Greek poet Hesiod and the introduction of three fundamental economic themes : The Indicator from Planet Money The first milestone in the history of economics was an 8th century B.C. poem — a lecture by an ancient Greek poet to his deadbeat brother.
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The Economics of Gods and Mortals

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The Economics of Gods and Mortals

The Economics of Gods and Mortals

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This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.


And I'm Cardiff Garcia. There probably isn't anybody out there who would argue against the idea that the coronavirus pandemic has painfully upended the entire global economy.

VANEK SMITH: It has accelerated changes in the way entire industries function and the ways in which people live and work and interact with each other. And just like earlier crises, it is forcing economists to reevaluate what they know about how the economy works.

GARCIA: So in our second episode of summer Friday economic lessons, we thought we'd take the opportunity to get back to basics - to look at the moment when some of the fundamental ideas in economics were first introduced, all the way back in the eighth century B.C. And this is from an episode that we aired in February of this year.


GARCIA: Do you ever wonder where economics came from?


GARCIA: Or is that just us? Might just be us.

VANEK SMITH: Also probably yes.


VANEK SMITH: So the first-ever work of economics that we know of was an ancient Greek poem from the eighth century B.C. It was called "Works And Days" by the poet Hesiod. And it wasn't anything like the more famous ancient Greek poems from that time, like the "Iliad" or the "Odyssey" - you know, poems about war and conquest and Trojan horses and revenge and seafaring.

GARCIA: Yeah, Hesiod's "Works And Days" was a different kind of poem. Here's how Steven Medema, a historian of economic thought at Duke University, describes it.

STEVEN MEDEMA: It's not an epic tale. You know, there's no adventure. There's no, you know, lovely young maiden waiting at the other end of the journey. It's just Hesiod lecturing his brother (laughter), telling him to quit being such a jerk.

VANEK SMITH: So here's what was going on. Hesiod's brother Perses was, like, the original slacker. The two brothers had inherited this big estate from their parents, but Perses had blown his half of the wealth and was coming after Hesiod's half, bribing local Greek officials to give him more of it.

GARCIA: Yeah, so Hesiod responded by doing what any of us would do.

VANEK SMITH: Lawyered up.


VANEK SMITH: (Laughter).

GARCIA: He invoked the Muses and then wrote a long poem about the virtues of hard work.

VANEK SMITH: That was going to be my second guess.

GARCIA: (Laughter) Yeah - shaming Perses and those corrupt local officials. That's right - a Greek poet telling his brother to stop being such a lazy freeloader is the first-ever milestone in the history of economics, the very first place where the kind of analytical reasoning used in economics is found, Steven says.

VANEK SMITH: Stephen is the author of a book called "The Economics Book: From Xenophon To Cryptocurrency, 250 Milestones In The History Of Economics." It's a good title (laughter).

GARCIA: Yeah, lovely.

VANEK SMITH: And the first of these milestones he talks about is Hesiod's "Works And Days," and the ideas that Hesiod presents in his poem are still recognizable as concepts that are fundamental to economics today.


GARCIA: Ladies and gentlemen, a passage from Hesiod's poem "Works And Days."

VANEK SMITH: (Reading) Formerly, the tribes of men on Earth lived remote from ills without harsh toils and the grievous sicknesses that are deadly to men.

GARCIA: Yeah, one of the stories that Hesiod tells in "Works And Days" is about why hard work is needed if men want to build up their wealth. And, yes, he was referring just to men...

VANEK SMITH: (Laughter).

GARCIA: ...Back then. That was not a super progressive time.

VANEK SMITH: Well, it was eighth century B.C.


VANEK SMITH: So we'll give him a pass.

GARCIA: But there was a former time, according to this mythology, when food and other things were abundant, and the Earth provided all that men could want.

VANEK SMITH: But then Prometheus, a Titan, tricked Zeus, king of the gods, and stole the use of fire from the gods so that men could use it. Zeus, writes Hesiod, responded angrily by sending to Earth a terrible affliction.

GARCIA: (Reading) To set against the fire, I shall give them an affliction in which they will all delight as they embrace their own misfortune.

VANEK SMITH: And their misfortune was a woman (laughter).

GARCIA: Yeah, that's how - I said he wasn't a super woke writer.

VANEK SMITH: Specifically, a woman named Pandora, whose jar or box unleashed terrible things upon all mortals when she opened it. One of those hardships was that for people to get what they wanted, they would have to work for it. Food, for instance, as Hesiod writes, was now concealed by the gods, so people would have to toil in the fields if they wanted something to eat.

