cities of Sodom and Gomorrah.118 Numerous mentions even occur in the Song of Solomon, where the lovers look forward to their love in the gardens and vineyards outside the city, while the episodes that take place in the city give a despondent impression.

The nomadic Jewish ethos is frequently derived from Abraham, who left the Chaldean city of Ur on the basis of a command: “The LORD had said to Abram, ‘Leave your country, your people and your father’s household and go to the land I will show you.’”119 The ability to be in motion and not be tied down with ownership is a highly valued attribute. This way of life had understandably immense economic impacts. First, such a society lived in much more connected relationships, where there was no doubt that everyone mutually depended on each other. Second, their frequent wanderings meant the inability to own more than they could carry; the gathering up of material assets did not have great weight—precisely because the physical weight (mass) of things was tied to one place.

In addition, they were aware of a thin two-way line between owner and owned. We own material assets, but—to a certain extent—they own us and tie us down. Once we become used to a certain material comfort, it is difficult to bid farewell to it, pick up, and live freely. We encounter the dilemma of comfort and freedom in the story in the Sinai Desert. After the Jews were led out from slavery in Egypt, they start to grumble against Moses:

The rabble with them began to crave other food, and again the Israelites started wailing and said, “If only we had meat to eat! We remember the fish we ate in Egypt at no cost—also the cucumbers, melons, leeks, onions and garlic. But now we have lost our appetite; we never see anything but this manna!”120

One of Moses’s greatest deeds was that he managed to explain to his nation once and for all that it is better to remain hungry and liberated than to be a slave with food “at no cost.”121 If the term “free lunch” comes to mind, we can be sure that a whole nation was deceived that they were getting a “free lunch” and nobody realized that that “free lunch” cost them their freedom, and—to a large degree—their whole existence.

SOCIAL WELFARE: NOT TO ACT IN THE MANNER OF SODOM A remarkable complex of socioeconomic regulations is developed in the Old Testament, one we hardly find in any other nation of the time. In Hebrew teachings, aside from individual utility, indications of the concept of maximalizing utility societywide appear for the first time as embodied in the Talmudic principle of Kofin al midat S ´dom, which can be translated as “one is compelled not to act in the manner of Sodom” and to take care of the weaker members of society. Later in this chapter we will look at tithes, alms, years of pardons, and other responsibilities that were to create a more stable social environment and a kind of basic social safety net.

Sabbath: Year of Rest One of these social measures is the institution of sabbath years. This system is discussed in detail especially in chapter 25 of the Book of Leviticus:

When you enter the land I am going to give you, the land itself must observe a sabbath to the Lord. For six years sow your fields, and for six years prune your vineyards and gather their crops. But in the seventh year the land is to have a sabbath of rest, a sabbath to the Lord. Do not sow your fields or prune your vineyards. Do not reap what grows of itself or harvest the grapes of your untended vines. The land is to have a year of rest.122

Now every forty-nine years123 there is a year of forgiveness, when land is returned to its original owners (according to original plans, as the land was divided among individual tribes that entered Canaan).124 In a jubilee year, debts were to be forgiven,125 and Israelites who fell into slavery due to their indebtedness were to be set

free.126 Such provisions can be seen as the antimonopoly and social measures of the time. The economic system even then

had a clear tendency to converge toward asset concentration, and therefore power as well. It would appear that these provisions were supposed to prevent this process (without the need for a regulatory body). A period of fifty years roughly corresponded to the life span at the time, and at the same time evidently was supposed to act to remove the problem of generational indebtedness. The generation following the indebted or poor father got their land back and had a chance to start farming again. The sins of the fathers (bad management) did not fall as heavily on the heads of their sons and daughters. Successes were also not inherited linearly, as in a common economic system. The Sumerian Code of Hammurabi had something similar: regular forgiveness of debt, which was even prescribed once every three years.127 This is interesting because it appears that the oldest society to (with light suspicion) allow interest had at the same time instruments of forgiveness, which annulled the power of debt (after some time).128

Land at the time could be “sold,” and it was not sale, but rent. The price (rent) of real estate depended on how long there was until a forgiveness year. It was about the awareness that we may work the land, but in the last instance we are merely “aliens and strangers,” who have the land only rented to us for a fixed time. All land and riches came from the Lord. “The earth is the Lord’s, and everything in it, the world, and all who live in it.”129 Man is only a tenant on the land, and all ownership is only temporary. Rent had to be paid in the form of a tithe and in adherence to the laws given by the Lord. Forgiveness years are also a reminder that in reality, land does not belong to its human owners.

In this Year of Jubilee everyone is to return to one’s own property. If you sell land to one of your countrymen or buy any from him, do not take advantage of each other. You are to buy from your countryman on the basis of the number of years since the Jubilee. And he is to sell to you on the basis of the number of years left for harvesting crops. When the years are many, you are to increase the price, and when the years are few, you are to decrease the price, because what he is really selling you is the number of crops.130

A responsibility existed on all land sold, or people sold into slavery, that the new owner would sell off the land, or sell back the slave, as soon as they could work up enough to buy the lost ownership themselves or with the help of their relatives. If the slave was not able to do that, he had to wait—for in the jubilee year he would be released for free. “The land must not be sold permanently, because the land is mine and you are but aliens and my tenants.”131

These provisions express a conviction that freedom and inheritance should not be permanently taken away from any Israelite. Last but not least, this system reminds us that no ownership lasts forever and that the fields we plow are not ours but the Lord’s. The forgiveness years again emphasize that we are only wanderers here; nothing material from this world will save us, we take nothing with us and everything we have is a certain type of rental. We only pass through here; material things will stay here, even when we are gone.

Glean Another social provision was the right to glean, which in Old Testament times ensured at least basic sustenance for the poorest. Anyone who owned a field had the responsibility not to harvest it to the last grain but to leave the remains in the field for the poor.

When you reap the harvest of your land, do not reap to the very edges of your field or gather the gleanings of your harvest. Leave them for the poor and the alien. I am the Lord your God.132

Or elsewhere:

When you are harvesting in your field and you overlook a sheaf, do not go back to get it. Leave it for the alien, the fatherless and the widow, so that the LORD your God may bless you in all the work of your hands.133

Tithes and Early Social Net Every Israelite also had the responsibility of levying a tithe from their entire crop. They had to be aware from whom all ownership comes and, by doing so, express their thanks. If it was a crop, the first fruits of the harvest belonged to the Lord. They did not consider everything they produced to be exclusively their property, but they handed over every tenth sheaf to the Lord. This ten percent was handed over to the temple. And every third year they gave it to the Levite, the stranger, the fatherless, and the widow.134 For centuries, religious institutions—even in the Christian era—have held the function of a social safety net.

Among the Israelites we can find not only the roots of the modern widespread redistribution of wealth for the

benefit of the poorest but also the well-substantiated concept of economic regulation, which closely relates to social policy. In Judaism, charity is not perceived as a sign of goodness; it is more of a responsibility. Such a society then has the right to regulate its economy in such a way that the responsibility of charity is carried out to its satisfaction. “Since the community has an obligation to provide food, shelter, and basic economic goods for the needy, it has a moral right and duty to tax its members for this purpose. In line with this duty, it may have to regulate markets, prices and competition, to protect the interests of its weakest members.”135

Alms and various other acts of charity expressed for the poor functioned as another factor strengthening the social network. Through His prophets, the Lord many times reminds us that He wants mercy, not sacrifice.136 These were voluntary gifts in that the donor was in contact with the recipient and therefore knew who he was giving money to, who needed it, and how it was being used.

According to Moses’s law, family members had to take care of individuals whose breadwinner had died (widows, orphans). The deceased’s brother had to marry the widow. The first son born to him was considered the son of the deceased husband, and, when the son was grown, he had to take care of his mother. It is worth noting that widows inherited nothing from the deceased and sometimes had to return to their families after being widowed. In times of war, widows had the right to part of the spoils of war, and their money in times of threat was stored in the temple, where they were often employed as helpers to the Levites. The entire Old Testament and especially the Book of Deuteronomy remembers widows and orphans. They stand under special protection and those who are unkind to them face God’s judgment:

He raises the poor from the dust and lifts the needy from the ash heap; he seats them with princes and has them inherit a throne of honor.137

He who oppresses the poor shows contempt for their Maker, but whoever is kind to the needy honors God.138

If a man shuts his ears to the cry of the poor, he too will cry out and not be answered.139

Do not mistreat an alien or oppress him, for you were aliens in Egypt.140

As one can see, aside from widows and orphans, the Old Testament also includes immigrants in its area of social protection.141 The Israelites had to have the same rules apply for them as for themselves—they could not discriminate on the basis of their origin. “You are to have the same law for the alien and the native-born. I am the Lord your God.”142 Foreigners had the same right to glean as any Israelite. In relation to this, the Israelites are frequently reminded that they too were slaves in Egypt. They should remember their most miserable state and should behave kindly to their slaves, let alone to their guests: “Do not go over your vineyard a second time or pick up the grapes that have fallen. Leave them for the poor and the alien.”143

All the rules described above show what a central role community and its cohesion play in Judaism. With a number of responsibilities, however, comes the difficulty of getting them into practice. Their fulfillment, then, in cases when it can be done, takes place gradually “in layers.” Charitable activities are classified in the Talmud according to several target groups with various priorities, classified according to, it could be said, rules of subsidiarity.

Judaism recognizes different levels of responsibility to those in need. Interpreting the biblical obligation to loan funds to the needy (Exodus 22:24), the Talmud concludes that one has a primary obligation to meet the legitimate financial needs of the members of one’s own family. Only after satisfying family needs does one have an obligation to meet the needs of one’s own city. Finally, after satisfying the needs of one’s own city, only then does one have an obligation to meet the needs of other towns (Baba Mezia 71a).144

The most marked differences are in responsibilities to various socially distanced groups, as can be seen in the example of lending money with interest, where there is a dividing line between the (non)membership of the debtor to the Jewish community.

ABSTRACT MONEY, FORBIDDEN INTEREST, AND OUR DEBT AGE

If it appears to us that today’s era is based on money and debt, and our time will be written into history as the “Debt age,” then it will certainly be interesting to follow how this development occurred. Money, debt, interest—these are all things we cannot imagine being without in modern society. Keynes even considers interest and the accumulation of capital as the trigger of modern progress.145 But at the very beginning it was connected with ethical rules, faith, symbolism, and trust.

The first money came in the form of clay tablets from Mesopotamia, on which debts were written. These debts were transferable, so the debts became currency. In the end, “It is no coincidence that in English the root of ‘credit’ is ‘credo,’ the Latin for ‘I believe.’”146 These tablets have been preserved from more than five thousand years ago and are the oldest writings we have preserved. Coins appeared around 600 BC and were found at the Ephesian temple to the goddess Artemis. The coins did not differ much from today’s; they had a symbol of a lion on them and the shape of the goddess Athena or an owl. China introduced coins in 221 BC.147 To a certain extent it could be said that credit, or trust, was the first currency. It can materialize, it can be embodied in coins, but what is certain is that “money is not metal,” even the rarest metal, “it is trust inscribed,”148 and money actually has nothing in common with its material bearer (coin, note). “Money is a matter of belief, even faith.”149 This is nicely expressed by the Czech term for lender, věřitel, literally meaning believer. It is someone who believes the debtor. Money is a social abstractum. It is a social agreement, an unwritten contract.150 Calling for the gold standard has similar significance as calling for the clay standard. The primeval nations were aware that the currency, the medium of circulation, has nothing in common with its bearer. Metals sometimes tend to be carriers of trust, but it could also be clay; clay, the most common “commodity” at our feet ubiquitously. From the same clay, from the “dust of the earth” that Adam was created from, according to Genesis. The first man and the first money were both products of the earth.151

It is interesting that we find in Genesis the first mention of all of the first monetary transaction, in the story of Abraham, and it is accompanied with a unique puzzlement. The story is about the sale of a field that Abraham buys from the Hittites so that he can bury Sarah.152 But the Hittites want to give it to him, not to sell it. Until then, all asset transactions documented in Genesis were nonmonetary, and ownership changed through gifts153 or violence (Abraham gains substantial spoils of war from a king who attacked Sodom and Gomorrah).154 In the first monetary transaction, Abraham insists that he wants to buy the field “for the full price as a burial site among you.” He refuses an offer to receive the tomb for free, even doing so twice. It’s almost surprising how this process is described in detail without them even haggling over the price. We will examine the symbolism of the gift in greater detail in the chapter on Christianity.

Inseparably, with the original credit (money) goes interest. For the Hebrews, the problem of interest was a social issue: “If you lend money to one of my people among you who is needy, do not be like a moneylender; charge him no interest.”155 The discussion of whether collecting interest was a sin or not has lasted for millennia. In the Old Testament, there is an explicit ban on Jews collecting interest from their fellow Jews.

Do not charge your brother interest, whether on money or food or anything else that may earn interest. You may charge a foreigner interest, but not a brother Israelite, so that the Lord your God may bless you in everything you put your hand to in the land you are entering to possess.156

Christians later placed this prohibition on themselves, and for a long time the collecting of interest was forbidden and publicly punished. Nevertheless, everyone had to borrow money at some point, and no one would lend without interest. And while paradoxically the Christians considered the Jews to be an unclean nation, Christian authorities allowed—or rather assigned—them to lend money with interest. This represented one of the few vocations they could pursue in medieval central Europe.

William Shakespeare leaves a famous picture of this in the play The Merchant of Venice, where one of the main antagonists, the Jew Shylock, wants a pound of the borrower’s flesh as collateral in the event of nonpayment of a loan. In fourteenth-century Venice, Jews acted as lenders. As the economic historian Niall Ferguson notes, when Shylock says of Antonio that “Antonio is a good man,” he does not have his moral quality ultimately in mind, but rather his ability to repay (despite this, residual risk is ensured—nonmonetarily—with a pound of his flesh). It was at this time when the Jews learned this trade better than anyone else. In the end, the term “bank” comes from the Italian banci, or the benches that Jewish lenders sat on.157

But the ancient Hebrews not only approached interest, but debt as a whole with caution. Aside from the previously mentioned forgiveness of debts, there were also clearly set rules setting how far one could go in setting guarantees and the nonpayment of debts. No one should become indebted to the extent that they could lose the source of their livelihood: “Do not take a pair of millstones—not even the upper one—as security for a debt, because that would be taking a man’s livelihood as security.”158

But back to the Old Testament ban on interest collection. At the time, the ban was intended as a social tool. At the time, when the poor borrowed out of necessity, they were social loans (unlike today when most of our loans are not out of necessity but out of abundance). When the poor borrowed in an emergency or need, the poor were not to be further burdened by additional interest.

If one of your countrymen becomes poor and is unable to support himself among you, help him as you would an alien or a temporary resident, so he can continue to live among you. Do not take interest of any kind from him, but fear your God, so that your countryman may continue to live among you. You must not lend him money at interest or sell him food at a profit.159

In the course of history, however, the role of loans changed, and the rich borrowed especially for investment purposes, just as it is in the case of Shylock and Antonio’s guarantor (Antonio was a merchant whose riches were sailing somewhere out at sea). In such a case a ban on interest did not have great ethical significance. Thomas Aquinas, a medieval scholar (1225-1274), also considers similarly; in his time, the strict ban on lending with usurious interest was loosened, possibly due to him.

Today the position and significance of money and debt has gone so far and reached such a dominant position in society that operating with debts (fiscal policy) or interest or money supply (monetary policy) means that these can, to a certain extent, direct (or at least strongly influence) the whole economy and society. Money is playing not only its classical roles (as a means of exchange, a holder of value, etc.) but also a much greater, stronger role: It can stimulate, drive (or slow down) the whole economy. Money plays a national economic role. There is even one economic school that has money directly in its name: Monetarism. This school, as represented especially by Milton Friedman, teaches that the management of monetary supply is the primary means of influencing economic activity. This could only happen in a highly monetized society that has a reliance on debt and interest as one of its key characteristics.

Incidentally, banknotes and coins (or the symbolic bearers of value) do not belong to us.160 It is the property of the national bank, and this is also why you cannot, for example, deface it (nor can you print it; here competition simply does not work).161 What’s more, you do not have the freedom not to receive money, to accept it, to respect it.

MONEY AS ENERGY: TIME TRAVEL AND GROSS DEBT PRODUCT (GDP) Let us add here that condemning interest also had a strong ancient tradition, one which came from the pen of Aristotle. Aristotle condemned interest162 not only from a moral standpoint, but also for metaphysical reasons. Thomas Aquinas shared the same fear of interest and he too argued that time does not belong to us, and that is why we must not require interest.

And it is the relationship between time and money that is very interesting. For money is something like energy that can travel through time. And it is a very useful energy, but at the same time very dangerous as well. Wherever you put this energy in a time-space continuum, wherever you plant it, something happens there. As a form of energy, money can travel in three dimensions, vertically (those who have capital lend to those who do not) and horizontally (speed and freedom in horizontal or geographic motion has become the by-product—or driving force?—of globalization). But money (as opposed to people) can also travel through time. This time-travel of money is possible precisely because of interest. Because money is an abstract construct, it is not bound by matter, space, or even time. All you need is a word, possibly written, or even a verbal promise, “Start it, I’ll pay it,” and you can start to build a skyscraper in Dubai. Understandably, banknotes and coins cannot travel through time. But they are only symbols, a materialization, an embodiment or incarnation of that energy. Due to this characteristic, we can energy-strip the future to the benefit of the present. Debt can transfer energy from the future to the present.163 On the other hand, saving can accumulate energy from the past and send it to the present. Fiscal and monetary policy is no different than managing this energy.

If we shift to the present day, money’s energy characteristic can be shown in such things as GDP statistics. Due to time indeterminacy, the debate on GDP growth frequently tends to be nonsensical. GDP growth can simply be influenced with the help of debt (and either through fiscal policy in the form of deficits or budget surpluses)164 or through the help of interest rates (monetary policy). So what sense do GDP growth statistics make in a situation with a several times larger deficit in its background? What sense does it make to measure riches if I have borrowed to acquire them?165

The Jews as well as Aristotle behaved very guardedly toward loans. The issue of interest/usury became one of the first economic debates. Without having an inkling of the future role of economic policy (fiscal and monetary), the

ancient Hebrews may have unwittingly felt that they were discovering in interest a very powerful weapon, one that can be a good servant, but (literally) an enslaving master as well. Fiscal as well as monetary policy are powerful weapons, but they are deceitful.

It’s something like a dam. When we build one, we are preventing periods of drought and flooding in the valley; we are limiting nature’s whims and, to a large extent, avoiding its incalculable cycles. Using dams, we can regulate the flow of water to nearly a constant. With it we tame the river (and we can also gain energy from the dam), we acculture it—it will not be as wild, and it starts to behave as we imagine it. Respectively, it will certainly appear that way over time. But if we do not regulate the water wisely, it may happen that we would overfill the dam and it would break. For the cities lying in the valley, their end would be worse than if a dam were never there.

The management of money’s energy through fiscal and monetary policy is similar. Manipulation of state budget surpluses or deficits and manipulation of the central interest rate are gifts of civilization that can serve and do great things. But if we start to use them unwisely, our end could be worse than if they were never there.

LABOR AND REST: THE SABBATH ECONOMY

As opposed to the negative connotation of work ascribed to labor (manual labor is suitable only for slaves)166 by ancient Greeks, labor was not considered degrading in the Old Testament. On the contrary, the subjugation of nature is even a mission from God that originally belonged to man’s very first blessings.

God blessed them and said to them, “Be fruitful and increase in number; fill the earth and subdue it. Rule over the fish of the sea and the birds of the air and over every living creature that moves on the ground.”167

Only after man’s fall does labor turn into a curse.168 It could even be said that this is actually the only curse, the curse of the unpleasantness of labor, that the Lord places on Adam. Instead of taking care of the Garden of Eden, now “in the sweat of your face you shall eat bread.”169 A pleasant labor—people to this day tend gardens outside their homes as a hobby—suddenly becomes an unpleasant curse. If man lived in harmony with nature before, now, after the fall, he must fight; nature stands against him and he against it and the animals. From the Garden we have moved unto a (battle)field.

We can only speculate about the extent to which today, several thousand years after the writing of these lines in Genesis, we have managed to set ourselves free from this primary curse. It could be said that an essential number of people in the developed world now do not have to eat bread in the sweat of our face, but nevertheless it is still far from it to have pleasure from work similar to the pleasure we have in cultivating our gardens. Those who take their work in this way, it could be said, have managed to liberate themselves from this primary curse. Work was originally supposed to be something that we enjoy, that fulfills us, something that we consider pleasant, our calling.

