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Aristotle vs. Plato: The distributive origins of the Cold War

Theocharis Grigoriadis ()

No 2018/9, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: Competing definitions of justice in Plato's Republic and Aristotle's Politics indicate the existence of two distinct economic systems with different normative priorities. The three-class society of the Platonic economy (guardians, auxiliaries, producers) gives rise to guardians who by virtue are expected to enforce output targets on producers directly or through auxiliaries. The three-class society of the Aristotelian economy (rich, middle, poor) facilitates the emergence of different ruling coalitions and compensates efficiency losses of vertical production processes with political gains derived from representative governance. In the Aristotelian economy, the middle class is better off than in the Platonic economy (auxiliaries), because a just society (polity) is achieved under its rule. I argue that the equilibrium solutions of the Platonic and Aristotelian systems provide the normative foundations for the distinction between plan and market.

Keywords: Plato; Aristotle; central planning; market mechanism; political regimes; economic systems (search for similar items in EconPapers)
JEL-codes: D63 P11 P14 P16 P21 P26 P52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hpe, nep-knm and nep-pol
Date: 2018
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