GARCIA: In other words, the gods had introduced scarcity to the world. And scarcity is the first theme we're going to discuss from the poem. Steven Medema, author of "The Economics Book," says that the economics definition of scarcity, though, is different from the way that normal people use it when they mean a shortage of something that might run out.

MEDEMA: When the economist talks about scarcity, what he's really talking about is available resources are limited relative to human wants.

VANEK SMITH: Scarcity is Economics 101 - the idea that the world has finite resources, so we have to make choices about how to use those resources.

GARCIA: Like, land is a resource. So if you use land to ride horses or, I don't know, throw keg parties or whatever...

VANEK SMITH: (Laughter).

GARCIA: ...You're also choosing not to use it as farmland, and crops won't grow.

VANEK SMITH: And here, Hesiod is using the concept of scarcity, unleashed by Pandora's jar, to lecture his brother Perses on why hard work is a moral virtue after Perses had blown his half of the family money.

MEDEMA: And Perses squandered a whole bunch of that. And now Hesiod's saying, you got to work; you need to earn your way, he's arguing, and if you don't, you're not going to be well-viewed by the people around you.

VANEK SMITH: Which brings us to the second economic theme in Hesiod's poem, shame - namely, the role of shame in a market economy. Steven says this kind of societal disapproval can help an economy work better if it creates social norms of fairness and trust. And Hesiod writes about the importance of property rights, the idea that if you earn something yourself, you get to keep it for yourself - or, you know, you can also voluntarily trade it for something else. Without property rights, people might not work as hard because then the stuff they make could be taken from them.

GARCIA: This was an early iteration of the idea that the law and also a sense of shame can reinforce good social norms and respect for property rights and that this is good for a whole economy. That's true of countries to this very day, Steven says.

MEDEMA: Perses, Hesiod's brother, is trying to cheat Hesiod out of his own share of the inheritance, right? He's not respecting Hesiod's property rights. And so there's that sort of personal lesson to tell with the much broader or more general implications.

GARCIA: Which brings us to the third big economic theme in "Works And Days" - the role of envy in the economy. Hesiod writes that when you look at the wealth of others and see that they have worked hard for that wealth, then it might lead you to work hard to attain that same wealth. Hesiod refers to this form of envy as strife, and he says it is good for mortals. But Steven says economists know that strife by a different name.

MEDEMA: When he uses the word strife, the economist reads the word competition. And there's good competition, and there's destructive competition. And what he's emphasizing here, of course, is the good competition, right? So for Hesiod, the motivation to work hard or at least part of it is - it's a keeping-up-with-the-Joneses effect, right? That I want to have what that person has, and so I'm going to work hard so I can be like her.

GARCIA: Or keeping up with, like - I don't know - Demosthenes effect?

VANEK SMITH: (Laughter).

GARCIA: What's the Jones of back then?

VANEK SMITH: I don't know.

GARCIA: Me neither. Perses was envious of Hesiod's wealth, and Hesiod was trying to convince Perses of a better alternative, a more ethical alternative, to satisfying his envy than to seize Hesiod's half of the wealth - work hard, build the wealth yourself, and the gods will bless you.

VANEK SMITH: And this is an underlying theme in "Works And Days" - that peaceful competition is better than destructive seizing or conquest. This can apply to countries as much as it applies to feuding brothers from ancient Greece. Hesiod writes, quote, "violence is bad for a lowly man; not even a man of worth can carry it easily."

GARCIA: And it's an economically sound lesson. But Steven adds that economic growth can take a long time and a lot of work, whereas theft and conquest...

VANEK SMITH: (Laughter).

GARCIA: ...Are always tempting because they're easier. You just take somebody else's stuff.

VANEK SMITH: You just take it - just take it.

GARCIA: And so there's something kind of sad about the fact that Hesiod wrote all this back in the eighth century B.C. because conquest, imperialism, seizing unearned wealth - these were still the norm until at least a couple of hundred years ago, and they are still with us now in some places.

VANEK SMITH: Oh, yeah. Hesiod's economic analysis, with all its references to the Muses and the gods, was - you know, it was primitive because he was a man of his time. But in understanding the importance of stability and peace for economic prosperity, in a lot of ways I think he was ahead of our time.

This episode of THE INDICATOR was produced by Darius Rafieyan. Our editor is Paddy Hirsch. Our intern and fact-checker is Brittany Cronin. And THE INDICATOR is a production of NPR.


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