Work is also not only a source of pleasure but a social standing; It is considered an honor. “Do you see a man skilled in his work? He will serve before kings.”170 None of the surrounding cultures appreciate work as much. The idea of the dignity of labor is unique in the Hebrew tradition.171 And one of the most frequent blessings was: “God may bless you in all the work of your hands.”172

Both Plato and Aristotle consider labor to be necessary for survival, but that only the lower classes should devote themselves to it so that the elites would not have to be bothered with it and so that they could devote themselves to “purely spiritual matters—art, philosophy, and politics.” Aristotle even considers labor to be “a corrupted waste of time which only burdens people’s path to true honour.”173

The Old Testament adopts a very different view on labor. It is celebrated in many passages:

Lazy hands make a man poor, but diligent hands bring wealth.174 (…) The sleep of a laborer is sweet, whether he eats little or much, but the abundance of a rich man permits him no sleep.175 (…) The sluggard’s craving will be the death of him, because his hands refuse to work.176

On the other hand, labor as a unit of production also had its limits. Despite this, labor was considered a natural human destiny. Hebrew thinking is characterized by a strict separation of the sacred from the profane. In life, there are simply areas that are holy, and in which it is not allowed to economize, rationalize, or maximize efficiency.177 A good example is the commandment on the Sabbath. No one at all could work on this day, not even the ones who were subordinate to an observant Jew:

Remember the Sabbath day by keeping it holy. Six days you shall labor and do all your work, but the seventh day is a Sabbath to the Lord your God. On it you shall not do any work, neither you, nor your son or daughter,

nor your manservant or maidservant, nor your animals, nor the alien within your gates. For in six days the Lord made the heavens and the earth, the sea, and all that is in them, but he rested on the seventh day. Therefore the Lord blessed the Sabbath day and made it holy.178

Although from an economic viewpoint it was certainly possible to spend the seventh day much more productively, the message of the commandment on Saturday communicated that people were not primarily created for labor. Paradoxically, it is precisely this commandment out of all ten that is probably the most violated today. In this sense, the message of the Old Testament stands directly against Gilgamesh’s reasoning, where he tries to make his subjects into robot-ers, who work constantly until rest is absolutely necessary. The Jewish Sabbath is not such a necessary rest, which is de facto just as necessary as the rest of a strained machine or an overheated saw. What are we? Machines? Must we, as the overworked saw after difficult work, take a break for a while so that we do not over-heat, do not jam up? Do we rest only so that, after the break, we could say (to use the maxim from Orwell’s Animal Farm horse called Boxer) “I will work harder!”? Is that the meaning of rest? To increase efficiency? To avoid workplace injuries?

Saturday was not established to increase efficiency. It was a real ontological break that followed the example of the Lord’s seventh day of creation. Just as the Lord did not rest due to tiredness or to regenerate strength; but because He was done. He was done with His work, so that He could enjoy it, to cherish in His creation. The seventh day of creation is enjoyment. The Lord created the world in six days, and we have six days to perfect it. On Saturday, the world, as imperfect as it certainly is and with all its cracks, should not be perfected. Six-sevenths of time either be dissatisfied and reshape the world into your own image, man, but one-seventh you will rest and not change the creation. On the seventh day, enjoy creation and enjoy the work of your hands.

The observance of the Sabbath bears the message that the purpose of creation was not just creating but that it had an end, a goal. The process was just a process, not a purpose. The whole of Being was created so that we may find in it rest, accomplishment, joy. The meaning, the peak of something created, does not lie in the next creation but in the resting in the midst of all we have cocreated. Translated into economic language: The meaning of utility is not to increase it permanently but to rest among existing gains. Why do we learn how to constantly increase gains but not how to enjoy them, to realize them, to be aware of them?

This dimension has disappeared from today’s economics. Economic effort has no goal at which it would be possible to rest. Today we only know growth for growth’s sake, and if our company or country prospers, that does not mean a reason for rest but for more and higher performance.179 If we believe in rest at all today, it is for different reasons. It is the rest of the exhausted machine, the rest of the weak, and the rest of those who can’t handle the tempo. It’s no wonder that the word “rest” is not used today (it has become almost pejorative); we say we need a break, or a day off. It is also interesting that we have days when we must not toil connected (at least lexically) with the word meaning emptiness: the English term “vacation” (or emptying), as with the French term, les vacances, or German die Freizeit, meaning open time, free time, but also empty time. As if these days were hollow, empty, well, days off.

When I met one of my current friends, I asked what he does, as is common in conversation. He answered me with a smile: “Nothing. I’ve got it all done.” And he wasn’t even a millionaire or a gentleman of means. I’ve been thinking about that ever since. Our hurrying, the economy of our civilization, has no goal at which it may rest. When do we say “We’re done”?

CONCLUSION: BETWEEN UTILITY AND PRINCIPLE The influence of Jewish thought on the development of market democracy cannot be overestimated. The key heritage for us was the lack of ascetic perception of the world, respect to law and private property, but it also established the basis of our social net. The Hebrews never despised material wealth; on contrary, the Jewish faith puts great responsibility on property management. Also the idea of progress and the linear perception of time gives our (economic) life meaning—and we owe this to the Old Testament times. We have tried to show how the Torah desacralized three important areas in our lives: the earthly ruler, nature, and the concept of the hero. We have tried to show that the quest for a heaven on Earth (similar to the Jewish one) has, in its desacralized form, actually also been the same quest for many of the most distinguished economists in our history.

In this chapter we have also discussed good and evil and their relation to utility. What is the relationship between the good and evil that we do (outgoing) and the utility of disutility that we (expect to) get as a reward (incoming)? We have seen that there are two answers in Hebrew thought. Related to this, we have studied the first mention of a business cycle with the pharaoh’s dream as well as seen a first attempt (that we may call Keynesian) to tackle this (natural) fluctuation. We have also seen that the Hebrews tried to explain the business cycle with morality and

ethics. For the Hebrews, morality was the key driver of history. We have devoted some time to study the principle of Sabbath rest—perhaps as a reminder that we are not here to

work all the time and that there are holy places and times in life (Sabbath) where we are not allowed to maximize our productivity. In Hebrew thought, yes, we are finishers of the creation, keepers of the Garden, but as such, we are to work within limits. We have a role as finishers of creation—both specifically, but also in a more abstract ontological meaning. We have also talked about the stark difference between independent nomadic life and the civilized city. We have also spent a couple of pages looking at the history of abstract money that can travel in time as credit thanks to the instrument of charging interest. Consequently, we also looked at the history of debt and the risks that it carries with it.

A lot of Hebrew economic thought will be developed in the first chapters of the second part of this book. Here the key teaching will be integrated with other observations in the history of economic thought in an attempt to draw some conclusions.

In the next chapter, which is devoted to the ancient Greek economic ethos, we will examine two extreme approaches to laws and rules. While the Stoics considered laws to be absolutely valid, and utility had infinitesimal meaning in their philosophy, the Epicureans, at least in the usual historical explanation, placed utility and pleasure in first place—rules were to be made based on the principle of utility. It cannot be overlooked that the Hebrews managed to find something of a happy compromise between both of these principles. The Torah stands in first place and is undoubtable, but it nevertheless enables the growth of utility within limits that are set in advance—by the rules of the Torah.

3 Ancient Greece1

… the safest general characterization of the European philosophical tradition is that it consists of a series of footnotes to Plato.

Alfred Whitehead

European philosophy was born in the ancient Greek world; the foundations of Euro-Atlantic civilization, and economics as well, were inspired here in many ways. We will not be able to completely understand the development of the modern notion of economics without understanding the disputes between the Epicureans and the Stoics; it is here that the part of philosophy was born which later became an indivisible part of economics. It was the hedonism of the philosopher Epicurus that would later receive a more exact economization and more technical mathematization at the hands of J. Bentham and J. S. Mill. The foundations of rational idealization and the topic of scientific progress expressed in mathematics can be found in ancient Greece, especially in the teachings of Plato, and both helped to define the development of economics. “Plato’s most important and enduring contribution to formal thought was the elevation of mathematics to a primary position in scientific inquiry. All sciences, including economics, which use mathematical analyses must comprehend the essence of Platonic idealism in order to properly evaluate the significance and limits of mathematics in their discipline.”2 But first we will look shortly at other early philosophers, and even before that at the prephilosophical, poetic ancient tradition.

FROM MYTH: THE TRUTH OF THE POETS The poetic tradition, as culminated in Homer’s Iliad and Odyssey, played a major role in the beginnings of Greek civilization. In his book The Masters of Truth in Ancient Greece, the Belgian historian Marcel Detienne highlights the fact that before the development of the Greek sophist and philosophical traditions, poetry played a much more important role than we can imagine today. This tradition, based on oral presentation and the development of complicated mnemonics, bore a completely different notion of truth and justice, and philosophy was rooted in it together with mythology and art. Only much later did the notion of truth “tear away” from the exclusive refuge of poets and become the domain of philosophers. So Plato does not consider poets to be “colleagues in another department, pursuing different aims, but as dangerous rivals,” as Nussbaum writes.3 The first philosophers tried to fight myths, get rid of narration, orient knowledge toward the unchanging—and take over the role of “masters of the truth” for themselves. The same thing would later be achieved by priests, theologists, and finally scientists, to whom questions on the content of truth are directed today.

What did such a “poetic” notion of truth look like in ancient Greece? This is what the poetic Muses say of themselves: “Field-dwelling shepherds, ignoble disgraces, mere bellies: we know how to say many false things similar to genuine ones, but we know, when we wish, how to proclaim true things.”4 Muses demand the right to proclaim truth (or deception). In addition, “epic and tragic poets were widely assumed to be the central ethical thinkers and teachers of Greece; nobody thought of their work as less serious, less aimed at truth, than the speculative prose treatises of historians and philosophers.”5 Truth and reality were hidden in speech, stories, and narration. Successful stories that arose from the hands of the poets were repeated, survived both their creators and their main heroes, and existed permanently in people’s thoughts. Poetry is an image of reality; this is beautifully illustrated by the quote attributed to the poet Simonides: “Poetry is painting with the gift of speech.”6 But poets actually went even further, and with their speech they shaped and established reality and truth. Honor, adventure, great deeds, and the acclaim connected with them played an important role in the establishment of the true, the real. With praise from the lips of poets they achieved fame, and those who are famous will be remembered by people. They become more real, part of the story, and they start to be “realized,” “made real” in the lives of other people. That which is stored in memory is real; that which is forgotten is as if it never existed.

Truth did not always have today’s “scientific” form. Today’s scientific truth is founded on the notion of exact and objective facts, but poetic truth stands on an interior (emotional) consonance with the story or poem. “It is not addressed first to the brain … [myth] talks directly to the feeling system.”7 If a poet writes “she was like a flower,” from a scientific point of view he is lying; every poet is a liar. The human female has almost nothing in common with a plant—and what little it does have in common is not worth mentioning. Despite this, the poet could be right and not the scientist. Ancient philosophy, just as science would later, tries to find constancy, constants, quantities, inalterabilities. Science seeks (creates?) order and neglects everything else as much as it can. In their own experiences, everyone knows that life is not like that, but what happens if the same is true for reality in general? In

the end, poetry could be more sensitive to the truth than the philosophical method or, later, the scientific method. “Tragic poems, in virtue of their subject matter and their social function, are likely to confront and explore problems about human beings and luck that a philosophical text might be able to omit or avoid.”8

Just as scientists do today, artists drew images of the world that were representative, and therefore symbolic, picturelike, and simplifying (but thus also misleading), just like scientific models, which often do not strive to be “realistic.” Throughout its tradition, painting has been the art of illusion, the art of “pointing out,” and so, from a different angle, “misleading.” It is in art, as the author of Dissoi logoi says, where those who mislead “in such a way as to make most things similar to the real ones” are the best.9

But poets have their truth. The Greeks believed that the muses can reveal the hidden truth and see the future: “They breathed a divine voice into me, so that I might glorify what will be,”10 Hesiod writes. At the same time, let us note that for Greeks the privileged time for truth revelation (aletheia) was mainly sleep: “She invented dreams which told the future freely, though, it would seem, confusedly.”11 We have already encountered something similar in the Hebrew thought, when Pharaoh sees the future in a dream and Joseph predicts the business cycle. But the dream, or an imitation of a dreamlike state, is also the beginning of the scientific method of René Descartes. He used the dream (detachment from senses) as a method of seeing pure truth. We will get to this in later chapters.

Speaking of Descartes, it seems that he was searching for a different sort of the truth. He was looking for the stable truth, truth that is free from doubts.12 Furthermore, he even seems to be aware of that, as his major book is called Discourse on the Method of Rightly Conducting One’s Reason and of Seeking the Truth in the Sciences. Descartes was searching for truth in sciences only. He was searching for doxa. The truth of the poets seems to be alethia, a different sort of truth. That truth is, on the contrary, fleeting, irrational, and dreamlike.

Poet Economists Hesiod, one of the greatest and at the same time last leaders of the Greek poetic tradition who lived around hundred years before the first famous philosopher Thales, can be considered to be the first economist ever.13 He examined such things as the problem of scarcity of resources, and, stemming from that, the need for their effective allocation. His explanation of the existence of scarcity is thoroughly poetic. According to him, the gods sent shortage down on humanity as a punishment for Prometheus’s acts:

[T]he gods keep the means of life concealed from human beings. Otherwise you would easily be able to work in just one day so as to have enough for a whole year even without working, and quickly you would store the rudder above the smoke, and the work of the cattle and of the hard-working mules would be ended. But Zeus concealed it, angry in his heart because crooked-counselled Prometheus had deceived him.14

Hesiod’s explanation is very interesting and we see something very fundamental in this “analysis” (we will get back to this later): the archetype of human labor.

According to Hesiod, labor is humans’ fate, virtue, and the source of all good. Those who do not work deserve nothing but scorn. People and the gods alike hate the lazy, who are “like the stingless drones that waste the labour of the bees, eating it without working.”15 Aside from being the first attempt at an analysis of human labor, Hesiod’s Works and Days is interesting for us as contemporary economists especially in its criticism of usury, which centuries later resonates in the works of Plato and Aristotle, as we will see later in this chapter.

First Philosophers Economic topics did not play a main role in the teachings of the Greeks too often, either in poetry or philosophy. But Thales, who was considered the first Greek philosopher ever, made his living as a trader. He is marked as the author of “evidence that he is able to win even in commercial competition, if he wants to show his [philosophical] superiority over it. He allegedly predicted a bad olive crop and used this to gain wealth, so as to show how easy and narrow-minded pursuit it was.”16 In ancient Greece, economic affairs are therefore, from the first philosopher, considered to be subordinate to all things spiritual. Economic considerations, as opposed to philosophical considerations, already have in their essence a quite limited subject of interest. Philosophical reflection in economic considerations is therefore justified and desired. This is what Thales tried to show in his “olive business.” Philosophy is not empty speech but an endeavor with widespread practical impacts. Thales was involved in philosophy not because he could not make a living otherwise, but because in its essence it offered the widest horizons for consideration. For this reason philosophy was considered to be the queen of the “sciences” in ancient Greek philosophy. With a bit of exaggeration, we could argue the exact opposite of today’s world. Philosophy to us often seems to be an unnecessary icing on the cake, a useless endeavor that never solves anything—so unlike economics!

Numerical Mystics The key ideas of the original Ionian philosophic tradition have strongly inspired economic science. The Ionian tradition created the search for one (!) original principle of all things. For us, one of the most inspiring philosophers is Pythagoras, who beheld the essence of the world in the numerical proportions of its forms. He argued that “number is the essence of things.”17 “As such, it has magical force,” for the speculations of the Pythagoreans about numbers “not only had an intellectual nature, but were also permeated by a mystical significance.”18 “Number is the essence of things—Everything is a number. When the question is asked whether such language is to be understood in literal or symbolic sense, here the highest authorities are at issue.”19 Aristoxen, Pythagoras’s student noted that Pythagoras “diverted the study of numbers from mercantile practice, and compared everything to numbers.”20 Interestingly for us economists, “Aristoxen implies that it was this commercial insight which gave birth to the project of discovering the true ‘measure’ of everything … he claims that the comparison of everything with numbers began from economic and commercial observations.”21 If this is true, then it wasn’t mathematics that served as an inspiration for economists, but the other way around.

It is also interesting that the Pythagoreans, similar to the Hebrews and other nations, created numerical mysticism.22 Incidentally, the leading logician and mathematician of the first half of the last century, Bertrand Russell, sees precisely the combination of mysticism and science (at which the Pythagoreans excelled)23 as the key to achieving philosophical perfection. For Pythagoras, a number24 was not just a mere quantity, the count of something; it is also a quality, which should become a means of describing the principle of a harmonized world, the cosmos.25 And this teaching later, through Plato, entered the mainstream of European scientific consideration. “Plato was basically elaborating the ideas of the secret Pythagorean societies. They held that the world was a rational entity built by the ‘great Geometer’ from the basic unit; that is, the point or the ‘one.’”26 The Pythagoreans were the first to consider the possibilities of reducing the world to numerical form. We will see later just how much this would be an inspirational approach for twentieth-century economists.

As opposed to his contemporaries, Heraclitus envisaged reality as being nonstationary. Unmovability, unemotiveness, and staticness were at his time synonyms for perfection and divinity. The efforts of economists to involve a constantly changing reality with abstract, unchanging principles certainly go this far back. Heraclitus’s world was, on the other hand, paradoxically held together by antithetical forces as in the bow and lyre.27 Harmony is created from the antithetical and discordant, and it is realized as motion.

Now, Parmenides, a philosopher of the schools of Elea, could be a certain antithesis to Heraclitus. This priest of Apollo also considers the world that we perceive with our senses as constantly changing and flowing, but he marks it as unreal. What is real, according to him, comprises only processes of reason, abstract thoughts that are stable and unchanging. From this standpoint, truth lies in the area of ideas or theories. The imperfect empirical world (the world of phenomena), which suffers at the hands of constant changes, is not the arena of truth; the truth is in the abstract. The real empirical world is not real—for it to be real a mental model must be forged, and the changing world “put to death” in order to “stabilize” the idea.

Parmenides could therefore be considered a predecessor to the Socratic and Platonic philosophies of ideal forms, which among other things greatly influenced economics (as well as physics and other scientific disciplines) and laid the foundation for the creation of models as stable abstract constructions considered by many to be more real than reality. Modern science in effect constantly flows between the Parmenidean and Heraclitean notions of the world. On the one hand, it creates models as reconstructions of reality, or assumes that reality can be reconstructed, and thus implies its permanence in some sense at least. On the other hand, many scientists see rational models only as “untrue, unreal” crutches, which should help with predictions of the future in an ever-changing, dynamic reality.

XENOPHON: MODERN ECONOMICS FOUR HUNDRED YEARS BEFORE CHRIST We can find the pinnacle of ancient political economics in the works of the economist Xenophon, who was also a philosopher, albeit an average one. In his texts, this Athenian described the economic phenomena that modern economists laboriously rediscovered only in the nineteenth century, more than two thousand years after his death, and despite the fact that “as late as the 18th century his ‘Ways and Means’ was studied for its practical analysis of economics and administrative problems.”28 In-depth and straightforward economic considerations have been with us from the beginnings of philosophy and Greek-European culture. Xenophon’s economic analyses are no more superficial than Smith’s.

Xenophon, Plato’s contemporary, divided most of his ideas on economics into two books, Oeconomicus and De vectigalibus (On Revenues, which is sometimes called Ways and Means). The first of these deals with the principles

of good household management, and the second advises Athens on how to increase revenues in the state’s coffers and be more prosperous. Without major exaggeration, it can be said that Xenophon wrote the very first stand-alone textbooks for micro- and macroeconomics. Incidentally, Aristotle also wrote a book called Economics (Oeconomica),29 in which he reacts to Hesiod’s Works and Days. Aristotle’s book is more a tract on the management of housekeeping—the dominant part of the book deals with relations between husbands and wives, and especially the role of women. The book overall gives the impression that it was written for women, since a “good wife should be the mistress of her home”30 because she is more likely to take care of the household’s indoors, while the husband is, according to Aristotle, “less adapted for quiet pursuits but well constituted for outdoor activities.”31

But back to Xenophon. In his book On Revenues, he exhorts Athenians to maximize the state’s treasury and advises on how to achieve it. However, he does not advise nationalization or wartime maneuvers as the best path to achieving maximum tax revenues. He considered the expansion of Athens’s trade activities as more appropriate, which at the time was truly a revolutionary idea, one that had to be rediscovered only much later. He calls for the stimulation of Athenian citizens’ economic activity, and especially that of immigrants, for whom he proposes the foundation of a “board of Guardians of Aliens.”32 Together with the construction of homes for immigrants, such a board would increase not only their numbers but also their goodwill, and with that Athens’s economic strength:

[T]hat too would add to the loyalty of the aliens, and probably all without a city would covet the right of settling in Athens, and would increase our revenues…. If, moreover, we granted the resident aliens the right to serve in the cavalry and various other privileges which it is proper to grant them, I think that we should find their loyalty increase and at the same time should add to the strength and greatness of the state.33

Xenophon did not take wealth and prosperity in the context of a zero-sum game,34 as was common at the time, but in the relatively modern sense of common gains from trade. Increased trade activity by foreigners brings benefits to all of Athens; foreigners are not getting rich at our expense but are on the contrary enriching their environs. Therefore, he proposed approaching the stimulation of foreign trade and investment:

It would also be an excellent plan to reserve front seats in the theatre for merchants and shipowners, and to offer them hospitality occasionally, when the high quality of their ships and merchandise entitles them to be considered benefactors of the state. With the prospect of these honours before them they would look on us as friends and hasten to visit us to win the honour as well as the profit.35

Xenophon reveals himself to be a highly talented and forward-thinking economist who takes into account human motivation and the businessman’s desire for the feeling of being exceptional, which frequently plays a role in today’s economies as well.

