The ethical foundations of economics in ancient Greece, focussing on Socrates and Xenophon

Purpose – Economics had a strong linkage to ethics up to the 1930s but this has virtually disappeared today. Amartya Sen first sketched the historical relationship in his book On Ethics & Economics. This article seeks to explore the ethical foundations of economics in ancient Greece, focussing on Socrates and Xenophon. Design/methodology/approach – Various ancient Greek primary sources are used to investigate the foundations of economics as an ethical enterprise. For Socrates, the primary sources are the reports of his conversations by two students: Plato and Xenophon. For Xenophon, one has to rely upon his own writings, which are extensive and have survived in good condition. Findings – For Socrates, human flourishing (eudaimonia) was the goal, rather than great accumulation of material goods. Xenophon accepts private property and the division of labour within certain ethical limits. In his work, the development of the ethical approach to household management (oikonomia or oikonomike), or microeconomics, within the context of the Greek city (polis) can be seen. Friendship (philia) and gentlemanship (kalokagathia) are discussed together with oikonomia as a united package. Further, Xenophon anticipates several elements of Sen's understanding of good human functioning. There is a strong linkage between ethics and economics in Socrates and Xenophon. Originality/value – While great efforts have been devoted to tracing the origins of Sen's capability framework back to Aristotle, this article represents the first attempt to trace that framework back further, to Socrates and Xenophon. JEL classification: A12, A13, B11