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I = S - M

The modern way of thinking about economics has been I = M - S Where I is the I as in me, M is what is 'mine' and S is what ...

6/5/14

Xenophon's The Economist (written somewhere around 400 B.C.) is a dialogue between Socrates and Critobulus. They are chatting about economics when the subject of wealth, of rich and poor, comes up. 

Socrates says he is rich enough already but feels compassion for Critobulus whom he sees as singularly poor. 

At this Critobulus laughs out loud! He asks teasingly what Socrates thinks each of their fortunes would fetch in the market. 

Socrates answers that everything that he owns could be sold for a total of 5 minae whereas Critobulus' property would fetch at least 100 times as much. 

Critobulus then condescendingly questions Socrates on how it could be that given Socrates' own reflection of the market value of their respective assets Socrates could still assert that Socrates was the one with no need of further wealth but that Critobulus was to be pitied for his poverty. 

Socrates replies that what little he possesses is more than sufficient for his wants whereas Critobulus, considering his lifestyle and obligations, would be barely well off if what he owned were to be multiplied by 3!

Socrates explains Critobulus' poverty thus: 

1. Critobulus is expected to offer many costly sacrifices failing which neither the gods nor men would tolerate him. 

2. Critobulus must welcome a number of foreigners as guests and entertain them handsomely. 

3. Critobulus must feast his fellow citizens and ply them with all kinds of favors or else lose their support. 

4. The State expects a man of Critobulus' position to make large contributions such as the rearing of studs, the training of choruses, the superintendence of gymnastic schools, and the conducting of consular duties. 

5. In the event of war, Critobulus is expected to make large contributions and pay onerous war taxes which are draining and difficult for him to support. 

In the event that any of the above 5 expectations are not met by Critobulus, the Citizens of Athens would treat Critobulus as severely as if they had caught him stealing their own property. 

Socrates then explains that were he, Socrates, ever in need of anything, his friends would help him out at trifling cost to themselves. Were Critobulus in need, none of his friends could help him, since they themselves depended on Critobulus' generosity for their own wealth. 

If we treat this wonderful dialogue from almost two and a half thousand years ago as an allegory, a story which can be interpreted to reveal a hidden meaning, it becomes a powerful story about neoclassical modern economics and gothic Gandhian economics. 


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