From the point of view of contemporary economics, Xenophon’s theory of value is also very interesting; modern economists would label it the subjective theory of value. Its essence is probably best seen in the following excerpt from Xenophon’s text of an imaginary conversation between Socrates and Critobulus:

“We now see that to persons who don’t understand its use, a flute is wealth if they sell it, but not wealth if they keep it instead of selling.” “Yes, Socrates, and our argument runs consistently, since we have said that what is profitable is wealth. For a flute, if not put up for sale, is not wealth, because it is useless: if put up for sale it becomes wealth.” “Yes,” commented Socrates, “provided he knows how to sell; but again, in case he sells it for something he doesn’t know how to use, even then the sale doesn’t convert it into wealth, according to you.” “You imply, Socrates, that even money isn’t wealth to one who doesn’t know how to use it.” “And you, I think, agree with me to this extent, that wealth is that from which a man can derive profit. At any rate, if a man uses his money to buy a mistress who makes him worse off in body and soul and estate, how can his money be profitable to him then?” “By no means, unless we are ready to maintain that the weed called nightshade, which drives you mad if you eat it, is wealth.” “Then money is to be kept at a distance, Critobulus, if one doesn’t know how to use it, and not to be included in wealth.”36

It can be seen in Critobulus’s example with the flute that Xenophon was aware of the further essential distinction between value in use and value in exchange,37 on which Aristotle, John Locke, and Adam Smith would later base their theories.

We will stay with Adam Smith for a moment. One of his greatest contributions to modern economics was the

analysis of the division of labor and the increasing importance of specialization for the development and rationalization of production processes. Xenophon took note of the importance of the division of labor more than two thousand years before Adam Smith. He also put it in the context of the size of the community where this division takes place.

In a small city the same man must make beds and chairs and ploughs and tables, and often build houses as well; and indeed he will be only too glad if he can find enough employers in all his trades to keep him. Now it is impossible that a single man working at a dozen crafts can do them all well; but in the great cities, owing to the wide demand for each particular thing, a single craft will suffice for a means of livelihood, and often enough even a single department of that; there are shoe-makers who will only make sandals for men and others only for women. Or one artisan will get his living merely by stitching shoes, another by cutting them out, a third by shaping the upper leathers, and a fourth will do nothing but fit the parts together. Necessarily the man who spends all his time and trouble on the smallest task will do that task the best.38

In many ways, Xenophon was ahead of his time and its greatest thinkers. As Todd Lowry writes, “Plato should have had no idea of that connection between the size of the market and the degree of division of labor which Adam Smith was to make famous. Plato’s contemporary, Xenophon, however, who gives in his Cyropaedia a similar account of the division of labor, seems to have gone a little further in his appreciation of the nature of private exchange, for he distinguishes between the big cities in which division of labor is developed and the small cities in which it hardly exists.”39

Limits of Future and Calculating Xenophon, this brilliant economist, who among other things dealt with the issue of utility and the maximization of yield,40 also clearly set limits for his analyses. He was very modest about the possibility of predicting economic success or failure at a time when agriculture played a much more essential role in the economy than it does today. According to this ancient economist, “in husbandry a man can rely very little on forecast. For hailstorms and frosts sometimes, and droughts and rains and blight ruin schemes well planned and well carried out.”41 At the same time he showed awareness that economic events must be placed in cultural contexts, and that as a subject of analysis they can never be entirely separated from the real world, which is governed not only by the laws of supply and demand.

In On Revenues Xenophon closes with the words that in various forms we know from history as the Conditio Jacobaea,42 a kind of opposite to today’s economic mantra, ceteris paribus (all other things being equal): “[I]f you decide to go forward with the plan, I should advise you to send to Dodona and Delphi, and inquire of the gods whether such a design is fraught with wealth for the state both now and in days to come.”43 According to Xenophon, not even the best economic advice and analysis can contain all the relevant factors, whether they’re called the will of Heavens or animal spirits or anything else.

Xenophon dealt with a very wide scope of economic considerations. His ideas include work with such phenomena as, for example, the relation between employment and price,44 innovation,45 and “state” infrastructure investment.46 As we have seen above, he deals in detail with specialization, offers a lot of advice on both the micro and macro levels, examines the favorable effect of incentives for “foreign investors,” and so on. To a certain extent, it could be said that his economic scope is wider and in many ways deeper than Adam Smith’s considerations.

And lastly, one final thought to which we will return later: Xenophon’s reflection on the satiability of real desires is interesting, but more so the insatiability of the abstract, monetary ones (as expressed in silver at the time): “Neither is silver like furniture, of which a man never buys more when once he has got enough for his house. No one ever yet possessed so much silver as to want no more; if a man finds himself with a huge amount of it, he takes as much pleasure in burying the surplus as in using it.”47

PLATO: BEARER OF THE VECTOR

Socrates and Plato48 are undoubtedly among the founders of our culture’s philosophical tradition, and to a certain extent they demarcated and essentially formed the boundaries of the entire discipline for thousands of years to come (and it is still a question whether we will ever get beyond their framework). With Socrates, his student Plato, and Plato’s student Aristotle, these three generations’ ideas started questions and disputes that continue in our civilization to this day.

We are still not clear on whether or not to give preference to the rational or the empirical, whether the Platonic ideal exists, or whether all structures are a human creation, as Aristotle argued. It was the ancient Greek tradition

that endowed us with the heritage of this eternal search; no such duality was created in the Hebrew or Sumerian traditions, for example. “Know thyself,” the sentence which Alexander Pope ironizes in his own way, was carved into the Temple of Apollo at Delphi. And the same phrase returned to us in the popular film The Matrix: It hangs above the Oracle’s door right in the first part, and it summarizes the message the Oracle has for the hero, Neo: “Know thyself. I can’t tell you anything about you.”

In a Cave of the Real Plato plays a huge part in the way we think today, which questions we ask, and how we answer them. The second legacy, which is key for us, is the idea of abstraction from the world. In reference to Parmenides, Plato strengthens the rational tradition, founded on the idea that the world is best known through reason. In his best-known parable of the cave, he lays the foundation for a completely different perception of the world: This world is not the main world but a world of shadows, a secondary world. “It follows by unquestioned necessity that this world is an image of something.”49 Plato thus opens the door to a nearly mystical reticence toward this world, to asceticism, and to the beginnings of faith in abstract rational theories. The truth is not clear, is not before our eyes but is instead hidden. And rationality is the path to this (unchanging) truth. The very first topic of the later ancient Greeks was getting rid of variability and irregularity. The goal was to cut through the confusing and variable empirical world toward unchanging and constant (therefore “real”) rational truths.

But back to the parable of the cave. In it, Plato describes a prisoner who lives his entire life bound in a cave and who does not see real things but only their shadow reflections on the walls. He considers these to be real, studies them, and learnedly discusses their essence, even without having any idea of the existence of something else: “the prisoners would in every way believe that the truth is nothing other than the shadows of those artifacts.”50

These “experts” are guessers of shadows. With this, Plato probably wanted to say that empirical phenomena only appear and do not capture the essence of things, reality, which can ultimately only be approached through abstract considerations and model rationalizations. For enlightenment, we must be freed of the bonds that connect us to this empirical world, step out from the cave,51 and see things as they really are. A person who could would gain his vision after being blinded by the light when leaving the cave, and see real things, the way reality really is “he’d be pained and dazzled and unable to see the things whose shadows he’d seen before.”52 If he were to go back to the cave (which to me appears to be the main message of the parable) and tell the prisoners who were accustomed only to their shadows about real things, they would not believe him and would not accept him. This fate, for example, awaited Plato’s great teacher Socrates.53

Invariability was the leading light for Plato. He tried to draw attention away from variable (and therefore ephemeral) things or phenomena. According to Plato, the tracks of truth (or if you prefer, the structure, the equation, or the matrix)54 of this world lie somewhere deep within us, where they are written even before we are born. If we were to search for them, it would suffice to turn to our own interiors. Searching for truth in the outside world is misleading and distracting, because it leads us to a path of following and examining shadows (the path Aristotle apparently took; see below). It is possible to take in real things—but not with our eyes or other senses, which can be fooled—but through reason.55 Popper summarizes Plato’s key teaching in the following manner: “He believed that to every kind of ordinary or decaying thing there corresponds also a perfect thing that does not decay. This belief in perfect and unchanging things, usually called the ‘Theory of Forms or Ideas,’ became the central doctrine of his philosophy.”56

Thus the rationalist tradition was founded, which eventually gained an important standing in economics as well. It is precisely this logic, which tries rationally to uncover the principle of reality and forms model behavior. The tendency to fit the “real” world into mathematical models and exact, constant, valid-here-and-everywhere curves is noticeable in economics to this day.

But it is important to say here that Descartes, generally considered to be the founder of modern science, ties into Plato: He does not search for the truth in the outside world, but in interior meditation, looking inside oneself, freeing oneself from the fooling of the senses, memory, and other sensations or their records. Descartes found the truth by way of dreaming, freed from the (disappointing) senses, alone with his rationality. Descartes will play an important role in our story, and we will get to him later.

Myth as a Model, Model as a Myth According to Plato, a hierarchy of being and a hierarchy of knowledge exist, knowledge of ideas rests at the top, while at the bottom lies knowledge of trickery, illusions, shadows dancing on cave walls. By the way, mathematical knowledge is not in the highest position; philosophical knowledge is. Mathematics can’t describe the whole truth— even if we were to describe the entire world in precise mathematical equations, we would not have full knowledge.

(More on this in the final chapters.) Incidentally, the ability to describe the functioning of things still does not mean that we understand the given relationship.

This is why Plato uses myths and considers them as a potential means of discovering the truth. The fuzziness (they are not exact) of myths is a strength, an advantage, not a disadvantage. As a form of expression, myth has a much larger “frame” or reach than the “exact scientific” or mathematical approach. Myth reaches places where science and mathematics cannot, and it can contain the dynamics of a constantly changing world. What is interesting is that a modern person has the opposite tendency: to take his assistance from mathematics or other precise methods if he is heading out to the difficult places where senses cannot tread. The word method (meta-hodos) means “along the way,” but also “beyond the way.” Method should be a guiding light for a (frequently erstwhile) precise approach to avoid getting lost, or losing one’s way in this mental exercise, which goes so far that the natural light of our intuition or of our sense experience is not enough.

Myth is of course an abstraction—a model, a parable, a story (even if a mathematical one). Perhaps these concepts can be joined together if we approach it differently and suggest that science creates myths around these facts, namely, its theories. We do not see facts physically; we see that which we interpret to be their expressions. In the end, we all see the sun “rise”—but why, how, and for what purpose is up for interpretation. Here is where the story, the narrative, comes in.

According to Plato, the secrets of the world can be understood only through the construction of a “higher order,” which is something of a metanarrative, or a generally accepted myth, an archetype, a civilizational story or model, or, if you prefer, a matrix (the matrix), which lies above us (or in us?). Above the lower constructs stand philosophical truths—forms derived from the utmost ideas of Good. According to Plato, the functionality of mathematical definitions and derivations from them is guaranteed, because they exist beyond us and we gradually reveal it—we do not shape it. Models reveal the invisible laws of being.

It would appear that Aristotle’s view of this principle of abstraction fundamentally differs: “Reflecting a fundamental disagreement with Plato, Aristotle argued that ideas do not exist independently, but that ‘universals are reached from particulars.’”57 Of course, one possible reading of Aristotle could be that the abstract construct does not stand beyond us, one we can not only come to understand (the notion that we approach it closer and closer as our knowledge grows), but we (co)create it.

The contemporary economist Deirdre McCloskey at the same time finds the intercept point of the foundations of mathematics and religion in Plato’s good, in the faith in God as a principle of all things:

The mathematicians Philip Davis and Reuben Hersh note that ‘underlying both mathematics and religion there must be a foundation of faith which the individual must himself supply.’ Mathematicians, they observe, are practising neo-Platonists and followers of Spinoza. Their worship of mathematics parallels the worship of God. Both God and the Pythagorean theorem, for example, are believed to exist independent of the physical world; and both give it meaning.58

Religion in the Platonic world59 is not mutually exclusive with mathematics and science; instead they complement each other—they mutually require each other. Standing behind both is faith in some principle that watches over all and without which one or the other does not make sense.60 In the words of Michal Polanyi, the twentieth-century philosopher, even science is “a system of beliefs to which we are committed.”61 “Faith is not an attack on science or a turn to superstition”;62 on the contrary, faith stands at the foundations of all science and all knowledge, for example, the elementary faith that the world is knowable. Myth, a faith in something unproven which we even sometimes know is not real (assumptions in economics, for example), starts to play a role as a superstructure.

Here the question arises about how much of economics is mythmaking; respectively, how many myths does it need or draw from? Economics considers itself to be in the best position to interpret the social world of our time, but we are finding that it needs myth for this role. Economics uses myth in several regards or several ways. First, it draws from myth in its assumptions (the unconscious use of myth), and second it creates myths and stories. The model of homo economicus is such a myth-model. That a story is told by clouding it in mathematical fleece changes nothing about its mysticism. As an example, take the myths and stories about the complete rationality and assumptions like perfect information, or the invisible hand of the market, but also the story of human freedom and self-determination, or the myth of eternal progress or self-balancing markets. Nobody ever saw any of these, but they are stories, faiths, or myths that strongly resonate (not only) in economics. And our disputes, experiments, and statistics lead to the confirmation or overturning of these narratives.

There is nothing derogatory or shameful about myths. We cannot exist without faith in the unproven. But one must admit it and work with it as such. Only a myth can be set against another myth. Myth does not lead a fight with

empiricism, with the real world (which revels in a large number of myths), but with other adepts at explanation, with other myths.

The Greeks did not take their myths “literally,” they were acknowledged as myths. And as Sallust writes about myth, “Now these things never happened, but always are.”63 We know, as well as our ancestors knew, that we speak here of myths, fictions—not “realistic,” literal images or representations64 of “objective” reality (even if one happens to believe that there is such a thing).

Now, this may seem a little strange to us, but we do exactly the same thing today. The question is placed before economists: Do we truly believe in our models? Do we believe that man is truly rational, narrowly egoistic, that markets regulate themselves and that the invisible hand of the market exists, or are these just myths? Both answers are possible, but then we must not get them confused. If we say, perhaps together with Milton Friedman,65 that models and their assumptions are unrealistic66 —for example, the assumption that man is rational—then we cannot say or create ontological-theological conclusions that man is truly rational in reality. If our models (whether in assumptions or conclusions) are admitted fictions (useful or not), then they do not imply anything about man.

On the other hand, if we think that our models are realistic, then we believe in our model-myths. And we are in the captivity of an undeclared myth even more than our archaic predecessors. The ancients took their myths with a grain of salt; they were useful fictions for them, abstractions, stories that never actually happened, but were useful for explaining things, for humans’ orientation in the world and frequently also for practical activity.

Economists must decide; both are not possible.

Flee from the Body and Its Demand Plato had no, or very little, regard for the body. Plato calls bodily pleasures “so-called pleasures”67 and “it is the body and the care of it, to which we are enslaved.”68 The body is the seat of evil, and its pleasures deceptive: “As long as we have a body and our soul fused with such an evil, we shall never adequately attain what we desire.”69 As if all evil came from the body: “Only the body and its desires cause war.”70

The body is an obstacle; if the soul “attempts to examine anything with the body, it is clearly deceived by it … soul reasons best when … it is most by itself, taking leave of the body as far as possible, having no contact or association with it [body] in its search for reality … Then he will do this most perfectly who approaches the object with thought alone.”71 The soul is better off without the body, the body is just a nuisance: “It seems likely that we shall, only when we are dead, attain that which we desire and of which we claim to be lovers, namely wisdom, as our argument shows, not while we live …. While we live, we shall be closest to knowledge if we refrain as much as possible from association with the body and do not join with it more than we must, if we are not infected with its nature but purify ourselves from it until the god himself frees us.”72

It is precisely this conception of cutting off the demand side that early Christianity ties into, to a certain extent, especially the Apostle Paul and, later, Augustine. Augustine’s conception of the body as a prison for the soul (see further) sounds in this context like an addition to the aforementioned Plato citation. “Physicality” and care for the material becomes the antithesis of the superior spiritual, the physical is disdained and suppressed, and material things are marginalized. The implications for economics offer themselves. Ascetic societies, which compared to our own hamper demand for possessions, can never develop into a high stage of specialization. Ascetic societies, whose individuals demand only the absolute minimum of possessions, can never be able to achieve high material prosperity (and would not have cared about it). In the end, not even economics, a field that takes interest and care especially of demand of the bodily pleasures (i.e., especially satisfaction of the unessential needs which are not necessary for life), would most certainly not develop into the forms we know today. For economists, the condemnation of physical pleasures—utility—has a clear meaning. The ideal is not found in consumption and producing assets, but in breaking free of both. In this, Plato is a staunch Stoic, as we will see later.

Since the time of Socrates, a broad discussion on this topic has been under way: “Callices seems to attach a positive value to the very having of these appetitive needs: for Socrates’s claim that those who need nothing are living well (are eudaimón) fills him with distaste. ‘In that case,’ he replies, ‘stones and corpses would be living superlatively well.’”73

Ultimately, not even Socrates can manage to control his erotic needs, and even he is torn between his erotic and philosophical desires. The erotic love affair with Alcibiades was not actually in Socrates’s control. Nevertheless, it was the tradition of the Stoics to avoid ties that were random and uncountable, which tends to be the case with ties to the material world or relations overall.

And as far as the supply side goes, Plato took a very distant stand toward it as well. Manual labor, production, smelled of uncleanliness and was suitable only for the lowest class of people or, even better, slaves. The ideal was found in intellectual and spiritual contemplation—in self-knowledge, where the answers could be found, the key to

truth, which means therefore also to a good, happy life.

Demand versus Supply: Freedom and Discrepancy Today we believe that a person is freer the more property he has. The Stoics had it exactly the opposite: The fewer things one was dependent on, the freer he felt. Thus it is here from which calls for freedom from the wants (demands) of the flesh come. The best-known example of such liberation and getting rid of dependence on the world was Diogenes, who minimized his demand and threw away everything he did not need—including one of his last things, a jug, because water could be drunk with just one’s hands. The program of the Stoics was therefore clear: Let’s cut demand for possessions, and with this we will be able to decrease our supply side, or labor. He who gets by with few things is satisfied with few things. He who needs only a little does not have to toil as much. If a discrepancy exists between supply and demand (which is probably the default state of the human psyche), then for the Stoics the prescription for a happy life was to decrease demand, not to increase supply (or production), which the Hedonists saw as the prescription for a happy life.

Ideal Society: Politics and the Economy Plato and Aristotle have in many ways defined the discussion space to this day. This is also true for questions of the functioning of society and on which foundations human coexistence stands. “Samuelson in Economics was implicitly addressing a question as old as the debates between Plato and Aristotle—when is self-interested behavior acceptable in society and when should individual behavior be directed to the realization of a broader good of society?”74

The area that is essential for our topic is Plato’s economic-political teachings, even though there are disputes to this day about his interpretations, and Plato invited some criticism for them. For example, Karl Popper (but others as well75) charges Plato with becoming the inspiration, in The Republic, for all utopian thinkers and even of communism.76 “Both Plato and Marx offered a vision of ‘apocalyptic revolution which will radically transfigure the whole social world.’”77 Marx himself directly referred to Plato; in Das Kapital there are frequent references to him.78

For Aristotle, man was a social creature, “zoon politikon.” But not for Plato. In Plato’s conception, we are just (good) citizens of society because it pays for us to be, not out of our nature, as Aristotle was to later argue. “The second line of argument for a stable social structure is the rational self-interest of the individual members of the city. The Platonic argument is that individuals know that their best interests are served by rational decision-making. The conclusion is, for Plato, quite obvious. Any intelligent person will welcome the supervision and guidance of those more skilled and more intelligent.”79

Plato divided society into three layers representing the various sets of human qualities—the class of rulers represents reason, the class of warriors embodies courage, and the class of craftsmen represents sensuality (which Plato considered the lowest). The ruling classes did not know private property, their own interests, or even their individuality. This stems from Plato’s negative conception of private property—the higher classes should not entertain such (earthly) affairs at all; they should take care of the whole. The ruling elites take neither wives nor husbands. Reproduction is ensured almost clinically, and the raising of children was entrusted to special civic institutions. The elite class of rulers was to have applied itself to the purest possible philosophy, of course in a more radical way than where today’s concept of the enlightened philosopher-ruler reaches. “The Republic also argues that the best life is a life ‘ruled’ by reason, in which reason evaluates, ranks and orders alternative pursuits.”80 Rulers were to have submitted to the impartial search for ideas and the “mystical vision of the absolute,”81 not just issues of the state. In short, with regard to the desires and needs of the human body, Plato was “according them no positive value at all.”82 As in George Orwell’s famous novel 1984, things such as property or family or similar earthly hurryings were only appropriate for the proletarian class.

