The Sword of Damocles

The Sword of Damocles

The Sword of Damocles is an object in a Greek legend which is designed to illustrate the perils of being in a position of power. The term is often used in popular culture to talk about an imminent threat or peril, with the idiom “the Sword of Damocles” in reference to such a threat dating back to around 1747, along with the related concept of “hanging by a thread.” The story of Damocles is relatively brief, and as a result many people are familiar with it.

According to legend, Damocles was a courtier in the palace of Dionysius II, a king who ruled Syracuse in the 4th century BCE. Like many courtiers, Damocles constantly flattered the king, in the hopes that he would be given a position of greater power in the court. Apparently, Dionysius tired of the constant flattery, and he asked Damocles if the courtier would like to switch places for a day, to see what it would be like to be a ruler.

Damocles eagerly assented, and spent a day being waited on by the king and other attendants. Towards the end of the day, while seated at dinner, Damocles looked up to see a heavy sword suspended directly over his head, hanging by a hair. In a panic, he asked Dionysius about the meaning of the sword, and the ruler explained that he wanted to show Damocles what it was like to be in a position of power, which might seem privileged from a distance to the casual eye but was actually quite dangerous.

The sword terrified Damocles into fleeing the court, with no more thoughts of power in his head, and the parable about the Sword of Damocles became a symbol for the hidden dangers of power. Timaeus, an Ancient Greek historian, recounted the parable about the Sword of Damocles, and it was picked up by Cicero several centuries later, entering popular culture in Europe. In the 17th century, the concept of the Sword of Damocles appeared in many works by popular authors and artists, making many people in the West familiar with the idea even if they hadn’t read Cicero.

The concept of hanging by a thread as a leader is very poignant. It illustrates the incredible danger which many leaders find themselves in, as they are often beset on all sides both literally and figuratively, making their positions far from enjoyable. The Sword of Damocles is a somber reminder that power comes with many dangers attached.

Aristotle: Who Should Rule?

Aristotle

This brings us to perhaps the most contentious of political questions: how should the regime be organized? Another way of putting this is: who should rule? In Books IV-VI Aristotle explores this question by looking at the kinds of regimes that actually existed in the Greek world and answering the question of who actually does rule. By closely examining regimes that actually exist, we can draw conclusions about the merits and drawbacks of each. Like political scientists today, he studied the particular political phenomena of his time in order to draw larger conclusions about how regimes and political institutions work and how they should work. As has been mentioned above, in order to do this, he sent his students throughout Greece to collect information on the regimes and histories of the Greek cities, and he uses this information throughout the Politics to provide examples that support his arguments. (According to Diogenes Laertius, histories and descriptions of the regimes of 158 cities were written, but only one of these has come down to the present: the Constitution of Athens mentioned above).

Another way he used this data was to create a typology of regimes that was so successful that it ended up being used until the time of Machiavelli nearly 2000 years later. He used two criteria to sort the regimes into six categories.

The first criterion that is used to distinguish among different kinds of regimes is the number of those ruling: one man, a few men, or the many. The second is perhaps a little more unexpected: do those in power, however many they are, rule only in their own interest or do they rule in the interest of all the citizens? “[T]hose regimes which look to the common advantage are correct regimes according to what is unqualifiedly just, while those which look only to the advantage of the rulers are errant, and are all deviations from the correct regimes; for they involve mastery, but the city is a partnership of free persons” (1279a16).

Having established these as the relevant criteria, in Book III Chapter 7 Aristotle sets out the six kinds of regimes. The correct regimes are monarchy (rule by one man for the common good), aristocracy (rule by a few for the common good), and polity (rule by the many for the common good); the flawed or deviant regimes are tyranny (rule by one man in his own interest), oligarchy (rule by the few in their own interest), and democracy (rule by the many in their own interest). Aristotle later ranks them in order of goodness, with monarchy the best, aristocracy the next best, then polity, democracy, oligarchy, and tyranny (1289a38). People in Western societies are used to thinking of democracy as a good form of government – maybe the only good form of government – but Aristotle considers it one of the flawed regimes (although it is the least bad of the three) and you should keep that in mind in his discussion of it. You should also keep in mind that by the “common good” Aristotle means the common good of the citizens, and not necessarily all the residents of the city. The women, slaves, and manual laborers are in the city for the good of the citizens.

