Aristotle vs. Plato: The Distributive Origins of the Cold War

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.