It appears that, according to Aristotle and contrary to Plato’s view, it is unrealistic for ruler-philosophers not to desire property. “Aristotle found the proposals to abolish private property—such as Plato had made for his guardian class—failed to take account of the natural propensities of men.”83 A major difference between the outlooks of Aristotle and Plato on human nature can be found in this disagreement. For Plato, the corrupting tendency of property and its tendency to lead man away from what is truly important (getting to know the world of abstractions) plays a fundamental role. Aristotle instead points out the positive motivations that stem from desires for material security. “If the writings of Aristotle encouraged worldliness, optimism, practicality, common sense, empiricism, and utilitarian outlook, the writings of Plato proved more likely to lead to withdrawal, pessimism, radicalism, revelation, and an ascetic outlook.”84

As a citizen of educated Athens, Plato is a great admirer of Sparta, a “totalitarian” military state. Physical labor, as merely procurement and satiation of needs, in his vision is left to the sphere of working people. This lowest societal class can own material assets, can indulge in family life and have their own children, while leaders and soldiers live communally and completely without private ownership.85

Plato sees the principle of decline in the rampancy of requests and treats them through a new establishment of hierarchy—the philosopher rules to the benefit of the whole, leads to the moderation of all walks of life, and himself owns nothing. The higher one stands, the less he owns in private ownership. Progress is found in non consumption, just as in non -production. So Plato calls for or counts on the voluntary moderation of the ruling class and overcoming the tendency to gather up assets, which for many economists could represent a similarly tough problem as the later medieval appeals to asceticism (as presaged by Plato).

Progress At the same time, Plato’s vision of an ideal state casts light on his vision of social progress. According to Plato, it is not enough to be oriented toward social events and the direction of society as a whole only by generally accepted principles. Society needs regulatory ideas, goals that it may take guidance from. Of course, Plato’s vision of a society in which children have as their parents all of the citizens as a collective and who are brought up by the state under the leadership of a philosopher without property is not a call for the immediate and brutal establishment of such order. It is an ideal86 that should pull society from its kinship nepotism and relationships twisted by blood ties and rather toward an order where everyone has the same opportunity to display their qualities without the burdens of familial background; on the basis of this they can be sorted through the most appropriate possible means to a place in society, and therefore most beneficial to themselves.87

Leaders in Plato’s ideal society resist corrupting temptations that draw them away from their search for a higher good. This is not only about property but about sex as well. As Robert Nelson writes: “Sexual ties also, as both Plato and the Roman Catholic Church recognized, could create powerful feelings of individual possessiveness, perhaps deeper even than the ownership of private property. Plato’s solution in The Republic was to remove the possessive element by abolishing marriage and other limits on free sexual expression, further establishing common ownership of children (the mother should not know the identity of her child). More pragmatically, the Roman Catholic Church took the opposite track, requiring its priests and nuns to be celibate, seeking to ensure that their highest loyalties were not to another person but to God and the Church.”88

Man needs more than learnedness to lead the right life; he needs to be visionary to be able to move from his place. For this reason, society needs philosophers as leaders, people who can see ideals and mediate the surveyed “cosmic” order to others. Abstraction mediated by the governing elite leading the entire state should then be a benchmark for the orientation of everyone’s everyday actions. The word “elite” itself has its origins in “eligo,” meaning released. From here comes the elite as a group of released, selected for the service of the common good. The entire Republic is pulled by the harmonization of three levels: the cosmos, the community, and man. And harmonization takes place by the lower classes adapting to the upper classes. Without ideas and vision, no pragmatic decisions can take place. The vision of the whole, not just the general rules of the game, should govern our acts and become the motor of social progress.

It is worth noting that the social upbringing of children could have other important goals related to the idea of progress: the reduction of contingency. “Socrates argues that really decisive progress in human social life will be made only when we have developed a new techné, one that assimilates practical deliberation to counting, weighing, and measuring.”89 From this angle, the whole history of men and our civilization is “a story of gradually increasing human control over contingency.”90 The reduction of contingency and the growing development of mathematics and measurement, according to Plato, led to man ridding himself of the rule of passion and control over the fate of himself and his community as such. The probability that randomness would set progress back is therefore much lower.

As we will show in the practical example below (from Plato’s dialogue Timaeus), Plato believed, as did the Hebrews, in a shining past and in decline as an expression of civilization’s progress, as Popper summarizes nicely: “All social change is corruption or decay or degeneration. This fundamental historical law forms, in Plato’s view, part of a cosmic law—of a law which holds for all created or generated things. All things in flux, all generated things, are destined to decay.”91 Nevertheless, “Plato believed that the law of historical destiny, the law of decay, can be broken by the moral will of man, supported by the power of human reason.”92 In this sense, he introduced a scientific program that was to reopen a blissful state for people. With this, Plato gave Europe a program for progress: science.

City, Civilization, and the Golden Age The city, the community, is a symbol of progress in ancient Greece, even if in a somewhat different conception than we have witnessed in the case of the Sumerians or the Hebrews. Good and evil come from human beings; wildness can no longer be pointed to as the home of evil. And it would be this way for the rest of our civilization. At the same time, the ancient community undoubtedly tied their development to the order in the state. For Plato and Aristotle, the philosopher is important as part of the hoped-for harmony with the cosmos, because such harmonization could be found, and they could advise people and communities on how to assimilate to such an order. Even such a secular affair as the arrangement of the city-state was subordinate to the philosophy of seeing the cosmos.

What are interesting are also the parallels between the populace who live in cities and those in the country. Those who lived outside the city were uncivilized; they did not know how to either read or write. At the same time, this conception corresponds to how these “simple people” (the people who still knew somewhat how to live in uncivilized harmony) were outside the wrath of the gods: “Whenever the gods send floods of water upon the earth to purge it, the herdsmen and shepherds in the mountains preserve their lives, while those who live in the cities, in your region, are swept by the rivers into the sea…. It sweeps upon you like plague, and leaves only your illiterate and uncultured people behind. You became infants all over again,” Timaeus says in Plato’s eponymous dialogue.93 Here as well we encounter the idea that civilization, culturing, the growing up of the human child, takes place in cities. Here we also find parallels with the “human child,” who probably still does not have the conflict between good and evil internalized (accustomed), and as an animal (or a child) who “does what he wants,” has no internal, only external (natural) limits. This seems to have been a time when man was in harmony with “the simple ‘I want’ of one’s animal nature,” as Joseph Campbell writes.94 It seems to have been a time when one’s “I want” was in perfect harmony with “I should,” which later became disjointed.

Nevertheless, here as well there is an interesting overlap that we also see with other Greek classic works—the idea that the primordial race was better: “Second, you are unaware of the fact that the finest and best of all the races of humankind once lived in your region. This is the race from whom you yourself, your whole city … are sprung, thanks to survival of a small portion of their stock.” This ancient race was superior, even though for “many generations the survivors passed on without leaving a written record.”95 These “ancient citizens” thus knew no technai, didn’t even read or write, yet they lived in harmony96 as if not yet “cursed” by the “gift” of Prometheus. The idea of progress was, in this case anyway, an idea of decay. Our predecessors were not savage apes but a superior race. Later on, people became more cultured, more “adult,” and moved to the city, which is seemingly more shielded from the whims and changes of nature. But even there people are not shielded from the wrath of the gods; on the contrary, it is this city civilization that is often visited by floods97 and other curses. It is the hills, the uncivilized parts of earth where people are safer, as can be seen in the story of Sodom and Gomorrah in the Bible.98

The topic of “blissful ignorance” and the trade-off between harmony on the one hand and technical advances on the other appear quite frequently in Greek thought. People have been cast out, disconnected from their natural state, and now they work to earn their way back—to try to approach a more blissful state.

ARISTOTLE We could present Aristotle as one of the first rigorous and systematic scholars—“Parmenides and Plato’s Socrates compare themselves to initiates into a mystery religion. Aristotle’s philosopher, by contrast, is what we might call a professional human being”99—and perhaps even the first rigorous scientist. His moral teachings are in this sense absolutely primal religious references or arguments (as opposed to Plato, in whose case we could be witnesses to a sort of transitional state between myth and analysis). The pre-Socratics used aesthetics and mnemonics (such as rhythm and rhyme) as bearers of truth. Plato sought the truth in dialogue and abstraction, and to a certain extent an emphasis on fantasy. The argumentation and style of Aristotle’s writings are in no way different from today’s narrative scientific discourses. It was Aristotle who was the first to begin acting like a scientist in today’s meaning of the word.

His understanding of philosophy and science were, despite this, much wider than we understand it today. First, he did not strictly distinguish science from philosophy (as happened later), and second, he classified things as science that we probably would not so classify today. For Aristotle, “all science (dianoia) is either practical, poetical or theoretical.”100 He included poetry and practical fields into science. By practical science, he means ethics and politics; by poetical science, he means the study of poetry and the other fine arts; by theoretical science, he means physics, mathematics, and metaphysics. The majority of his scientific work was qualitative, not quantitative, and to him mathematics was very close to theoretical philosophy and metaphysics.

It was Aristotle who, figuratively speaking, brought earth to the center of attention. It was he who argued that “we

need philosophy to show us the way back to the ordinary.”101 Instead of having his head in the world of ideas, he swam with the fish on the island of Lesbos, observing the behavior of octopii and animals in the forest. He argued that the form of an apple exists in the apple, not in the world of ideas. For this reason he examined apples and in general classified all creation into genii and species. He was what we could call today an empiricist, while Plato would be classified today rather as the beginning of the rationalist tradition.

All of this was surprising for its time, “unnatural” to the point of being irritating, and occasionally met with resistance. “Aristotle’s audience seems to have rebelled against his taste for the ordinary and the worldly, demanding instead the lofty and rarefied concerns.”102 And so earthly things as presented by Aristotle get attention, and the world of Platonic ideas is somewhat pushed to the shadowy background. Aristotle devoted his attention to precisely the things that for Plato—grandly stated—were shadowplay. This is how “strategy, economics, rhetoric” got the same attention as “even the most highly esteemed of capacities.”103

If we were to summarize Aristotle’s teachings in a few sentences, then aside from his groundedness, we would have to mention his sense for the purpose of things, telos. As opposed to Plato, he did not examine invariability as much but concentrated on the sense, the goal of movement, because “wish is for the end.”104 Similar to other ancient schools (moreover the same as with the Hebrews and Christians), he places a major role on morals (specifically on the ethics of virtue, which today is being rediscovered105), and the good life is unimaginable without the study of good and evil.

To present a practical example: Aristotle explains the falling of material things toward the ground as their nature. The stone comes from the earth and wants to return there; its meaning is to be on/in earth. This is similar to gas, fire, or the soul wanting to go upward. This explanation sufficed for a long time, until it was replaced by Newtonian gravitation.

The history of economic thought in many textbooks actually starts with Aristotle. It was he who defends private ownership, for example,106 criticizes usury,107 distinguishes between productive and unproductive economic activity,108 categorizes the role of money,109 notes the tragedy of the community’s commons,110 and deals with the issue of monopolies.111 Nevertheless, here we want to focus on those of his observations that were key for the development of the economy but have not been much elaborated on by economists. For example, Aristotle deals in depth with utility and its role in life, deals with maximization functions, which economics to this day is obsessed with (the only difference being that today we consider them only in their mathematical form, which frequently conceals deeper philosophical discussion), and other key areas we would today call meta economics, or that which goes far beyond “household management” and asks about the meaning and purpose (telos) of these efforts.

Eudemonia: “Happiness Being a Sort of Science” Aristotle asks about the things probably everyone is interested in: How to live a happy life? What does it mean for a person to live in such a way as to achieve the life we all desire? A question of happiness—eudaimonia—is far from theoretical: “the present inquiry does not aim at theoretical knowledge like the others (for we are inquiring not in order to know what excellence is, but in order to become good).”112 His second book on ethics, Eudemian Ethics, starts in a similar way to Nicomachean Ethics: How to acquire a good life, for “happiness is at once the most beautiful and best of all things,”113 as he states right in the first paragraph of the book. How much a blissful life is bound with good and how to achieve it (“happiness being a sort of science”114) is something we will present below.

First, it must be said that Aristotle sees private good only in the context of good for the society as a whole. He is famous for his statement that “man is by nature a political animal.”115 In addition, he did not attribute a mechanistic character to society, as was later taken up in economics, but rather an organic one: Without the rest, one part not only makes no sense at all, but mainly it cannot live.116 At the same time, man does not associate into societies for his benefit, but because it is in his nature.117

Utility is nevertheless a complicated thing, and it is constantly transforming. The question is: What has an essential influence on utility? Aristotle does not see utility as something that exists for a moment and is then gone, but as a state that man can but does not have to be aware of. He also notes that there is something of a hierarchy of utility, as if to say that we will not perceive utility from higher needs unless basic (natural) needs are fulfilled. He also notes that pleasures mutually crowd each other out: “activities are hindered by pleasures arising from other sources … the more pleasant activity drives out the other … e.g., in the theatre the people who eat sweets do so most when the actors are poor.”118

MaxU versus MaxG Whether or not man does everything because he is maximizing utility, pleasure, is to a large degree a nonsensical question for Aristotle. Pleasure, according to him, only “completes activity,” which he repeats many times. “But

whether we choose life for the sake of pleasure or pleasure for the sake of life is a question we may dismiss for the present. For they seem to be bound up together and not to admit of separation, since without activity pleasure does not arise, and every activity is completed by pleasure.”119 The term “pleasure,” however, is not inseparably joined with the concept of perfection and good: The highest pleasure in the most perfect activity, pleasure is just a reward, an onus—“Pleasure completes the activity.”120 Pleasure is not the purpose; goodness and perfection are. Pleasure therefore is something like the cherry on top of perfection and the activities pointing to it.121 It is not the meaning of activity, but its accompanying expression. The purpose of activity (telos) is good.

In today’s economics, we are somehow automatically used to the command MaxU, where man maximizes utility. There are tens of thousands of mathematical exercises that maximize utility functions, optimize utility and derivations seeking marginal utility, or balance marginal utility with marginal price, respectively profits with costs. In the vast majority of cases, however, we do not realize at all the astounding philosophical and ethical storm raging under those columns.

The concept of utility as good (and therefore also as a goal) was one of the main cores of the dispute between the Epicureans and the Stoics. Like Plato, Aristotle was closer to the Stoics. At the same time, Aristotle knew a sort of precursor of the maximization function. But instead of utility, he maximizes good, MaxG.

Right in the first sentence of Politics, he says:

[E]veryone always acts in order to obtain that which they think good.122

This is similar to the first sentence of the Nichomachean Ethics:

Every art and every inquiry, and similarly every action and choice, is thought to aim at some good; and for this reason the good has rightly been declared to be that at which all things aim.123

He goes into greater detail on the term “pleasure” in the tenth book of Nicomachean Ethics. This book starts with the following sentence: “[W]e ought perhaps next to discuss pleasure. For it is thought to be most intimately connected with our human nature … men choose what is pleasant and avoid what is painful.” Yes, this sounds like an introductory economics textbook. But Aristotle continues: “For some say pleasure is the good, while others, on the contrary, say it is thoroughly bad.”124

When, for example, at the end of Nicomachean Ethics he has a dispute with the hedonist Eudoxos, who “thought pleasure was the good because he saw all things, both rational and irrational, aiming at it,” he tells him: “This argument seems to show it [pleasure] to be one of the goods, and no more a good than any other.”125 Aristotle does not deny that pleasure is part of good, but it is not in its identity, as the Hedonists argued.

To this day, economists still have to deal with a question similar to the one Aristotle asked: “[B]oth the general run of men and people of superior refinement say that it is happiness, and identify living well with and faring well with being happy; but with regard to what happiness is they differ.”126 To this day, you can drive economists mad with the same question: “If people maximize their utility, what is the term ‘utility’ understood to mean?” That is a more complicated question than it may appear, and we will discuss it later, in the second part of the book. We will be very brief here.

Along with Aristotle we can argue that man in reality does not maximize his utility, but that he maximizes good. Man simply does what he considers good. And doesn’t everyone imagine something different under the term “good”? Yes, and that is the point: The same is also true for utility. If we take Aristotle’s point of departure seriously, that “everyone does everything for the sake of what they believe to be good,”127 then it is possible that utility is only a subset of “that which we consider good.” We get no utility from certain things (or very halting and clumsily defensible), we would be speaking more simply if we said that a given person did something because he considered it to be good, instead of saying “for maximizing his or her utility.” It might be much more natural to say that Francis of Assisi gave away all of his possessions because he considered it good, not for utility; that Socrates decided not to renounce his teachings and run away but to drink poison, not because he expected utility after death, but because he considered it good. MaxG is therefore more defensible and, what’s more, a more useful concept than MaxU.

Utility of Good and Evil If we make this alteration, we can already see how tightly bound our perceptions are with the economics of good and evil. It is hard to imagine that a person would voluntarily and freely do something that he considers at a given moment to be completely evil. If a person steals, for example, they do not steal for stealing’s sake (which they themselves would certainly consider to be evil) but, for example, to get richer, which they consider good. The goal is

not to steal but to have more money. Ultimately we could hold a similar discussion with the assumption of MaxU.128 Why does a person steal? Because it increases their utility? Never. They do not steal for the stealing itself but because it has utility from getting rich, for example. Or adrenaline or revenge. But whatever the reason why a person steals (or carries out other crimes), they do so for some good (therefore the goal of telos, which they see behind it).129 MaxG can therefore explain the same things as MaxU, but in addition is able to explain the wider context of these actions. If we want to consider the theorem of MaxG as absurd (and to a certain extent it is, because it cannot be refuted, as we will see in the second part of the book), then the theorem of MaxU must also be absurd. Except that the absurdity of MaxG appears to be more visible. Maybe because of this, economics hides behind MaxU: so that the trick isn’t so visible.

That we do not do things with the goal of momentary and unilateral MaxU, which Aristotle considers in the term “pleasure,” will be shown in the following example: “And there are many things we should be keen about even if they brought no pleasure, e.g., seeing, remembering, knowing, possessing the excellences. If pleasures necessarily do accompany these, that makes no odds; we should choose these even if no pleasure resulted.”130 We want these things because they are good, and they are good because they are a natural part of humanness. So a human is more human if he sees, remembers, knows, and is virtuous.

We have the feeling of bliss, pleasure, or happiness if we manage to achieve a good goal. It is hard for utility to be a goal in and of itself; the goal is goodness, and utility is its by-product, an externality. That which is good for a man is also the source of pleasure (for example, food); thus is our world built. We do not eat for pleasure only, but we have pleasure eating.

Aristotle would most likely protest against today’s approach, where the maximization of utility is often automatically considered human nature. He considers what can simply be considered moderation to be the greatest virtue: “evil belongs to the class of unlimited”131 and “good to that of the limited … for these reasons also, then, excess and defect are characteristic of vice and the mean of excellence.”132 This is therefore not about the maximization of utility, as the Epicureans argued, but about temperance. The goal is somewhere in between. Let’s use an example: “With regard to giving and taking of money, the mean is liberality, the excess and the defect prodigality and meanness.”133 Or on a more general level: “So too it is, then, in the case of temperance … the man who indulges in every pleasure and abstains from none becomes self-indulgent, while the man who shuns every pleasure, as boors do, becomes in a way insensible; temperance and courage, then, are destroyed by excess and defect, and preserved by the mean.”134 “It is thus, then, that every art does its work well—by looking to the intermediate and judging its work by this standard.”135

So, the key is not maximization at any cost but aiming for the center.

For in everything it is no easy task to find the middle. e.g., To find the middle of a circle is not for every one but for him who knows; so too, any one can get angry—that is easy—or give or spend money; but to do this to the right person, to the right extent, at the right time, with the right aim, and in the right way, that is not for every one, nor is it easy; that is why goodness is both rare and laudable and noble.136

To this it could be added that such a point (the middle) is not easy to recognize. “Hence it is no easy task to be good. For in everything it is not easy task to find the middle”;137 a person must feel about for it. We do not recognize the bliss point easily.138

THE STOICS VERSUS THE HEDONISTS Surprisingly, it is Adam Smith, the founder of economics, who probably has the best description of the moral systems of ancient Greece in his book The Theory of Moral Sentiments. In the final, most interesting part of his monumental work,139 we find an excellent study of the philosophical ideas of the ancient Greeks. Smith divides the moral teachings of the ancients into two different and de facto competing schools—the Stoics and the Hedonists. Their central dispute lies in the answer to the question of whether it pays to do good. Can it be calculated that good deeds bring us some kind of countervalue? That outgoing good correlates with incoming good?