Almost immediately after this typology is created, Aristotle clarifies it: the real distinction between oligarchy and democracy is in fact the distinction between whether the wealthy or the poor rule (1279b39), not whether the many or the few rule. Since it is always the case that the poor are many while the wealthy are few, it looks like it is the number of the rulers rather than their wealth which distinguishes the two kinds of regimes (he elaborates on this in IV.4). All cities have these two groups, the many poor and the few wealthy, and Aristotle was well aware that it was the conflict between these two groups that caused political instability in the cities, even leading to civil wars (Thucydides describes this in his History of the Peloponnesian War, and the Constitution of Athens also discusses the consequences of this conflict). Aristotle therefore spends a great deal of time discussing these two regimes and the problem of political instability, and we will focus on this problem as well.

First, however, let us briefly consider with Aristotle one other valid claim to rule. Those who are most virtuous have, Aristotle says, the strongest claim of all to rule. If the city exists for the sake of developing virtue in the citizens, then those who have the most virtue are the most fit to rule; they will rule best, and on behalf of all the citizens, establishing laws that lead others to virtue. However, if one man or a few men of exceptional virtue exist in the regime, we will be outside of politics: “If there is one person so outstanding by his excess of virtue – or a number of persons, though not enough to provide a full complement for the city – that the virtue of all the others and their political capacity is not commensurable…such persons can no longer be regarded as part of the city” (1284a4). It would be wrong for the other people in the city to claim the right to rule over them or share rule with them, just as it would be wrong for people to claim the right to share power with Zeus. The proper thing would be to obey them (1284b28). But this situation is extremely unlikely (1287b40). Instead, cities will be made up of people who are similar and equal, which leads to problems of its own.

The most pervasive of these is that oligarchs and democrats each advance a claim to political power based on justice. For Aristotle, justice dictates that equal people should get equal things, and unequal people should get unequal things. If, for example, two students turn in essays of identical quality, they should each get the same grade. Their work is equal, and so the reward should be too. If they turn in essays of different quality, they should get different grades which reflect the differences in their work. But the standards used for grading papers are reasonably straightforward, and the consequences of this judgment are not that important, relatively speaking – they certainly are not worth fighting and dying for. But the stakes are raised when we ask how we should judge the question of who should rule, for the standards here are not straightforward and disagreement over the answer to this question frequently does lead men (and women) to fight and die.

What does justice require when political power is being distributed? Aristotle says that both groups – the oligarchs and democrats – offer judgments about this, but neither of them gets it right, because “the judgment concerns themselves, and most people are bad judges concerning their own things” (1280a14). (This was the political problem that was of most concern to the authors of the United States Constitution: given that people are self-interested and ambitious, who can be trusted with power? Their answer differs from Aristotle’s, but it is worth pointing out the persistence of the problem and the difficulty of solving it). The oligarchs assert that their greater wealth entitles them to greater power, which means that they alone should rule, while the democrats say that the fact that all are equally free entitles each citizen to an equal share of political power (which, because most people are poor, means that in effect the poor rule). If the oligarchs’ claim seems ridiculous, you should keep in mind that the American colonies had property qualifications for voting; those who could not prove a certain level of wealth were not allowed to vote. And poll taxes, which required people to pay a tax in order to vote and therefore kept many poor citizens (including almost all African-Americans) from voting, were not eliminated in the United States until the mid-20th century. At any rate, each of these claims to rule, Aristotle says, is partially correct but partially wrong. We will consider the nature of democracy and oligarchy shortly.

Aristotle also in Book III argues for a principle that has become one of the bedrock principles of liberal democracy: we ought, to the extent possible, allow the law to rule. “One who asks the law to rule, therefore, is held to be asking god and intellect alone to rule, while one who asks man adds the beast. Desire is a thing of this sort; and spiritedness perverts rulers and the best men. Hence law is intellect without appetite” (1287a28). This is not to say that the law is unbiased. It will reflect the bias of the regime, as it must, because the law reinforces the principles of the regime and helps educate the citizens in those principles so that they will support the regime. But in any particular case, the law, having been established in advance, is impartial, whereas a human judge will find it hard to resist judging in his own interest, according to his own desires and appetites, which can easily lead to injustice. Also, if this kind of power is left in the hands of men rather than with the laws, there will be a desperate struggle to control these offices and their benefits, and this will be another cause of civil war. So whatever regime is in power should, to the extent possible, allow the laws to rule. Ruling in accordance with one’s wishes at any particular time is one of the hallmarks of tyranny (it is the same way masters rule over slaves), and it is also, Aristotle says, typical of a certain kind of democracy, which rules by decree rather than according to settled laws. In these cases we are no longer dealing with politics at all, “For where the laws do not rule there is no regime” (1292b30). There are masters and slaves, but there are no citizens.