The Stoics

The Stoics did not find any relationship between good and pleasure or utility,140 and for this reason, any calculus was forbidden in advance. Certain good deeds tend to be paid back in pleasure (increased utility), others not at all,

but the doer of the deed should remain perfectly blind to the results or impacts of his actions. The morality of the individual is judged on the basis of observance of the rules, regardless of the outcome of the given act.141

In other words, the morality of individual actions is judged only from the point of view of adherence to the rules, not the results or impacts of a given act. The result should simply be left to Fate.142 If man behaves unethically, “his success can give him but little satisfaction.”143 According to the Stoics, the morality of a given act is not found in the repercussions of the act, whether it increases or decreases utility, but in the correctness of the act itself. For this reason, according to the Stoics, we must not analyze the costs or yields of the act.

Today Adam Smith is considered the founder of classical economics, for which the targeted maximization of utility is a central topic. Yet he considered himself a Stoic. He promotes this ancient philosophical direction144 and admired how they managed to free themselves from thinking about utility.145 (We will return to the paradox of how Smith’s legacy is understood today.)

The Hedonists The Hedonist (Epicurean) school, as represented especially by Epicurus, professed the exact opposite. According to them, neither good nor rules are exogenous, given from above. The goodness of an act lies in its results of the deed itself—in the utility it brings. In addition, its utility is judged from the personal point of view of the actor. The source of Epicurean ethics is egoism, the means to it calculation, prudence. Epicurus does not acknowledge any higher or altruistic principles. Only in case of friendship is he willing to make an exception. Utility thus became the main assumption for a good life and the guiding principle in deciding on every act. While the Stoics were not allowed to calculate the results of their actions (who is capable of overseeing the ends of our acts?), for the Hedonists (Epicureans) it was, on the contrary, the sine qua non of their morals.146 “[B]odily pleasure and pain were the sole ultimate objects of natural desire and aversion.”147 The Epicureans laid down an equals sign between good and utility—the morality of an act lies only and exclusively in how it decreased or increased personal benefit.148

It is important to emphasize that the Epicureans were completely consistent on this point and argued that “[a]ll the pleasures and pains of the mind were, according to Epicurus, ultimately derived from those of the body.”149 On the other hand, physical experiences were defined relatively widely and also included intellectual experiences. A Hedonist was supposed to use his reason to oversee his acts to their end in the long term. He does not accept or excuse short-run pleasures: “It is impossible to live a pleasant life without living wisely and well and justly, and it is impossible to live wisely and well and justly without living pleasantly.”150

Egoism, forethought, calculus, and calculation made up the source of Epicurean ethics. Of course, according to the Hedonists, even these principles (the principles on which modern economics stands) have their exceptions. The principle of egoism, for example, is not valid in the case of friendship, where sympathy plays a role as the primary motive of our acts.

Economics of Good and Evil If we wanted to express the aforementioned in the technical language of economics, then the Stoics demarcated the space for human behavior through certain “moral constraints” (just as today’s economics works with budget constraints). For the Epicureans, of course, moral constraints completely disappear and morality is de facto implicitly incorporated in utility curves. Only external limits (budgets, for example) can limit the increases in utility. On the other hand, however, Hedonist teachings have a major advantage in that they do not have to take any exogenous (externally given) moral system or set of rules, which will always be the weak point of the Stoics or anyone else who is founded on rules or responsibility. The Hedonist principle creates its own rules.

Another difference between the Stoics and the Epicureans is in the relativization of good as such. As a moral quality in the teachings of the Hedonists, good loses its inherent sense and becomes a mere subset of utility. Virtuous acts can sometimes lead to greater utility and must be committed at that time. Good becomes something of a set of rules that can lead to increased utility, which stands completely in conflict with the teachings of the Stoics. While good for the Stoics was the reason for all of their acts, and pleasure stems from adhering to rules (including disregarding their results), the Hedonists completely turned this logic around: Good became the achievement of utility.

As has already been said, this philosophy of utilitarian economic teaching goes mainstream in the hands of J. S. Mill.151 Adam Smith, on the other hand, ends his chapter on the Epicureans with the words: “This system is, no doubt, altogether inconsistent with that which I have been endeavouring to establish.”152 He refuses Hedonism as having too simplistic a view of the world. “By running up all the different virtues, too, to this one species of propriety, Epicurus indulged a propensity, which is natural to all men, but which philosophers in particular are apt to cultivate with a peculiar fondness, as the great means of displaying their ingenuity—the propensity to account for all

appearances from as few principles as possible.”153 One unintended irony is that it was this criticism from Adam Smith that predicted the future development of

economic thought—to this day most economists consider the principle of self-love or egoism to be the only driving force of human behavior. An even greater irony is that Adam Smith is considered the father of this principle. Another methodological irony is that it is economics which tries to “account for all appearances from as few principles as possible.”

The polar tension between the teachings of the Stoics and the Hedonists in the economics of good and evil is highlighted most clearly by Immanuel Kant, when these two schools again were set against each other as two of the fundamental prototypes of the morality of decision-making.154 In his ethics, Kant joins the Stoics, whose teachings he revived and even made stricter. But this direction did not make it into economic thinking.

CONCLUSION Greeks stood at the beginnings of our philosophy, and they significantly contributed to our way of living today. We started with the concept of truth of the poets, then talked about the birth of philosophy and of the numerical mystics. We went into some detail to see how interesting the economic thought of Xenophon is.

Plato was the bearer of the vector of our philosophy. He talked about the world of ideas and warned against the world of shadows, in which we now live. He has no respect for the desires of the body. Here we talked at some length about models and myths and about the idea of progress, about the Golden Age and the debate between a cultured and natural life. Aristotle could be considered the first scientist who, unlike Plato, devoted a lot of energy to this carnal world. We debated his thinking about a happy life and the question of whether it lies in the maximization of utility. We also introduced the key concept of Maximization of Goodness as a meaning and purpose in life.

Finally, we opened the debate between Hedonists and Stoics, something to which Adam Smith devoted a lot of ink. Economics as a science is a clear follower of the Hedonistic approach equating goodness with utility. Only the Hedonist program—maximize your supply of goods until it reaches your demand for goods, has not been fulfilled, although we have tried very hard for many generations, to the present day.

4 Christianity Spirituality in the Material World

It is written, “Man does not live on bread alone.” The Bible, New Testament

Jesus’s “Man does not live on bread alone”1 is certainly true, just as it is true that people cannot live without bread. We were endowed with both body and soul, and we are both spiritual and material beings. In an extreme approach, both of these positions are inhuman; both are lethal in a certain sense. Without the material, we will die; without the spiritual, we stop being people. We must care for both, but at the same time it definitely does not have to be true that one comes at the expense of the other, as is frequently said. On the other hand, it would be a mistake to think that these two areas are independent of one another and do not influence each other. The very fact that we need external, material factors so that we can stay alive through the sweat of our face2 is given as a reason to ease up on this rushing and think about economics.

In this chapter we will take a look at how Christianity searches for harmony between these two poles. How does Christianity view the hurrying we do on Earth? What does it think about consumption, materialphysical requests, and asceticism? I will try to point out the economic ideas in Christianity, predecessors to the concept of the invisible hand of the market, the question of good and evil, and organizing people in society. Here we will also pause to consider how Christianity looks at the question of whether good or evil pays.

As the most widespread religion in Western civilization, Christianity has had a huge influence on the formation of the modern economy. This faith frequently had the decisive word, especially in normative questions (that which should be done). It would be hard to imagine our contemporary Western market democracy without it.

Christianity is built on Judaism,3 takes over numerous elements of Greek thought, and adds its own completely new dimension of salvation. In this form it is a faith that became a completely essential part of the development of Euro-Atlantic civilization in the last two millennia. But this isn’t the single reason why Christianity should be studied. Some economists write4 that economics is closer to Thomas Aquinas than to Isaac Newton precisely because its rhetoric and argumentation5 all too often bring to mind theological disputations rather than the arguments among those who study physics. This is in stark contrast to what economics itself proclaims to be.

ECONOMIC PARABLES The Bible and economics are much more closely tied than one would think. Of Jesus’s thirty parables in the New Testament, nineteen (!) are set in an economic or social context: the parable of the lost coin;6 of talents, where Jesus rebukes a servant who did not “put my money on deposit with the bankers;”7 of the unjust steward;8 of the workers in the vineyard;9 of the two debtors;10 of the rich fool;11 and so forth.12 Some authors have even counted that thousands of verses can be found on economic or social issues, of justice, wealth, or money, and that the second most frequent topics of both the Old and New Testaments are socio-economic (after idolatry13). As regards the New Testament, economic inquiries are discussed on average every sixteenth verse; in the Gospel of Luke, it is as often as every seventh.14

The Sermon on the Mount, Jesus’s longest and probably most important speech, starts with the words: “His disciples came to him, and he began to teach them, saying: ‘Blessed are the poor in spirit, for theirs is the kingdom of heaven.’”15 Poverty, a dominant economic theme, is present (albeit in the context of the poverty of the soul) right at the beginning. Blessed also are those “who hunger and thirst for righteousness, for they will be filled.” Without wanting to go into deeper theological exegesis, it is certain that Jesus is turning the maximization theorem inside out. Shortage and poverty (of both the belly and the soul) are considered a high value. The beginning of Jesus’s model prayer, which has taken on the name of Pater Noster (Our Father), presents the plea “give us today our daily bread”16 just after the desire for the coming of the kingdom of God. Incidentally, a key term of the New Testament, gospel, originally meant a tip, a small payment for the conveyance of good news (such as an unexpected victory). We will soon return to these economic themes when we discuss the topic of gifts.17

And finally one example of how important economic dealings are in the New Testament comes from the last book of the Bible, Revelation. During the end times, during the reign of the Antichrist, the ones not marked with the “mark or the name of the beast” will be punished by not being able to buy and sell.18

CANCEL OUR DEBTS

As we have seen, Christianity builds a large amount of its teaching on economic terminology and uses economic and social context. Probably the most important connections between Christianity and economics can be found in the continuation of Jesus’s prayer:19 “Forgive us our debts, as we also have forgiven our debtors.”20 For in New Testament Greek, debt means sin.21 In this sense, these words—debt, debtor—speak to our time much more audibly than the distant terms sin and those that sin against us.

Jesus was speaking of something even deeper here. In those days, people whose debt increased so unbearably that they were not able to repay became “debt slaves.”22 There is very rich literature in the Old Testament about the whole concept of the release of debt slaves.23 The New Testament takes this social institution to a higher and more fundamental level. Someone had to pay a ransom for people who fell into slavery. These people had to be bought out, ransomed, or, to use a more modern term, bailed out. Forgiveness (of debts, sins) is the key feature of Christianity, which makes it unique among the major religions. Jesus’s role was to redeem men, purchase us at a price24 buy us out of debt from the arms of sin, debt. “To give His life as a ransom for many.”25 “In him we have redemption through his blood, the forgiveness of sins, in accordance with the riches of God’s grace,”26 and further, “in whom we have redemption, the forgiveness of sins.”27 For the Jewish community of the time, which was used to the concept of the representational sacrifice of animals (such as the lamb at Passover), he provided a new covenant: “He did not enter by means of the blood of goats and calves; but he entered the Most Holy Place once for all by his own blood, having obtained eternal redemption …., For this reason Christ is the mediator of a new covenant, that those who are called may receive the promised eternal inheritance—now that he has died as a ransom to set them free from the sins committed under the first covenant.”28 In other words, he came to “proclaim the year of the Jubilee” the year of forgiveness of debts, sins.

REDEMPTION OF DEBTS TODAY If this concept seems distant or irrelevant today, let’s just remember the recent redemption of banks and large companies in the crisis years of 2008 and 2009.

Our modern society, paradoxically, cannot function without the institute of this unfair forgiveness of debt. Every here and now, we ourselves practice an unfair forgiveness of debt and unfair treatment. It would be hard to imagine the financial Armageddon that would follow if the government actually did not pay the ransom and redeem banks and some large companies. This, of course, goes against all principles of sound reason and of basic fairness. We also breached many rules of competition on which our capitalism is built. Why did the most indebted banks and companies, which did not compete very well, receive the largest forgiveness? So we see that the principle that Jesus uses is one which is (at least in times of crisis) quite common till this very day. It was not fair, to be sure, but it had to be done in order to redeem not only these particular troubled and highly indebted companies but also others who would fail if these few were not saved.

GIFT-GIVING AND TRANS-ACTION In economic theory, the gift is among the anomalies that are hard to explain with existing models. At the same time, the concept of the gift (which we cannot repay) is the basic principle of the Christian salvation. “For it is by grace you have been saved, through faith—and this not from yourselves, it is the gift of God—not by works, so that no one can boast.”29 God’s redemption is free; it cannot be paid for, not by deeds, merit or “good behavior.” There simply is no exchange; it is a gift.

This righteousness from God comes through faith in Jesus Christ to all who believe. There is no difference, for all have sinned and fall short of the glory of God, and are justified freely by his grace through the redemption that came by Christ Jesus.30

And further, “I am the Alpha and the Omega, the Beginning and the End. To him who is thirsty I will give to drink without cost from the spring of the water of life.”31 Although it is paradoxical, in transcendental issues (trans- scandere, exceeding, rising, permeation through) the monetary trans-action (or above- or intra-action) is not possible.32 Transcendance cannot be bought; it must be given.

Not long after the establishment of the first church, a magician appeared who wanted to buy and pay for these gifts with money. The apostles’ reaction could probably be expected. “Peter answered: May your money perish with you, because you thought you could buy the gift of God with money!”33 Let’s pause for a moment for an economic

view on the gift and on things or areas that are price-less (in both meanings of the word). A mutual or reciprocal gift is a much deeper and older method of transaction than purchase and sale with an

explicit price. For many generations of human history, things simply did not have a price; people got by without pricing. People long ago gave things reciprocally or lived in communities where things were exchanged—even if the first example was more common. The first nonmonetary social systems were gift economies. When barter did occur, it was usually between either complete strangers or potential enemies.34 We should realize that even today money is intended for contact in large societies, while older or smaller societies did not and do not use money as much (such as family).35

The phenomenon of the gift is a greatly discussed and controversial topic among economists to this day. Why do people give gifts? Tips in restaurants or other occasions (such as taxis) could be considered a form of voluntary giving.36 Why is a voluntary tip given in motels in foreign countries where we will never return?37

The main characteristic of a gift is that it has no price. It certainly has value, but never a price. A gift can be reciprocal and mutual (and frequently tends to be), but their exchange value will always be imprecise, unclear, fuzzy (we are not exchanging same for same). In Christianity, we give trust and faith (many consider that to be “God’s gift,” too), and God gives salvation to those who accept the gift. The gift is not negotiated; there is no possibility of a discount. As opposed to this, trade has a precise-to-the-cent price that both parties agree to. We must be aware that without the existence of a large and functioning market, setting a precise price must have been rather complicated and ultimately a sensitive matter as well. Even Thomas Aquinas battled with this problem (as do present-day antimonopoly offices, which frequently keep watch or set prices in situations where a market does not function well). Contemporary “speculative bubbles” are also an important imaginary “departure” of prices from their values (and after a certain time they burst, which means that prices “return” to their notional idea of value). To this day, gifts are given in all kinds of marketing promotions—“free items”—whether they are teddy bears at gas stations, 10 percent more ketchup, or “buy one, get one free.” This too can be considered a modern effort to sweep away an exact price of goods in the framework of competition.

Another interesting thing is that we frequently hide prices or keep them secret. We carefully remove prices from gifts, only the payer may look at the bill in a restaurant, and in better restaurants the bill is even elegantly hidden in various folders. In the best restaurants, the person being invited apparently gets a menu where prices cannot be seen at all.38 We evidently have the feeling that the most valuable things should be given for free, that they should not be available for purchase.39 It is precisely the most valuable things in life that must not be sold or monetized. The notion comes from somewhere within us that precise reciprocity is undesirable for important things or for people close to us. You may have noticed that nothing is bought or sold in the entire Lord of the Rings trilogy. The Fellowship gets everything it needs on its journey through gifts.40 The extremely careful J. R. R. Tolkien (who loved to immerse himself in details) never mentions currency anywhere in the Lord of the Rings. In this it is similar to most older tales, fairy tales, myths, and stories. Not even in the Epic of Gilgamesh do we find out anything about money, and not once does anyone sell anything. Important things are simply given, found, or stolen (the Ring of Power, for example, uses all these methods of changing owners—but it is never sold).41

While money is necessary for the functioning of today’s society, among those close to us we frequently create situations where it is as if money were not there, or at least that it is not important (which is why we “buy rounds,” or take turns paying at a restaurant). I once heard that friends are people who are so mutually indebted to each other that they forget how much they owe. On the other hand, if a friend wanted to pay for your help, it would probably offend you. “Paying back” by invitation for a dinner or drinks or doing a deed in return, on the other hand, is acceptable. But never payment that has a precise price and is exact. Marcel Mauss argues that this reciprocal gift- giving is “like a resurrection of a dominant motif long forgotten” and a “return to the old and elemental.”42 Some anthropologists tend to argue that gift economies are essential or elementary structures, and money or quid pro quo exchange, are only secondary issues.43

And really, for untradable things that cannot be exchanged (such as friendship), there is no way to trade them or swap them (you cannot buy a true friend or inner peace). But you can buy things that seem to be around it: proxies. You can buy a dinner in a restaurant for your friends, but there is no way you can buy true friends by doing so; or you can buy a cabin in the mountains and try to find peace there, but you cannot buy peace itself. Ultimately, advertising functions on this principle: They show you something that cannot be traded (a good night’s sleep, a happy family at breakfast, or beauty) and offer you a tradeable proxy (an expensive bed, some kind of breakfast cereal, a mountain cabin, or shampoo). And even though we know this is an illusion and that actors and extras play in ads, we still start to desire a better pillow (mine is responsible for my troubled sleep), new yogurts and cereals (the happy family at breakfast), and shampoo (even if the model in the ad has probably never used the particular brand).

But back to prices. Is the Czech philosopher Zdeněk Neubauer right when he argues that “price is unholy”?44 The prominent German sociologist Georg Simmel seems to hint that too when he calls money common (meaning vulgar): “Objects themselves are devalued of their higher significance … Money is ‘common’ because it is the equivalent for anything and everything. Only that which is unique is distinguished; whatever is equal for many is the same even for the lowest among them, and for that reason it pulls even the highest down to the level of the lowest. That is the tragedy of every levelling process: it leads directly to the position of the lowest element.”45 It even insults us when, for the most important things, someone accuses us of profit-seeking, or that we’re “just in it for the money.”

THE ECONOMICS OF THE KINGDOM Aside from the paradox of the gift that you can never work off, Jesus’s teachings are often based on paradoxes, just like many of his parables.46 Jesus considers more valuable two mites that a poor widow drops into the collection than the golden gifts of the rich.47 Aside from the fact that here he expresses sensitivity to marginal disutility, at the same time he grants the legitimate role of money. Christianity respects the material side of life, does not condemn it, and when Jesus is asked whether secular taxes should be paid at all, he looks at the likeness stamped on the coin and answers: “Give to Caesar what is Caesar’s.”48 It is true that Jesus once chased out the “men selling cattle, sheep and doves, and others sitting at tables exchanging money”49 from the temple … but he didn’t chase them farther than that! His argument was not against their employment (it wouldn’t have been enough to drive them out of the temple) but that they mixed the sacred with the profane.50

Jesus, of course, frequently warned against a two-way relationship to property—it isn’t one-way ownership, but a reciprocal ownership seems to exist, too. The biblical warning sounds appropriate: Earthly things (things of bread) are all right, but we should not care too much for them, should not cling too much to them, because they contain a trap:

Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.51

We should present the following passage similarly:

Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Who of you by worrying can add a single hour to his life? … But seek first his kingdom and his righteousness, and all these things will be given to you as well. Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.52

What is interesting is that these words speak to rich and poor times with the same force. Even if (or precisely because) we have too much to wear (and the problem is to choose, buy, or order them), these words make sense to us, just as they make sense (or made sense) to the society of the poor, or the society that truly had nothing to wear. The passage is interesting to read again with this viewpoint: It is also aimed at over-rich society, which does not suffer from shortage but from surplus. And out of this surplus we worry what to eat or drink (isn’t it too greasy, too sweet?) and what to wear (what shall I wear?).

It is also certainly appropriate to add the following citation: “For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.”53 The expression is commonly misquoted as simply “money is the root of all evil,” which is not what the text says. It is love of money that makes prudence a vice. Perhaps the next quote (also by Paul but in a different letter, where he also uses the term love of money) puts it better in perspective: “Keep your lives free from the love of money and be content with what you have.”54 In the parable of the sower, “worries and riches and pleasures” seem to be one of the key obstacles that do not allow the seed (of faith) to bring “fruit to maturity.”55

GAME THEORY: LOVE THY ENEMY VERSUS AN EYE FOR AN EYE

We can look at certain results in the way offered by the modern approach of game theory. In the well-known Prisoner’s Dilemma, two prisoners choose their dominant strategy, which maximizes their expected individual utility, but not the total utility. Both rationally choose the noncooperative option and thus ensure the worse result (non-pareto optimal). The system itself (the character of the game) “forces” us toward collectively unwanted results. Barry Nalebuff, one of the leading figures of contemporary game theory, notes that negotiations on the basis of the Christian maxim “do unto others as you would have them do unto you” knows how to overcome this conflict: “If people were to follow the golden rule, there would be no prisoner’s dilemma.”56

An anthropological approach indicates interesting historical development related to both game theory and to the history of morals. For a long time it was argued in game theory that in strategies of repeated simultaneous games, it pays to use a tit-for-tat strategy, or the equivalent measure in response during every following step. If two players play a game of fraudcooperation, a highly effective strategy is to retaliate fraudulent moves with similarly fraudulent moves, and vice versa. In other words, to repay a slap with a slap, a smile with a smile, and a caress with a caress. This strategy was considered the best since the era of Axelrod’s experiments in 1980, when leading game theory experts played against each other; Anatom Rapoport used the tit-for-tat method and won repeatedly. It is a simple, strict strategy that forces adherence to the rules, urges cooperative solutions, and knows how to forgive (proportionally and quickly, which ensures that the game is not finished after the first cheating of any kind). It is actually the Old Testament’s eye for an eye and tooth for a tooth.

Only recently a strategy was found that works even more effectively. In a world of imperfect information and noise, it simply arrives at a disinterpretation of signals and a (frequently unnecessary) beginning of a retaliatory strategy.57 In addition, this strategy has a recursive tendency and tends to be connected with a spiraling effect of descending to the bottom. Nalebuff argues that the kinder is more effective in the end.

As in the history of Eastern civilization, the rule of eye for an eye, tooth for a tooth was first considered to be the most effective strategy.58 For the first time, Jesus arrives at a more cooperative long-term strategy:

You have heard that it was said, “Eye for eye, and tooth for tooth.” But I tell you, Do not resist an evil person. If someone strikes you on the right cheek, turn to him the other also. And if someone wants to sue you and take your tunic, let him have your cloak as well. If someone forces you to go one mile, go with him two miles. Give to the one who asks you, and do not turn away from the one who wants to borrow from you.59

In a situation of repeated games, if both sides take a strategy of an eye for an eye, or repaying good with good and evil with evil, evil gains a much greater space. One single act of evil (perhaps even a random one) takes on recursive echoes over time. It isn’t certain whether a small wave of evil will gradually fade away or whether it will grow into a devastating storm.60 Our paying off of evil does not decrease it but multiplies it. Compared to Nalebuff’s game, the merciful come to a much greater minimalization of evil than the tit-for-tat, eye-for-an-eye strategy—in a similar way to what Jesus spoke of:

You have heard that it was said, “Love your neighbor and hate your enemy.” But I tell you: Love your enemies and pray for those who persecute you, that you may be sons of your Father in heaven. He causes his sun to rise on the evil and the good, and sends rain on the righteous and the unrighteous. If you love those who love you, what reward will you get? Are not even the tax collectors doing that? And if you greet only your brothers, what are you doing more than others? Do not even pagans do that?61

At the same time, Christianity carried out a major revolution on this ethical question. As we have shown in previous chapters, evil may but does not have to take on a moral form; certain evils (a tree falling on a person) are bad, but it is not a moral evil for which someone should be found guilty. In this epistle, all evil, including residual evil, simply occurs—whether consciously or inadvertently, moral or outside morals—and all this evil is placed on the shoulders of the Messiah, who is sacrificed for all the evil in the world. In these complicated systems, guilt is found only with difficulty, and precisely for this reason God is in this sense unfair, because He forgives. He is, so to say, “positively unfair,” just as is the landholder who pays unfairly high wages to his laborers even though he does not have to.62 Moral systems seeking guilt will get drowned in one go by grace in the New Testament.

THE ECONOMICS OF GOOD AND EVIL IN THE NEW TESTAMENT

Stop helping God across the road like some little old lady. U2, “Stand Up Comedy”

Does good pay (economically)? The question of why to do good presented a problem for Jewish thought (as we have shown), and the New Testament resolves it to a great extent. And in a dual manner.

By introducing the new concept of the “Kingdom of God,” which was quite foreign to Judaism, Christianity literally opened a “new space” where moral acts receive their payment. The earthly world does not have to be just (the just can suffer here, while the unjust live in surplus and abundance), but justice awaits every person in the coming kingdom. While Judaism must simply deal with the problem of just rewards in this world, Christianity shifts justice to another world, to the world beyond. Good and evil (outgoing) therefore have an economic logic in that the reward (incoming) occurs, but in heaven. So it pays to do good and to suffer evil, because the just will receive their reward in heaven.

This is an elegant solution, but even this solution has its price—and the price was this world. The world, which in the Old Testament was a world of good and the scene of history, has been shifted to the second track. Christianity has provided a satisfactory solution to the ancient economicmoral paradox of the just reward, but not for free—the solution to this paradox comes at the cost of sacrificing the world. To many Christians, the world seemed unjust and to a large extent evil. This is where some of the New Testament’s distance, sometimes as far as resistance, to this world stems from: “Don’t you know that friendship with the world is hatred toward God? Anyone who chooses to be a friend of the world becomes an enemy of God.”63 Because only in a thoroughly bad world can the just suffer and the unjust enjoy themselves. It would appear wisest to run away from such a world. Apostle Paul writes, “to die is gain … I desire to depart and be with Christ, which is better by far.”64 In the end, the personification of evil gains a more specific and more horrifying form than in the Old Testament.65 In the Old Testament, Satan is explicitly named in four occasions66 (if we count the snake in Genesis as his representation). On the other hand, he is mentioned nearly fifty times in the New Testament. What’s more, he is said to be the “ruler of this world.”67 In this sense, the economics of good and evil does not work in this world. The reward for the just is not here (see the story of Lazarus) but in heaven.

The Christian detachment from the world originates from this point especially. From this standpoint, the world appears evil, unfair, transitory, unimportant. Let us not deal with the so-called world of Platonic shadows, let’s not be tied up or tied down by them; the best is to ignore them as much as possible (Augustine also thinks similarly, but this trend is overturned by Aquinas in later phases of Christianity).

The second, much deeper way in which the New Testament solved the problem of economics of good and evil was by dismantling the accounting of good and evil altogether. Salvation is an undeserved gift (as we have seen above) that you cannot earn. In this sense, the economics of good and evil ceased to exist. We shall come to this later, but first let’s pause at the biggest commandment—the commandment of love.

YOU MUST LOVE Here it would also be good to recall what the Old and New Testaments want primarily: to “love your neighbor as yourself.” According to Jesus, this law immediately follows the commandment to love God and is the largest commandment of all:68 “The entire law is summed up in a single command: ‘Love your neighbor as yourself.’”69

This commandment is important for economists as well because it has to do with the regulation of egoism or self- love. One should not have unlimited self-love or zero self-love, but his or her interest in him- or herself should be as great as he or she feels toward those close to him or her. The one who loves greatly can greatly love him- or herself as well. Incidentally, we note that both count as love. Our self-love should be the same as love toward those close to us. No more, no less.

In addition, our outgoing love should be independent from the behavior of the other party, or the behavior toward us (incoming good). In other words, Jesus wants us to love each other at all costs. Let the other party love or hate us, but we should love those close to us the same as ourselves.

There is nothing bad about caring for oneself (prudence), but it must not become an obsessive love. Prudence is even one of the seven virtues, as McCloskey notices: “Thomas Aquinas in the middle of the thirteenth century, assigned a place of honor among the seven virtues to Prudence—that is, to know-how, competence, a thrifty self- interest, ‘rationality’ on a broad definition.”70 We should note here that the virtue of prudence is only one of seven, not the only one, and we should always keep that in perspective.

THE INDESTRUCTIBILITY OF EVIL: THE PARABLE OF THE WEEDS Evil is difficult, if not impossible, to get rid off. Even in the perfect state of the garden of Eden, the (latent)

possibility of evil—the Tree of the Knowledge of Good and Evil—had to exist.71 Evil had to be possible. This is something Christianity is completely aware of; we cannot be rid of evil through human effort. Once it exists, it grows through good like an omnipresent weed. This is why the world needs Christ’s representative sacrifice; if we were able to achieve pure good through our own effort, this sacrifice would be unnecessary. In this context, the parable of the weeds in the Gospel of Matthew is interesting:

Jesus told them another parable: “The kingdom of heaven is like a man who sowed good seed in his field.” But while everyone was sleeping, his enemy came and sowed weeds among the wheat, and went away. When the wheat sprouted and formed heads, then the weeds also appeared. The owner’s servants came to him and said, “Sir, didn’t you sow good seed in your field? Where then did the weeds come from?” “An enemy did this,” he replied. “The servants asked him, “Do you want us to go and pull them up?” “No,” he answered, “because while you are pulling the weeds, you may root up the wheat with them. Let both grow together until the harvest. At that time I will tell the harvesters: First collect the weeds and tie them in bundles to be burned; then gather the wheat and bring it into my barn.”72

We cannot get rid of evil absolutely; evil has a role to play. If we were to set about uprooting all evil, we would destroy a lot of good wheat. In the words of Thomas Aquinas, “for if all evil were prevented, much good would be absent from the universe.”73 Augustine seemed to be of similar opinion: “For He [God] judged it better to bring good out of evil, than not to permit any evil to exist”; and elsewhere he writes, “For if it were not a good that evil should exist, its existence would not be permitted by the omnipotent God.”74

The parasitic weed (evil) should be pulled only in the context of the field; weeds are not pulled outside the field (for example, in a meadow or on a hillside).

The parable of the weeds has another dimension: We would certainly not be able to distinguish what is “good seed” and what is weed—until it grows.75 Our abstract-moral systems are also imperfect, not to mention their transfer into practice. There is no moral school that has proven to be completely consistent and without contradictions. Is it within man’s power at all to distinguish between good and evil (“Do not judge, or you too will be judged.”76)? Incidentally, this parable is being fulfilled to this day, when mankind is not able to set up a satisfactory moral system, even though the greatest and most creative minds have attempted to do exactly that.

It is as if beams were stuck in our eyes through which we see the moral world distortedly—we do not perceive our own errors, and at the same time we are capable of pulling out “the speck of sawdust in your brother’s eye.”77 We are trying to create sophisticated moral systems (one, for example, is the system of the Pharisees) with which we filter out the mosquitoes but swallow the camels.78 Jesus defied such artificial moral systems in his time, and even mocked them.79 Jesus left behind that no system of rules could be judged from the outside, only commandments to love. Jesus takes the position that all good or evil comes from within man, be it from his will or his heart.80 But how should we judge those whose hearts we cannot see into? Paul adds another non rule to this: “The goal of this command is love, which comes from a pure heart and a good conscience and a sincere faith.”81 And even more plainly: “To the pure, all things are pure, but to those who are corrupted and do not believe, nothing is pure. In fact, both their minds and consciences are corrupted.”82 And finally, a crowning non rule: “Everything is permissible for me—but not everything is beneficial. Everything is permissible for me—but I will not be mastered by anything.”83

But let’s go back to the Garden of Eden, where, according to the Bible, the ability to know, to distinguish between good and evil, was born. From this standpoint, there remains an eternal paradox whereby all moral schools try to outdo each other on which of them can better distinguish the difference between good and evil (to know what is good and what is evil).84 At the same time, according to Genesis, the fall of man from the Garden of Eden was precisely due to the desire to taste the fruits of the Tree of the Knowledge of Good and Evil. The desire to know, to distinguish between good and evil, therefore became the cause of the failure—and moral schools try (yet again) to excel in exactly that! Jesus’s words shift morals from the area of acts to the area of thoughts and imaginings, desires. To commit a sin, it isn’t necessary to kill; it’s “enough” to hate.85 The difference between hatred and murder is often one of nerve and opportunity, sometimes even mere logistics. Other sins were similarly shifted from external (carried out) to internal (desire for evil, intention), as can be seen in the Sermon on the Mount. A message of the Christian gospel is that when it comes to salvation, good and evil no longer count. As the apostle Paul writes, “Blessed is the man whose sin the Lord will never count against him.”86 For those who have been forgiven, their evil will now not be counted. This was a very radical (both practically and philosophically) way out of the labyrinth of rules of human morality. Christ atones for our guilt and its repayment, and by doing so he transforms morality and cancels the concepts of good and evil that existed up to that point. Christ cancels the economy of good and evil. The relationship to God is not similar to double-entry accounting, but to love and joy. Instead of this, he offers an

unearned, unfair (positively unfair) grace, one that is unfair to our benefit.87

LABOR AS A BLESSING, LABOR AS A CURSE We have seen how the concept of labor developed with the Hebrews and the Greeks. Man was placed in the Garden of Eden “to work it and take care of it.”88 Eden was not a place of idleness; even in a state of perfection and bliss, man worked.89 Labor belongs to man as a means for fuller expression, self-realization, and ultimately as a permanent source of introspection—a recognition of one’s own possibilities and limits, often even a partial role in this world. Man therefore does not work out of necessity but out of his nature.90 Unpleasant work (in the sweat of your face) occurred only after the Fall.

We read similar stories in Greek legends. Labor long ago was pleasant, but because Pandora, the first woman created (and who was created as a punishment), opened her box, and aside from every possible evil, that which came out of the box was also the unpleasantness of labor—burdensome labor that mankind had not known previously.91 It is as if labor itself was not cursed (it existed long ago in a blessed form), but suffering was added to its character: “Cursed is the ground because of you; through painful toil you will eat of it all the days of your life.”92 It is as if it said: “That which was created to give you pleasure and give meaning to your existence will now be frequently disagreeable and will fight with you.”

This conception boldly complements the classical economic view of labor, which implicitly assumes a negative utility from labor from the first hour worked. Today we consider work to be a disutility and consumption utility (men work just so they can consume). However, we overlook the deeper, ontological sense of labor, or the fact that labor is unique for man and that people see a deep sense in their work and see it as a partial (yet important!) goal of their lives.

But back to the New Testament. Labor should provide man with pleasure and fulfillment. The Bible does not call for a life without manual labor, as opposed to certain Greek ideals. Labor is even a responsibility for man: “If a man will not work, he shall not eat.”93 The notion that a spiritual person should be clear of all drudgery and earthly hurrying is shaded by the simple reality that Jesus Christ came to Jerusalem as a trained carpenter. All his disciples worked, mostly as fishermen (manual), but also as tax collectors (nonmanual). None of them made their livings as philosophizing intellectuals, people who would spend all their time meditating. Even the Apostle Paul, who composed an astounding part of the New Testament and spread the gospel all the way to Rome, did not specialize in spiritual things, and worked any time he could—he built tents so as not to be a bother to others.94

Where is the balance between the physically active and contemplative life? Neither the New nor Old Testament sees any either-or between the two areas. On the contrary, those who want to live piously should work honestly and make the money for their livelihood, the Apostle Paul writes to the church in Thessalonia, where a growing number of people started to refuse manual labor under the guise of various spiritual reasons.

In the name of the Lord Jesus Christ, we command you, brothers, to keep away from every brother who is idle and does not live according to the teaching you received from us. For you yourselves know how you ought to follow our example. We were not idle when we were with you, nor did we eat anyone’s food without paying for it. On the contrary, we worked night and day, laboring and toiling so that we would not be a burden to any of you. We did this, not because we do not have the right to such help, but in order to make ourselves a model for you to follow. For even when we were with you, we gave you this rule: “If a man will not work, he shall not eat.” We hear that some among you are idle. They are not busy; they are busy-bodies. Such people we command and urge in the Lord Jesus Christ to settle down and earn the bread they eat. And as for you, brothers, never tire of doing what is right. If anyone does not obey our instruction in this letter, take special note of him. Do not associate with him, in order that he may feel ashamed.95

Elsewhere, the Apostle Paul again emphasizes that not even he lived from the charity of his neighbors, even though he fully concentrated on his spiritual mission to spread the gospels to the pagans:

I have not coveted anyone’s silver or gold or clothing. You yourselves know that these hands of mine have supplied my own needs and the needs of my companions. In everything I did, I showed you that by this kind of hard work we must help the weak, remembering the words the Lord Jesus himself said: “It is more blessed to give than to receive.”96

PRIVATE OWNERSHIP: WHO OWNS THE LAND? Connected with labor is the earning that stems from it, own ownership. Now, is private ownership always valid? In a certain extreme sense, in times of existential need, Christianity doubts the absolute right to private property. Despite this, Thomas Aquinas argues that private ownership has a beneficial influence on social calm, proper order, and positive motivational impulses. Aquinas makes one important exception related to the right of private ownership: “In cases of need all things are common property …. So that there would seem to be no sin in taking another’s property, for need has made it common.”97 This is based on the idea that by nature all earthly assets fall under common ownership. His idea has gained popularity not only from the time of the scholastics, but also in the era of classical economics. John Locke, one of the fathers of the Euro-Atlantic economic tradition, put forth a similar notion. He argues using both reason and faith: “Whether we consider natural reason, which tells us that men, being once born, have a right to their preservation, and consequently to meat and drink and such other things as Nature affords for their subsistence, or ‘revelation,’ which gives us an account of those grants God made of the world to Adam, and to Noah and his sons, it is very clear that God, as King David says (Psalm 115:16), ‘has given the earth to the children of men,’ given it to mankind in common.”98 The classical economist John Stuart Mill considers this in a similar context: “No man made the land. It is the original inheritance of the whole species.”99

Human law must never infringe on the eternal laws of God.100 Not even private property laws can be placed above man as a member of human society. In other words, the institution of private property falls at the moment human life is at stake.

While Thomas Aquinas does not see anything bad about wealth as such (on the contrary, as we will still show, he greatly doubts traditional tendencies toward asceticism), he cannot imagine it in conditions of extreme shortages for one’s neighbors (his view of society as a society of neighbors more or less predetermines this view). On the other hand, he is aware that there are many destitute and that it is impossible to satiate all of them. “Nevertheless, if the need be so manifest and urgent, that it is evident that the present need must be remedied by whatever means be at hand …, then it is lawful for a man to succor his own need by means of another’s property, by taking it either openly or secretly: nor is this properly speaking theft or robbery.”101 This is because “this necessity diminishes or entirely removes sin.”102 The idea is also repeated in the First Treatise on Civil Governments by John Locke, a well-known defender of (almost absolute) property rights.103

The rich should be prepared to share with others in times of need.104 Aquinas gives the example of the Old Testament instruction that it is not considered a crime for someone to feed themselves from the fruits of a vineyard that does not belong to them. The hungry may eat until full in others’ vineyards, provided they do not take any grapes with them. Thomas Aquinas argues that this is not against the law of society’s welfare (i.e., private ownership), because the law should be set up in such a way as to “teach people to be used to being prepared to give to others from their property.”105

The law on gleaning is taken in a similar spirit as well. The rich had the responsibility not to send out a second round of harvesters to collect the first group’s leftovers.106 Everything that was left in the field belonged to the poor, widows, and orphans.107 Anyone who has read the Old Testament must have noted how frequently the text lays out special orders to protect the socially weakest people.

SMALL LOVE: COMMUNITARIANISM, CHARITY, AND SOLIDARITY From an economic viewpoint we cannot go without mentioning the reality that the first church lived in communes of sorts, which functioned on the basis of joint ownership, in the expectation that the end of days would be coming soon:

All the believers were together and had everything in common. Selling their possessions and goods, they gave to anyone as he had need … All the believers were one in heart and mind. No one claimed that any of his possessions was his own, but they shared everything they had. There were no needy persons among them. For from time to time those who owned lands or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone as he had need.108

A similar means of ownership would later shift to monasteries and occasionally to Christian cities as well, such as the Czech city of Tábor during the Hussite Wars in the fifteenth century. How the notions of a voluntary and deeply religious communitarianism became atheistic communism is a question unto itself. Regardless, communists owe Christianity for this notion. Nevertheless, as is seen from history, the Marxist communist vision was not capable of

offering a functional alternative to capitalism. We know similar reports of communitarianism from the numerous references to the “House of Prisca and

Aquila.”109 The first generation of Christians wanted to create an “alternative society that separated itself from the dominant imperial society as much as possible.”110 These local assemblies111 celebrated the Lord’s Supper112 and gathered money for the poor.113

In Latin, charitas means love. In the New Testament, several words for love are used instead of the one used today: The Greek agapé (divine love) was different from erós (sexual love, flames, attraction), stergein (family love), and filia (friendly love).114 Charitas was a kind of social love, compassion. It could almost be said that “small love” is a kind of gravitational force which, while weak (and almost imperceptible in comparison with other forces), is similar to charity in that it is a weak love, difficult to detect in comparison with other loves (which are intense and concentrated on one or a couple of people). But just as with short but strong (nuclear) forces and distant and weak (gravitational) forces, charitas holds together large units, in our case society—in a similar way to how gravity keeps together objects at large distances but is not as “strong” as nuclear or electric forces.