 

Dr. Edward Everett Hale, Senate Chaplain

Edward Everett Hale

 “Do you pray for the Senators, Dr. Hale? someone asked the chaplain. No, I look at the Senators and pray for the country.”  

 

EDWARD EVERETT HALE, Senate chaplain. The celebrated anecdote is not so unambiguous as it appears. There is no reason to doubt the authenticity of Hales reply, but it should be understood within a framework of respect for the senators as well as concern for the country. He knew every one of them personally and regarded them, as he said in his preface to Prayers in The Senate , as intelligent men, in very close daily intimacy with each other, in the discharge of a common duty of the greatest importance.John R. Adams, Edward Everett Hale,

Karl Marx vs Adam Smith – The Conclusion

Grey Matter has posted a great deal of material this week and we ask that you review, either on our Facebook page, Grey Matter or here on our blog, the information on Adam Smith vs Karl Marx. It is particularly timely this week as the Presidential debates in the United States are taking place. The information we have shared should help solidify your view of your respective candidates position on economics.

The best way to learn this material is read and reread the posts.  You will find that after doing this you will hear things, as in the case of the Presidential candidates, that you never did before.  This is the purpose and goal of Grey Matter!!!!

It is one thing to memorize information and something totally different to think about information and use it wisely.  Try this and let us know how it worked for you.

 

Adam Smith vs Karl Marx

James R. Otteson, PhD Joint Professor of Philosophy and Economics, Yeshiva University  wrote this incredible paper comparing Adam Smith and Karl Marx.  In order to maximize the benefit of the material from the past few days we highly recommend reading and rereading Dr. Otteson’s fantastic work.  A link to the paper in its entirely is provided below.  A special thanks to Dr. Otteson and the material has been used with his permission.

Adam-Smith-and-the-Classical-Liberal-Tradition-10-Read-Only-Compatibility-Mode

The Dynamics of Capitalism – Harvard University Working Paper

Beautiful canteen of Harvard University

The Dynamics of Capitalism Faculty Research Working Paper Series F.M. Scherer Harvard Kennedy School January 2010

Two centuries of extraordinary economic growth in capitalist societies are outlined in a compelling Harvard Kennedy School Working Paper authored by Professor emeritus F.M. Scherer.

“The Dynamics of Capitalism” offers an historical perspective of the roots and consequences of free market economic systems in the United States, the UK, France, Japan and other nations where public policy has promoted classic capitalist principles.

On the macroeconomic level Scherer argues that capitalistic societies in general have achieved sustained increases in their annual gross domestic products (GDPs) as innovation begat efficiencies in production which, in turn, transformed a primarily agricultural economy into a manufacturing and service economy.

Improved technologies, Scherer argues, have resulted in increased product supply, subsequently leading to increased consumer demand, fueling further economic growth and increased prosperity for workers.

“The average U.S. manufacturing worker of 2005 enjoyed a real wage 4.3 times that of his 1890 counterpart,” Scherer writes. “Nor did a reserve army of the unemployed allow employers to extract longer working hours from their workers. Between 1890 and 2005, the average work week in manufacturing dropped from 54 to 40.7 hours.”

Scherer concludes that while capitalism is “not without problems… it is hard to conceive of a practical economic system exhibiting superior dynamic performance, notably, in the opportunity and incentive free markets provide to capitalistic entrepreneurs for technological innovation — more efficient production processes, new products conferring superior consumer utility, and better methods of business organization — which in turn has raised living standards by astonishing amounts.”

F.M. Scherer is professor of public policy and corporate management in the Aetna Chair emeritus at Harvard Kennedy School. From 1974 to 1976, he was chief economist at the Federal Trade Commission. His research specialties are industrial economics and the economics of technological change.