The oldest charitative or solidarity customs or rules have been known since the Old Testament.115 The New Testament further expands on this: “Surplus goods that one did not need were to be given as alms rather than to be stored up like a treasure.”116 And in some cases the New Testament goes even further: “Sell your possessions and give to the poor,” says Jesus to his disciples when he calls to them to “seek his kingdom, and all these things will be given to you as well.”117

Nevertheless, redistribution should be carried out from goodwill and voluntarily. The Apostle Paul writes: “Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”118 The Apostle Paul describes equality in redistribution in the following citation about believers inside the church mutually helping each other out:

Now finish the work, so that your eager willingness to do it may be matched by your completion of it, according to your means. For if the willingness is there, the gift is acceptable according to what one has, not according to what he does not have. Our desire is not that others might be relieved while you are hard pressed, but that there might be equality. At the present time your plenty will supply what they need, so that in turn their plenty will supply what you need. Then there will be equality, as it is written: “He who gathered much did not have too much, and he who gathered little did not have too little.”119

Now about the collection for God’s people: Do what I told the Galatian churches to do. On the first day of every week, each one of you should set aside a sum of money in keeping with his income, saving it up, so that when I come no collections will have to be made. Then, when I arrive, I will give letters of introduction to the men you approve and send them with your gift to Jerusalem.120

The social safety net inside the church was supposed to function like that. But it was not about applying it to the entire society, where Paul had no guarantees that the money collected would be fairly handled. The money was only sent to places where there was an urgent need.

Now let’s briefly look at the economic ethos developing in the dominantly Christian Europe later on.

LATER DEVELOPMENT: AUGUSTINE’S ASCETICISM AND AQUINAS’S GROUNDEDNESS Augustine and Thomas Aquinas were among the key personalities who shaped Christian Europe and influenced its development. We can read about the tension between accepting the world and its marginalization in many parts of the New Testament, although Jesus’s teachings do not stand as a priori negative against the world. One of the key messages of Jesus’s gospel was made up of the news repeated many times that “the Kingdom of God is at hand.”121 In a certain sense it is already present in this material world, as if it were constantly arriving, breaking like waves on this world.122

Augustine ties, to a large degree, into Platonism,123 and in the existing world he instead sees only a hallucination, a shadowplay which only tells of the truly existing world—for him, the visible does not represent reality (which in many ways is similar to the occasional extremes of a rational notion of the world, where abstractions are placed above the concrete). This is not directly about the dualism of body and spirit, but despite this Augustine understood

the body as the “weight of the soul.”124 This notion itself meant that economics did not assign a great deal of importance to it. From an economic standpoint, it will be interesting for us to follow a later great personality, Thomas Aquinas, who reversed attention from the Augustine inwardness toward examining the external world.

Aristotle’s writings, which reversed attention rather toward the external world, were discovered in Europe only in the time of Aquinas. At the end of the high Middle Ages, Aristotle was seen as a threat to Augustinian-oriented Christianity. Thomas Aquinas did not disdain an Aristotelian interpretation of earthly topics, but instead he endeavored them, so that slowly it would come to pass that “the world receives loving attention.”125 Just as Augustine connected the ideas of Platonism to Christianity, Thomas Aquinas did the same with the ideas of Aristotle (he refers to Aristotle almost constantly in his writings—what’s more, he refers to him as a Philosopher—with a capital P).126 One of Thomas Aquinas’s main contributions was that he served as an alternative to Augustinian neo- Platonism, which dominantly supported the teaching of the Western church for a thousand years.127 By “christening” Aristotle, Aquinas created a system that viewed the created world through markedly friendlier eyes. One of the charges of the time against Thomas Aquinas (and Albert) that very well describes this was: “They claim divine wisdom, although worldliness is far more native to their minds.”128

AQUINAS’S CELEBRATION OF REALITY Neoplatonic thought favors the notion of an ascension toward God’s unchanging existence through a gradational hierarchy, ranked more or less according to ties to matter. But Thomas Aquinas considers it differently: “Everything, whether alive or not, whether material or spiritual, whether perfected or wretched, and in fact whether good or evil —everything that has existence, confronts us with the very basic existence of God. This world is not only good—it is in a very precise sense holy.”129 Aquinas teaches us to behave with respect toward all creation, to take a positive position on everything that exists. In the words of Thomas Aquinas, “each thing is good because it possesses actual being … being itself must be called a good.”130 “God is in all things.”131 From an ontological standpoint, Thomas Aquinas understood the material world to be absolutely real. This world was not just a hallucination, a shadow, a trap, a test bed for evil, an imperfect forerunner to the real world—as could be found in the extreme Platonists and some notions of Augustine. For Aquinas, it made perfect sense to resolve the problems of this world.132

Thomas Aquinas went even further than Aristotle in his positive position toward matter. Aristotle argued that the world was formed by God from preexisting matter, which did not represent a subject of God’s creation, but the material from which God only formed individual entities. Aquinas, entirely in keeping with the teachings of Judaism, remains convinced that even this primordial matter was created by God and that even that is the work of a good God’s creation,133 “for everything God created is good.”134 Aquinas counters Augustine’s argument that “for the soul to be happy, it must be severed from everything corporeal,”135 with the notion that the soul sequestered from the body is no more similar to God than the soul in the body. Corporeality therefore does not have to be negative; on the contrary, Aquinas defends it.

This question, which at first appears unspectacular, has immense consequences, especially for economics. If God created out of nothing, ex nihilo, then matter too must be the creation of a good God. From this viewpoint, matter, reality, and this world represent good—it is therefore worth dealing with, worth improving, and worth addressing. Today, it seems, we are at a somewhat different extreme, that of too much care of the material, exterior world and neglecting our interior, spiritual world, or neglecting the care for the soul (as one of the most influential Czech philosophers of the twentieth century, Jan Patočka, writes). Now, the era before Aquinas was biased in exactly the opposite direction. This swing of the pendulum is interesting, as both extremes are to be avoided. As Aquinas’s biographer, G. K. Chesterton, wrote, “God made Man so that he was capable of coming in contact with reality; and those whom God hath joined, let no man put apart.”136 As presented by Thomas Aquinas, we look on something that could be called a blessing and emancipation of what today is a common perception of economic behavior.

ARCHETYPES OF THE INVISIBLE HAND But what to do with the evil? Is it necessary to thoroughly punish and eradicate it through restraints and laws? Thomas Hobbes, for many the greatest philosopher of the modern era, offers a solution. According to Hobbes, man is born infected by evil, and that is why his acts need to be firmly corrected and inspected. He offers the tough, firm hand of ruler-tyrant as a solution, someone with strong executive powers for suppressing all evil.137

If that does not occur, then wantonness will spread among free people, and soon thereafter will be a war with everyone against everyone (bellum omnium contra omnes) and chaos will start to grow. It isn’t necessary to point

out that this consideration has immense impacts for the notion of the economic freedom of individuals, however they are economically engaged. Aquinas stands against this notion: “Every evil is based on some good. Indeed, evil cannot exist by itself, since it has no essence … So, every evil is in a good thing.”138 Evil in and of itself (in and for itself) does not exist.139 It is impossible to commit evil, unless there is some good for whose sake one does the evil deed.140 Pure evil cannot be intended; it may occur only outside intent.141 Evil things (evil decisions) do exist,142 but they defy the basic orientation of human nature.143 Human nature, and sound reason, tend toward good. Even Socrates had a similar opinion: “Anyone who does anything wrong or bad does so involuntarily.”144

To avoid misunderstandings: I do not want to say here that man was or is good but only insofar as his nature, if you will, his core, is good. Man has a good core, a good essence, was created in good, but a distortion occurred and man actually does carry out evil deeds.145 But he has a tendency toward good and is not altogether rotten to the core; man is, to put it in Christian terms, still salvable, including the “worst.” If there is nothing, absolutely nothing good in mankind, what would be the point of saving them?146 This is precisely the human core to which God can speak and address his challenges and calls. Bad things that are carried out are a subset of the good. Man can contemplate evil (murder), but it is carried out in a different intention (perhaps revenge, which is his subjective feeling of justice, and justice is good—he gets revenge out of [his feeling for] justice). Even the greatest evils (such as the Holocaust or witch-burning) are carried out under the pretense (rhetorically but also from the convictions of many) of a greater good, one which was behind this evil (the Nazis argued for a greater Lebensraum [living space, or the need to expand]; the Inquisitors that their acts would rid the world of evil). So man then carried out entirely mistakenly the greatest evil thinkable, but always did so in the (most self-warped) effort toward some kind of good. Intention is not enough for good; knowledge is also necessary.

Evil has its role here in this world, as mentioned before: “For if all evil were prevented, much good would be absent from the universe,”147 Aquinas writes. Elsewhere he mentions that “many goods are present in things which would not occur unless there were evils.”148 And all in all [my emphasis]:

It does not pertain to divine providence to prohibit evil entirely from things … good of the whole takes precedence over the good of a part. It is proper for a governor with foresight to neglect some lack of goodness in a part, so that there may be an increase of goodness in the whole…. If evil were removed from some parts of the universe, much perfection would perish from the universe, whose beauty arises from an ordered unification of evil and good things. In fact, while evil things originate from good things that are defective, still, certain good things also result from them, as a consequence of the providence of the governor. Thus, even a silent pause makes a hymn appealing. Therefore, evil should not have been excluded from things by divine providence.149

In some ways this starts to sound like the thesis that would later come out in Mandeville’s The Fable of the Bees: or, Private Vices, Publick Benefits.150 In his book New Studies in Philosophy, Politics, Economics, and the History of Ideas, F. A. Hayek perceives this context very well; he explicitly makes reference to the unoriginality of Mandeville’s reflection: “Had not even Thomas Aquinas had to admit that multitudae ulilitates impedirentur si omni peccata districte prohiberentur—that much that is useful would be prevented if all sins were strictly prohibited?”151

The idea of the invisible hand, or that an unsystematic and frequently evil effort from an individual in society leads to common benefit, is well known among the ancients as well. It was neither Adam Smith nor Bernard Mandeville, nor even Thomas Aquinas, who was the first to express this principle. The ancient poet Aristophanes writes:

There is a legend of olden time That all our foolish plans and vain conceits Are overlured to work the public good.152

But Aquinas’s conception is aimed elsewhere. Even if God does not want evil,153 Aquinas puts the existence of evil into the context of evidence of God’s existence and providence, and against those who see evidence of the nonexistence of God in evil acts. For the purposes of the welfare of the whole, partial evil must necessarily exist.154 The good of the whole supercedes the good of its parts, as we have shown above. In support of these ideas, Aquinas presents two citations from the Bible:

I form the light and create darkness, I bring prosperity and create disaster; I, the LORD, do all these things.155

And elsewhere:

When a trumpet sounds in a city, do not the people tremble? When disaster comes to a city, has not the LORD caused it?156

If absolute good is to exist, it would certainly be a notion of God. Nevertheless, we see from the citation above that the Hebrews see things in a more complicated light: While it is God who causes peace, he also “causes disaster”. Ultimately it is God who placed the Tree of the Knowledge of Good and Evil in the Garden of Eden, and when people ate of it He commented that “the man has now become like one of us, knowing good and evil.”157 On the other hand, we have again shown that even Satan, the embodiment of evil, plays a dual role; his evil role serves to contribute to some kind of good. But for moral categories of good and evil to exist, for morals to exist, freedom must exist, because we can only speak of morals within the context of free choice. In this sense, good cannot exist without (at least the possibility of) evil. The possibility of evil existed even in a perfect Eden.

Evil therefore cannot be wiped out from the world, nor is that desirable. This conception does not legitimize the idea of laissez-faire directly, but it significantly enriches it. We have already partially shown this in the parable of the weeds. In any case, we have moved far from the tough and thorough wiping out of vices by a governing power. God’s providence does not rule out evil. “Nor was it fitting for the common good to be destroyed in order that individual evil be avoided, especially as God is so powerful that he can direct any evil to a good end.”158 Or, put even more bluntly: “I answer that it is by no means lawful to induce a man to sin, yet it is lawful to make use of another’s sin for a good end, since even God uses all sin for some good, since He draws some good from every evil.”159

Sometimes it is better to harness the devil to the plow than to fight against him. Instead of drawing up huge amounts of energy in the struggle against evil, it is better to use its own energy toward the desired goals; placing a mill on a raging river or harnessing the devil to a cart, as the Czech Saint Prokop did. If you cannot defeat him, trick him. It is wiser and more advantageous to make appropriate use of chaotic natural forces than to try vainly to suppress them in a Sisyphean manner. It is the same curse of evil we already know, thanks to the slip of the tongue of Goethe’s Mephistopheles:

Part of that force which would Do evil evermore, and yet creates the good.160

It is enough to direct and regulate the self-propelled energy of chaos, which nourishes itself and creates a feedback loop of causality, so that it serves our goals, as that saint did. Economics should then mean the art of helmsmanship. The interaction of chaos and free will should not be understood as an obstacle (even if it appears as a stormy sea) but as a resource. Instead of trying to calm the sea down and directing it by threats of violence, one should instead learn how to steer on it. Michael Novak writes interestingly about this problem in his book The Spirit of Democratic Capitalism. He argues that in all existing and historical systems, only the system of democratic capitalism has understood how deeply embedded “sin” is in the human spirit; however, it is not possible for any system to uproot this sin. For this reason, capitalism takes the “fallen world” as the base for reality, and in addition manages to “retransform its energy into creative power.”161

Ultimately God also “plows with the Devil.” He can use and uses this evil as His (albeit according to the interpretation of the passage in Ezekiel, stormy162) servant.

GOOD OR EVIL MAN The question of whether man is good or evil is a key question for the social sciences. “Regulation” will develop from it. If man is evil by nature, then it is necessary to force him toward good (in the context and under the pretext of “social good”) and limit his freedom. If it is a dog-eat-dog world, as Hobbes believes, we need a strong state, a powerful Leviathan that forces men toward (men’s unnatural) good.

But if on the other hand human nature (or something of the ontological core of man’s being, his very “I”) is good, then more laissez-faire is possible. Man can be left alone, because human nature will automatically have a tendency to steer him toward good. State interventions, regulation, and limits to freedom need be applied only where man as part of a whole is not sufficiently (collectively) rational, where spontaneous social coordination works poorly or

where forced coordination is capable of ensuring better results (in the case of externalities, for example). This is one of the key questions for economics: Can the free will of thousands of individuals be relied on, or does society need coordination from above? Which are the areas of human activity where the spontaneous market can achieve optimal results? When does the interaction of free (unregulated) human activity head spontaneously toward good and when does it head toward evil? It is precisely in this question of the good or evil of the human core where various schools’ differing approaches lie. Are we a society of villains or of neighbors?

THE SOCIETY OF NEIGHBORS Love toward one’s neighbor is one of the key messages of Christianity. Man is born as a zoon politikon, a social being.163 We do not come together into societies because of our shortcomings or necessity (this is not the primary reason) but due to our social character.164 Not even the newly created and perfect Adam was supposed to remain in solitude: “The LORD God said: ‘It is not good for the man to be alone.’”165

In the pages of Summa Theologica, Thomas Aquinas argues that man was supposed to live a “social life” even in the Garden of Eden—in a state of perfection and innocence.166 But he goes even further. For him, man is naturally the familiar and friend of every man, which is the absolute opposite notion to Hobbes’s dog-eat-dog world. Aquinas’s man is good and, as a social being, is determined to do good even to others. This has a fundamental influence on the view of society and therefore also on the formation of the (economic) tools with which he operates.

Besides, since “man is naturally a social animal,” he needs to be helped by other men in order to attain his own end. This is most fittingly accomplished by mutual love, which obtains among men. Therefore, by the law of God, which directs men to their ultimate end, mutual love is prescribed for us …. Now, it is natural to all men to love each other. The mark of this is the fact that a man, by some natural prompting, comes to the aid of any man in need, even if he does not know him. For instance, he may call him back from the wrong road, help him up from a fall and other actions like that: “as if every man were naturally the familiar and friend of every man.”167

Aquinas further writes:

For men are of mutual assistance to each other in the knowing of truth, and one man may stimulate another toward the good, and also restrain him from evil. Hence it is said: “As iron sharpens iron, so one man sharpens another.” (Prov. 27:17). And it is said in Ecclesiastes (4:9–12): “Two are better than one, because they have a good return for their work: If one falls down, his friend can help him up. But pity the man who falls and has no one to help him up! Also, if two lie down together, they will keep warm. But how can one keep warm alone? Though one may be overpowered, two can defend themselves. A cord of three strands is not quickly broken.”168

But with such knowledge, Aquinas still sees the existence of rulers as necessary; rulers to correct the free movement of crowds, so that society does not fall apart. Aquinas does not allow for anarchy. The following citation represents this reality in several sentences. In addition he considers the coordination of public interests by a ruler, which creates the central topic of economics.

If, then, it is natural for man to live in the society of many, it is necessary that there exist among men some means by which the group may be governed. For where there are many men together and each one is looking after his own interest, the multitude would be broken up and scattered unless there were also an agency to take care of what appertains to the common-weal. In like manner, the body of a man or any other animal would disintegrate unless there were a general ruling force within the body which watches over the common good of all members. With this in mind, Solomon says (Eccl. 4:9): “Where there is no governor, the people shall fall.”169

Elsewhere Aquinas writes: “Men also adopt different methods in proceeding towards their proposed end, as the diversity of men’s pursuits and actions clearly indicates. Consequently man needs some directive principle to guide him towards his end.”170

Society therefore requires neither a tyrant nor a central planner but a regulator, a ruler-helmsman. So economics must also be epitomized by the helmsman’s art, instead of as a tool for turning rivers or completely remaking them.

REASON AND FAITH

It would be a major misunderstanding to argue that the era of medieval scholastics was a period of blind faith and that humanity had to wait until the Enlightenment for the renewal of reason. If we read Thomas Aquinas with this erroneous perspective, we will again and again be taken aback by how much emphasis he places on the rational part of knowledge. In this regard he appears as one of the most devoted listeners to reason. Many other theologians before and after him appealed to pure revelation and disdained reason under the heading “lean not to your own understanding.”171 For example, Martin Luther later stated that faith is set up as the antithesis of reason, and he called reason “the devil’s whore.”172 For the first time in this context, Aquinas’s quote comes to the fore: “It is impossible that the truth of faith should be opposed to those principles that the human reason knows naturally … for God is the Author of our nature.”173 He requires a dialectic relationship between faith and reason in the sense that one needs the other, and he himself takes great pains that reason be developed as much as possible and that our faith not be misguided.

But Aquinas goes even further and insists that science is important for the teaching of faith, because if something can be undoubtedly proven which evidently resists dogma, then here science has revealed an item of faith which has either been badly interpreted or not understood.174 Reason could not have received higher recognition. He designated the role of science in the following manner: If practical discoveries can be truly proven, the traditional explanation of the Bible must defer, because that interpretation was erroneous. Aquinas’s biographer G. K. Chesterton is convinced that if the whole matter were left to Aquinas and the likes of him, there would have never been such a clash between religion and science.175

Reason is made nearly equal to virtue; revolting against reason was for Aquinas like revolting against God, for “in that field the reason has a right to rule, as a representative of God in Man.”176 According to Chesterton, Aquinas envisages divinity as pure intelligence. A person is as virtuous as the level on which they are able to listen to their reason and later act according to it. Not using reason where possible is a sin—“vincible ignorance is a sin,” he writes.177 In the chapter in which he discusses drunkenness, he classifies drunkenness as a sin precisely because man consciously gives up the use of reason.178 We find an entire range of similar exaltations in Aquinas’s writings. Aquinas was not able to imagine, as wasn’t Descartes years later,179 “God the Deceiver,” who gave man reason and senses only so he could deceive him.

Aquinas revels in reason as far as it goes. In this he is very similar to Thomas H. Huxley, an agnostic who invented the word “agnosticism.” In fact, Aquinas nearly literally accepts Huxley’s definition of the agnostic method: To stick to reason as far as it is possible. The only question is how far is it possible? For at a certain point in argumentation, sooner or later, every rationalist falls back on intuition.180

THE CITY, NATURE, AND FREEDOM Thomas Aquinas also runs into the trade-off between personal independence and social progress, which even Gilgamesh’s civilized friend Enkidu knew. Aquinas writes:

If man were intended to live alone, as many animals do, he would require no other guide to his end. Each man would be a king unto himself, under God, the highest King, inasmuch as he would direct himself in his acts by the light of reason given him from on high. Yet it is natural for man, more than for any other animal, to be a social and political animal, to live in a group. This is clearly a necessity of man’s nature. For all other animals, nature has prepared food, hair as a covering, teeth, horns, claws as means of defence or at least speed in flight, while man alone was made without any natural provisions for these things. Instead of all these, man was endowed with reason … Now, one man alone is not able to procure them all for himself, for one man could not sufficiently provide for life, unassisted. It is therefore natural that man should live in the society of many.181

Specialization meant the necessity of social development from primitive being (just as the humanized Enkidu did) to a higher level. In this sense it is important to note that, as Georg Simmel puts it, “The metropolis has always been the seat of the money economy. Here the multiplicity and concentration of economic exchange gives an importance to the means of exchange which the scantiness of rural commerce would not have allowed.”182

Man alone is unable to ensure all of the happiness society offers. If he lived alone in the desert or on a forgotten island, he would be the ruler of himself. Instead of the material well-being he receives in a specialized society, he would gain the freedom to govern himself and not be subordinate to anyone in a social structure. But if he lives in society and were to use its advantages, he must be naturally part of the order that enables society to head toward a common goal.