The Dynamics of Capitalism – LINK TO WORKING PAPER

Karl Marx on Economics

Karl Marx

Capital Volume 1 begins with an analysis of the idea of commodity production. A commodity is defined as a useful external object, produced for exchange on a market. Thus two necessary conditions for commodity production are the existence of a market, in which exchange can take place, and a social division of labour, in which different people produce different products, without which there would be no motivation for exchange. Marx suggests that commodities have both use-value — a use in other words — and an exchange-value — initially to be understood as their price. Use value can easily be understood, so Marx says, but he insists that exchange value is a puzzling phenomenon, and relative exchange values need to be explained. Why does a quantity of one commodity exchange for a given quantity of another commodity? His explanation is in terms of the labour input required to produce the commodity, or rather, the socially necessary labour, which is labour exerted at the average level of intensity and productivity for that branch of activity within the economy. Thus the labour theory of value asserts that the value of a commodity is determined by the quantity of socially necessary labour time required to produce it. Marx provides a two stage argument for the labour theory of value. The first stage is to argue that if two objects can be compared in the sense of being put on either side of an equals sign, then there must be a ‘third thing of identical magnitude in both of them’ to which they are both reducible. As commodities can be exchanged against each other, there must, Marx argues, be a third thing that they have in common. This then motivates the second stage, which is a search for the appropriate ‘third thing’, which is labour in Marx’s view, as the only plausible common element. Both steps of the argument are, of course, highly contestable.

Capitalism is distinctive, Marx argues, in that it involves not merely the exchange of commodities, but the advancement of capital, in the form of money, with the purpose of generating profit through the purchase of commodities and their transformation into other commodities which can command a higher price, and thus yield a profit. Marx claims that no previous theorist has been able adequately to explain how capitalism as a whole can make a profit. Marx’s own solution relies on the idea of exploitation of the worker. In setting up conditions of production the capitalist purchases the worker’s labour power — his ability to labour — for the day. The cost of this commodity is determined in the same way as the cost of every other; i.e. in terms of the amount of socially necessary labour power required to produce it. In this case the value of a day’s labour power is the value of the commodities necessary to keep the worker alive for a day. Suppose that such commodities take four hours to produce. Thus the first four hours of the working day is spent on producing value equivalent to the value of the wages the worker will be paid. This is known as necessary labour. Any work the worker does above this is known as surplus labour, producing surplus value for the capitalist. Surplus value, according to Marx, is the source of all profit. In Marx’s analysis labour power is the only commodity which can produce more value than it is worth, and for this reason it is known as variable capital. Other commodities simply pass their value on to the finished commodities, but do not create any extra value. They are known as constant capital. Profit, then, is the result of the labour performed by the worker beyond that necessary to create the value of his or her wages. This is the surplus value theory of profit.

It appears to follow from this analysis that as industry becomes more mechanised, using more constant capital and less variable capital, the rate of profit ought to fall. For as a proportion less capital will be advanced on labour, and only labour can create value. In Capital Volume 3 Marx does indeed make the prediction that the rate of profit will fall over time, and this is one of the factors which leads to the downfall of capitalism. (However, as pointed out by Marx’s able expositor Paul Sweezy in The Theory of Capitalist Development, the analysis is problematic.) A further consequence of this analysis is a difficulty for the theory that Marx did recognise, and tried, albeit unsuccessfully, to meet also in Capital Volume 3. It follows from the analysis so far that labour intensive industries ought to have a higher rate of profit than those which use less labour. Not only is this empirically false, it is theoretically unacceptable. Accordingly, Marx argued that in real economic life prices vary in a systematic way from values. Providing the mathematics to explain this is known as the transformation problem, and Marx’s own attempt suffers from technical difficulties. Although there are known techniques for solving this problem now (albeit with unwelcome side consequences), we should recall that the labour theory of value was initially motivated as an intuitively plausible theory of price. But when the connection between price and value is rendered as indirect as it is in the final theory, the intuitive motivation of the theory drains away. But even if the defender of the theory is still not ready to concede defeat, a further objection appears devastating. Marx’s assertion that only labour can create surplus value is unsupported by any argument or analysis, and can be argued to be merely an artifact of the nature of his presentation. Any commodity can be picked to play a similar role. Consequently with equal justification one could set out a corn theory of value, arguing that corn has the unique power of creating more value than it costs. Formally this would be identical to the labour theory of value.

Although Marx’s economic analysis is based on the discredited labour theory of value, there are elements of his theory that remain of worth. The Cambridge economist Joan Robinson, in An Essay on Marxian Economics, picked out two aspects of particular note. First, Marx’s refusal to accept that capitalism involves a harmony of interests between worker and capitalist, replacing this with a class based analysis of the worker’s struggle for better wages and conditions of work, versus the capitalist’s drive for ever greater profits. Second, Marx’s denial that there is any long-run tendency to equilibrium in the market, and his descriptions of mechanisms which underlie the trade-cycle of boom and bust. Both provide a salutary corrective to aspects of orthodox economic theory.