CONCLUSION: THE BIBLE AS AN ECONOMIC READING Christianity is the leading religion of our Euro-American civilization. Most of our social and economic ideals come from Christianity or are derived from it. The economy is thus often believed or presented to be more of a social fabric than religious faith itself. If we have such high expectations of these commonly held beliefs (for example, in secularized economic progress, as we will see in the second part of this book), we must treat those beliefs with the same scrutiny as others.

It is surprising how much the economy has in common with the Old and New Testaments. The original sin can be also interpreted as a “sin of consumption,” as Adam and Eve did actually consume something that they had no title to and did not need to consume; that consumption was connected with guilt (as we will see in second part of this book). Most of Jesus’s parables use economic language or context. And the very key term of Christianity— redemption—originally had a purely economic meaning—to redeem, to purchase a slave, and to set him or her free. This undeserved forgiveness of debts, redemption, the forgiveness of sins, can be observed in our culture as well— when the government plays the role of the redeemer and redeems overindebted banks and companies. So did the word sin, which meant debt in Greek, originally have a purely economic meaning. In fact, the key concepts of Christianity would not make sense without economic terminology. And so it appears that the basic messages of Christianity can be better understood in our economic age much better if they are interpreted in the (original) economic terminology. They become much more specific and current. The prayer “forgive us our sins” meaning “cancel our debts” could be heard from the leading banks in the crisis of 2008 and 2009.

Christian thought highlights the concept of what could be called positive unfairness. It is unfair in a positive sense —such as redemption, or the parable of unjustly high wages for workers. It doesn’t matter how hard you try— everyone gets the same reward. Christianity thus largely abolishes the accounting of good and evil. God forgives, which is positively unfair. Christianity introduces the concept of heaven into the great narrative and thus solves the Hebrew problem of divine justice and its manifestation (or lack of it) here on Earth.

We have also discussed gifts and prices, as some things that cannot be bought but must be given. We try to mimic that, often even today, when we pretend not to care about a price or intentionally dilute it. We have discussed the economics of salvation and love as the key binding principle of the universe. We have debated at some length the problem of evil and how evil plays a role in the good scheme of things—and how it can never be totally destroyed. We debated the issue of the invisible hand of the market—how our evil deeds can turn into benefits, but also how good intentions can turn sour. We debated the issue of whether we can truly have evil intentions and studied the concept of the relationship of good and evil. The economic thought of Augustine and Aquinas is also presented as very relevant for understanding of the fabric that makes up today’s world. We debated the good or evil nature of human beings and the world. Finally, we have talked about the relationship between reason and emotions, and about nature versus civilization as the basic state of human existence.

5 Descartes the Mechanic

The standpoint of economic theory is Cartesian. These are the roots of the homo oeconomicus,

as narrow a concept of man as can be imagined … Piero Mini

Myths, faith, and religious teachings were thus far a determining key for explaining the surrounding world, including its “economic” characteristics. The arrival of the scientific era brought changes with it (or, as we will later see, should have brought changes). The era of scientific thought set a goal of pushing through a method of examining the world that would not allow doubt and would be free of any subjective, disputable dimension. Perhaps the most important characteristic of the modern era has been the change in emphasis from the question why? to the question how? This shift is, so to speak, from essence to method. The scientific era has tried to demystify the world around us, to present it in mechanical, mathematical, deterministic, and rational garments and to get rid of axioms that cannot be empirically confirmed, such as faith and religion. But alas, even in the dimension of how? the world around us to this day certainly keeps its secrets—and needs faith and belief to function.

While economics is classified as a social science, it relies the most (mainly mainstream economics) on a mechanical, mathematical, deterministic, and rational world. Thus, it is important to give appropriate attention to this tectonic maneuver. Understanding of the ideas of René Descartes has crucial importance for economists who consider these things, because “an economic position is Cartesian.”1

MAN AS MACHINE Descartes’s scientific approach to perceiving the world unquestionably represented a huge breakthrough, and this is doubly true for economists. We have seen that the notion of the invisible hand of the market existed long before Smith. Homo economicus has gained his (a)moral side from Epicurus, but he acquired his mathematical and mechanical part from René Descartes. Mathematics was considered the original principle of all things as early as the Greek philosopher Pythagoras2 (completely in the spirit of the postmodern era, where our current viewpoints are created only through recycling and combining past stories). Descartes’s ideas, of course, became absolutely key, if not determining, for the methodology of economic science. Economics started to develop at the time when his legacy received widespread recognition. The first economists widely discussed theories of knowledge, and all have proven to be successors to Descartes. His ideas were brought to England by John Locke and David Hume. Through them, Descartes’s teachings penetrated economics as well—and they have remained firmly built into it to this day. In no other social science were the Cartesian ideas accepted with as much enthusiasm as in economics. What did the greatness of Descartes consist of, and what was the fundamental significance of his theories for economists?

Descartes is widely and to a degree deservedly considered a key founder of modern science.3 He changed seeing the world4 and the anthropological understanding of the existence of man immediately in several areas. This scientific (re)construction had impacts on anthropology. Let Mill and Bentham’s utilitarian calculus be an example of the effect on morals and economics; it would later, in modified form, become an inherent part of modern economics.

First, Descartes tried to get rid of tradition, myth, and superstition, but especially subjective nonsystematicness (understand this as a dependence on feelings and emotions). By doing so, he laid the foundations for a new method of systematic examination of the world on a firm (objective) basis. We will later get to how he managed to do this.

Second, after the relatively Aristotelian-Thomistic medieval period, the ancient dualistic representation of the polarities of matter and spirit reentered the world—only the soul to a certain extent was replaced with intellect. So this new dualism was not as much ethical in nature as it was epistemological. Man is the only link between matter and intellect, just as in older dualistic concepts (of man hanging between good and evil). Even here the superiority of intellect over material holds—the rationalist position—which to this day enables economists to create their models without their necessarily having a fixed relationship to empirical reality.

Third, fascinated by the technical progress of the time, the new period introduces the concept of mathematical mechanics as the ontological texture of reality. Mechanics then is promoted from a relatively narrow use in machinery to the highest rung on the ontological ladder.5 If morals are the main texture of reality in the notions of the Hebrews, mercy for the Christians, and love for Augustine, mechanics becomes the main building block in Descartes’s hands. We will return to the difficulties of this notion, but here let us present Mini’s noteworthy

observation: “Despite his superficial emphasis on thinking, Descartes really assigned to thought only a very meager role. The roads to discovery are many, but he acknowledged only one—the mathematical one.”6

The reduction of human anthropology relates to the reduction of intellect to mathematics. There is no room for emotion, chance, or any kind of unfilled space in such a world. Everything relates to each other with a deterministic hardness and the precision of a mechanical watch. Descartes and his heirs “conceived practically everything in mathematical terms —the universe, the body politic, the human body, even human impulses and morality.”7 Cartesian mechanics are excellently summarized in Descartes’s own example in the Treatise on Man, where he perceives the body as “just a statue or a machine made of earth” and its function derived from simple mechanical principles, the same as “clocks, artificial fountains, mills and other machines.”8 This principle allegedly knows how to explain everything—even the things psychology has laboriously tried to do to this day: “Indeed one may compare the nerves of that machine I am describing with the pipes in the works of a fountain … with various devices and strings.”9 This faith is still strong in economics to this day—economic man is a mechanical construct that works on infallible mathematical principles and through pure mechanics, and economists are capable of explaining even his innermost motives.

In the spirit of the Ionian philosophers, Descartes transfers the entire world into one basic parameter of principles for one’s own existence, which for him represents distribution in space, or res extensa, a kind of common denominator of all material things. For Descartes, only a single world exists: “Matter of the heavens and earth is the same.”10 His methodological monism (the effort to transfer or infer everything from one single principle) and the principal equivalence of the spiritual and material worlds play a leading role in economics to this day. The unifying, fundamental, and all-explaining principle to which economics is inclined at almost every opportunity is, understandably, self-interest.

COGITO ERGO SUM Because René Descartes had a truly breakthrough influence on economic anthropology, it would be appropriate to at least briefly summarize his ideas. In the Principles of Philosophy, Descartes tries to throw out anything that could be even slightly doubted. Toward this purpose he forgets everything he knew, remembers what his senses say, and he concentrates solely on logical thinking. In the end, he comes to the conviction that something which makes up these thoughts—therefore he himself, who carries out these thoughts—must necessarily exist.11 He comes to his famous conclusion cogito ergo sum. He bases his philosophy on this new and, according to his convictions, solid foundation. He later comes to evidence of the existence of God—because he finds his notion in thought—and continues further, until in the second part of the book he arrives at the principle of objective existence of material objects and space.

Because material objects, and therefore space as well, can apparently only be perceived by the senses, empiricism, in a philosophical sense, comes into conflict with rationalism. But Descartes tries to hold firmly to a rationalist methodology, one for which he himself clears a path. If, of course, the senses state something different than reason does, reason is right. Even if we do not see that reality, it is more reasonable to trust the logical explanation. Things also exist that are incomprehensible for our senses; they are blind and mute in certain areas, and reason can go places where they cannot reach. Even if particles cannot be split infinitely “in reality,” we are capable of this act in our thoughts (imagination). The real world therefore is a representation of the rational world rather than the world we know from “mere” experience.

But how can we be sure the external world of phenomena (and therefore also of space) exists at all if we cannot believe our own senses? How do we know it is not just a dream? But that would suppose that God is deceiving us and that everything we “see” is just an illusion of space, matter, and time. In certain places Descartes considers the exterior world as a continuous dream, one that objectively does not exist. As Descartes writes, this assumes a God that would want to deceive us. This is an unacceptable idea for him. He does not analyze where he gets his certainty from and relies only on a sort of theological evidence, one which is based on the Christian understanding of God as the giver of light.12 If God is the most true and perfect, He cannot want to deceive us. If we are to assume that God is not intoxicating us with the opiate of dreams,13 we must come to the conclusion that the external material world really exists and that we can examine it. What sort of “scientific proof” is this?

Of all material things, Descartes first deals with our bodies. While they lie in the realm of material world, they are an exception because they are in some way joined with our intellect, which is not subject to matter. Matter residing in space acts on our bodies, which function as a medium, and thus matter communicates with our reason through our senses. Another step leads to the examination of the essence of things that act on our bodies—material items whose principle Descartes seeks. They are not found in anything perceptible by the senses (such as color, hardness, temperature, matter), but only in their arrangement, which can be described in three mathematical characteristics:

arrangement in width, length, and depth (in the basic Cartesian system these are represented by axes x, y, and z).14 The reason why the nature of material things is determined by arrangement in space is shown in the example of a stone. We can imagine that through grinding we can take the hardness away from a stone; we can also recall that a stone that has no color is clear; we can separate weight, the feeling of coldness and warmth, and all similar characteristics. The only substance that we cannot separate from a stone is its arrangement in three dimensions (res extensa). This substance is identical to space.15

MODELS AND MYTHS In the hands of the rationalist Descartes, empirical perceptions (which were at the time of the later medieval scholastic tradition thought of as being in harmony with reason) suffered a defeat, and in the battle for closer proximity to “reality,” reason won. Descartes closes his eyes and meditates: “I suppose, accordingly, that all the things which I see are false (fictitious); I believe that none of those objects which my fallacious memory represents ever existed; I suppose that I possess no senses; I believe that body, figure, extension, motion, and place are merely fictions of my mind. What is there, then, that can be esteemed true? Perhaps this only, that there is absolutely nothing certain.”16 The battle between rationalists and empiricists played out again in later periods, and the results varied; but it was Descartes who struck the historic key blow to the imperfection of our senses.

George Berkeley comments on this in the following way: “Prejudices and errors of sense do from all parts discover themselves to our view; and, endeavoring to correct these by reason, we are insensibly drawn into uncouth paradoxes, difficulties, and inconsistencies, which multiply and grow upon us as we advance in speculation, till at length, having wandered through many intricate mazes, we find ourselves just where we were, or, which is worse, sit down in a forlorn Scepticism.”17 And Galileo is even more blunt: “The new [Cartesian] science has carried out a rape of our perceptions.”18

We can look at the philosophy of René Descartes as a leading example of the paradox of inconsistency. Despite the errors in its foundations, the Cartesian scientific method became the main modus operandi of today’s mainstream economic thought. We have lived to see similar moments in economics as well. Systems containing internal inconsistencies, which are partially in conflict with reality and frequently based on purely and intentionally unrealistic assumptions and which come to absurd conclusions in extremes, are nonetheless successfully applied. It would appear that the system has its lifespan not due to its infallibility or logical consistency, but because of the nonexistence of a competing system (these issues are discussed in greater detail by K. Popper, I. Lakatosh, P. Feyerabend, and finally also by T. S. Kuhn).19 Economic models therefore are not accepted on the basis of greater or lesser truthfulness (even if a correspondence to reality certainly adds to their attractiveness), but rather on the basis of greater or lesser believability, suitability, persuasive force, or correspondence with our internalized faith in the workings of the world (i.e., with borrowed or inherited paradigms or, if you will, prejudices). Scientific and economic models play a similar role as myths when one system (or myth) replaces or destroys another. This is what occurred when theological myth was replaced by scientific myth. We should note when reading Descartes how inconspicuously and carefully he replaces the theological myth with the scientific myth and how he proceeds.20

DOUBTS ABOUT DOUBTING It is paradoxical that Descartes, who wanted to separate pure logic and rationality, presents us with a pleiad of logically unfounded notions, prejudices, and ideologies that he himself believed. His path to pure reliance on reason then “surprisingly” leads back to an affirmation of his previous ideas (prejudices), or such a world as Descartes saw before he started to doubt at all (even if undoubtedly he had his doubts).

Descartes’s “evidence” of God’s existence can serve as an example. It builds on the idea that we bear the notion of God in our thoughts (read: as Descartes bore it); according to him this idea would not be possible if He were not real. Then what was the point of the exercise?

Descartes took the Bible and Thomas Aquinas’s Summa Theologica with him on all his travels, and he also wrote of mystical appearances which he had.21 Of course, if he were not a Christian he would find it difficult to sometimes come to what he wishes to be universally valid conclusions. He makes an even more absurd judgment in the evidence of the existence of external things, or things found outside intellect—in the empirical “phenomenal” world. Put in a simplified fashion, it is unthinkable that our senses deceive, and from this he draws the conclusion that they do not deceive. Descartes, who developed his method precisely and mainly to be rid of traditions and prejudices, establishes them even more firmly.

We are very familiar with the same processes in economics, where on the basis of carefully selected assumptions we come to conclusions that are (understandably and, actually, unevitably) already contained in the assumptions. So, conclusions are really irrelevant (they are merely derived from assumptions); it is the assumptions that are key. (This is quite contrary to the exact opposite notion most hold of the popular versions of science—that assumptions are irrelevant and it is the conclusions that matter.) And so McCloskey notes that Economics, the bible-textbook of mainstream economics by Paul Samuelson, promises scientific “knowledge free of doubt, free from metaphysics, morals and personal conviction. What it is able to deliver renames as scientific methodology the … economic scientist’s metaphysics, morals and personal convictions.”22 The anthropological difference between scientific and prescientific man is that prescientific man explicitly knew the assumptions referred to (articles of faith and myths) and actively accepted them (or rejected them). In contrast, modern man bears his (scientific) faith more or less unconsciously. Religion is accompanied by an explicit profession of faith23 but not science (although it is clear that you must use belief in science as well).24 It is as if modern man is ashamed of his (scientific) faith: This could very well be because it cannot be scientifically proven, which somehow does not correspond with our modern anthropology. The whole concept of “scientific faith” seems to a common ear to be an oxymoron, but it is not. Prescientific man did not bother with scientific evidence and, therefore, did not have to be ashamed of his articles of faith (today we would say prejudices) and could confess them freely. They are nowadays hidden in axioms that are postulated (not confessed in terms of “I believe in …”), never proven; most of scientific faith, however, is laid even before such axioms are even mentioned; this faith rests deeper, so deep we don’t even notice it. Thus, Alfred N. Whitehead criticizes Descartes’s approaches as a “source of those quite unbelievable abstractions by which modern philosophy has been ruined.”25

Through the pretentious (yes, pretentious) doubting of the existence of the real world, Descartes returns in a circle back to the existence of the real world (only this time it is “scientifically proven”). If he truly doubted, he could not pronounce (not even in his dreams) that he believes in an empirical world, one which must be real and not deceptive, and conduct his “evidence” on the basis of these rearrangements. Doubts can therefore be made about the integrity of Descartes’s doubting: We can doubt his doubting. We must search for the meaning of his inquiry, because what use would this exercise be to us if it only confirmed everything we previously believed? In addition, it is actually ironic and paradoxical that Descartes began and gave birth to the foundation of the scientific method and scientific discourse in a dream.26

INFLATIONARY RATIONALITY IN A CIRCLE Kant later raised the thesis that pure reason needs an external, empirical world to be able to think at all. In other words, in order for reason to be able to function, it needs to operate with external stimuli or their concepts. Language itself is a net of abstractions that are meaningless in and of themselves. Rationality in and of itself simply turns inflationarily in a circle; rationality is of itself hollow. On the other hand, empiricism in and of itself is bereft of interpretation; it is lacking meaning, is senseless, is meaningless, and therefore does not exist.27 Facts do not work without a rational perceiver, a certain rational framework in which interpretation, name, and meaning are gained. As Caldwell writes, “at least for science, there are no brute facts.”28

For economists, Descartes’s reduction of man has additional key consequences. From his time, man is defined not by emotion but by logical reasoning. A perceptive individuality falls and is lost in the generality of an objective rationality identical for all. What cannot be calculated or at least proxied with numbers is treated as if it were not real, illusionary. A mathematical equation becomes the ideal of truth: cold, distant, the same for all individuals, historically and spatially constant. Man and reality are reduced to mechanical-mathematical calculus. If this reduction cannot be carried out, it is as if it only testified to a shortage of knowledge and of ignorance—such a preserve remains unchartered territory, mythic and scorned.

YOU WILL ALWAYS DREAM ALONE With this we come to another conclusion, one that is important for economics. By doing this (reducing man and reality to mechanical-mathematical calculus), Descartes also carried out a less generally known step in the direction of the individualization of the individual. Descartes’s man is not defined in the context of society—he does not accept social impulses. Descartes remains completely alone in his dreamworld. Even Plato, who carried out a similar exercise with the deception of the senses two thousand years before Descartes, finally got to the point when a man who has lived his whole life in a cave of dreams (with his friends, whom he later tries to free!) breaks free of his

bonds in the end and comes out of the cave to behold bare reality. Plato’s parable of the cave reaches its climax when he remembers those close to him and with his return to them. But Descartes is closed off in his world, completely alone. After all, rationality doesn’t need others. As Edmund Husserl put it: “Descartes, in fact, inaugurates an entirely new kind of philosophy. Changing its total style, philosophy takes a radical turn: from naive Objectivism to transcendental subjectivism.”29

It is precisely this sociopsychological position from which we can attack Descartes’s first meditational step as well, when he comes to his famous cogito ergo sum. It can nevertheless be said just as well—and perhaps more convincingly—that man gained all his cogitos on the basis of social interaction (as Plato’s story somewhat portrays).30 Philosophers such as Immanuel Kant, Martin Buber, Emmanuel Levinas, and others stand on this side; they define human existence on the basis of individuals meeting with other individuals. According to them, only through meeting with another is the notion of the “I exist” born.

CONCLUSION: OBJECTIVITY AND MANY COLORS In conclusion, let’s mention another of Husserl’s observations. Descartes struggled to set up new, unshakable foundations of science, so that scientific knowledge would be left unified, self-evident to all, and indisputable. Briefly put, he struggled for objectivity (unity, or the unification of points of view) so that he could rid the new philosophy (science) of disputes, doubt, subjectivity, and the disunity of explanations that stem from it. His new science was to be such that everyone would agree on—objectively. In other words, he wanted to remove all doubt.

If we look around ourselves, we can see that a unification of neither scientific viewpoints nor methods occurred and that the opinions of individual philosophers (or scientists, among whom economists, sociologists, or doctors could be counted) drastically differ. Specifically, in economics there is not even agreement on the most fundamental models, and methodology by far is not unified. It is more the agreement on a question that unites a field, not the answers.

Science has not succeeded in being built as Descartes wished. Science is overflowing with doubts. We find ourselves in a similar situation as before Descartes, when world opinion was set by religion. The only difference is that science has become the religion of the modern era. After an excursion into the area (more or less successful) of the transformation of myth in science, let us return to the main setting of economic thinking. Let us start with a man who has influenced economic thinking to the present day, despite the fact that only a couple of sentences are devoted to him in economic theory textbooks, Bernard Mandeville.