“Laches” by Plato (translated by Rosamond Kent Sprague)

This dialogue is on the Greek concept of andreia, literally meaning manliness, but most often translated by moderns as courage. Socrates and his interlocutors begin by seeking to define the concept and then to ruminate on its worth. As in many of Plato’s Socratic dialogues, there is no satisfactory conclusion to the debate. The pretext of the conversation is the proper manner for the general education of two particular noble youth and, only secondarily, the benefits of instilling courage in them. To that end, Socrates initially comments, “I think it is by knowledge that one ought to make decisions, if one is to make them well, and not by majority rule.”

Nicias gives due praise, of sorts, to Socrates’ methods, “Whoever comes into close contact with Socrates and associates with him in conversation must necessarily, even if he began by conversing about something quite different in the first place, keep on being led about by the man’s arguments until he submits to answering questions about himself concerning both his present manner of life and the life he has lived hitherto. And when he does submit to this questioning, you don’t realize that Socrates will not let him go before he has well and truly tested every last detail…. I think that a man who does not run away from such treatment but is willing, according to the saying of Solon, to value learning as long as he lives, not supposing that old age brings him wisdom of itself, will necessarily pay more attention to the rest of his life.”

For Socrates, it is necessary to strip away the layers and to get down to the nature of the thing in itself—in this case, courage. “Whenever a man considers a thing for the sake of another thing, he is taking counsel about that thing for the sake of which he was considering, and not about what he was investigating for the sake of something else.” As is his want, Socrates leads the debate around in circles, questioning conclusions just previously agreed to and pushing the point of argument to all its extremes, “Now foolish daring and endurance was found by us to be not only disgraceful but harmful, in what we said earlier…. But now, on the contrary, we are saying that a disgraceful thing, foolish endurance, is courage.” There is no conclusion to this dialogue, but Socrates does propose, “In addition to courage, I call temperance and justice and everything else of this kind parts of virtue. Don't you?”

“Daniel Deronda” by George Eliot

Eliot’s final novel is a philosophical meditation on the nature of love, duty, and religion. The flawed heroine of the story is Gwendolen, a flighty beauty, who thinks a little too highly of herself, “That she was to be married some time or other she would have felt obliged to admit; and that her marriage would not be of a middling kind, such as most girls were contented with, she felt quickly, unargumentatively sure. But her thoughts never dwelt on marriage as a fulfillment of her ambition; the dramas in which she imagined herself a heroine were not wrought up to that close. To be very much sued or hopelessly sighed for as a bride was indeed an indispensable and agreeable guarantee of womanly power; but to become a wife and wear all the domestic fetters of that condition, was on the whole a vexatious necessity. Her observation of matrimony had inclined her to think it rather a dreary state.”

The eponymous hero of the novel Eliot describes thus, Daniel Deronda “was moved by an affectionateness such as we are apt to call feminine, disposing him to yield in ordinary details, while he had a certain inflexibility of judgment, an independence of opinion, held to be rightfully masculine…. True, when a young man has a fine person, no eccentricity of manners, the education of a gentleman, and a present income, it is not customary to feel a prying curiosity about his way of thinking, or his peculiar tastes.”

Wise beyond his years, Deronda ends up being a mentor, advisor, and confidante to more than one of his contemporaries. He advises one, “Look on other lives besides your own. See what their troubles are, and how they are borne. Try to care about something in this vast world besides the gratification of small selfish desires. Try to care for what is best in thought and action—something that is good apart from the accidents of your own lot.” Later, he again advises, “That is the bitterest of all—to wear the yoke of our own wrongdoing. But if you submitted to that, as men submit to maiming or a lifelong incurable disease?—and made the unalterable wrong a reason for more effort towards a good that may do something to counterbalance the evil? One who has committed irremediable errors may be scourged by that consciousness into a higher course than is common.”

The plot of this novel allows Eliot wide breath for philosophical and psychological digressions on the nature of humanity, “In the wonderful mixtures of our nature there is a feeling distinct from that exclusive passionate love of which some men and women (by no means all) are capable, which yet is not the same with friendship, nor with a merely benevolent regard, whether admiring or compassionate: a man, say—for it is a man who is here concerned—hardly represents to himself this shade of feeling towards a woman more nearly than in the words, ‘I should have loved her, if —:’ the ‘if’ covering some prior growth in the inclinations, or else some circumstances which have made an inward prohibitory law as a stay against the emotions ready to quiver out of balance.” Later, Deronda, himself, concludes, “We must find our duties in what comes to us, not in what we imagine might have been.”

“Hayek: A Life 1899-1950” by Bruce Caldwell and Hansjoerg Klausinger

This massive tome only takes us through half of Hayek’s life—through his time growing up in Austria, fighting in Italy during WWI, working for Mises in Vienna, moving to the LSE in London, his WWII years temporarily ensconced at Cambridge, and to his move to America at the University of Chicago. The book tightly balances an intellectual biography with the facts of his life—going into great detail of his friendships, his rivalries with colleagues, and his divorce to his first wife. The biography tries to weave how these personal events helped shape his work, his personality, his politics, and his ideology—and vice-versa. Quite early in his professional life, Hayek happily admitted, “In the sense of that Gladstonian liberalism, I am much more English than the English.”

One area of economics that first drew Hayek’s attention was the role of money in the modern economy. “His next step was to identify money as the root cause of cyclical movements, because money is able to disrupt the “tendency to equilibrium” prevalent in the static theory of a barter economy and lead to movements away from equilibrium. As he would later put it, money constitutes a “loose joint in the self-equilibrating apparatus of the price mechanism”…. Hayek drew on Wicksell by identifying the market for saving (or loanable funds) as the main channel where money may enter and disturb the economic system…. The equilibrium or natural rate of interest will be determined by the balance of the supply of (voluntary) saving and the demand for funds for investment purposes. If there are monetary disturbances, however, the prevailing money rate of interest may diverge from the rate in (intertemporal) equilibrium, e.g., when injections of money increase funds, or when money hoarding diverts the supply of funds…. This structure [of newly injected money], created by a depressed money rate of interest, cannot be sustained. Monetary expansion, then, will not produce an everlasting boom, and when the expansion eventually stops, crisis and depression follow. With regard to the sources of monetary expansion, while others like Mises put the blame on the misguided (“inflationist” or “cheap money”) attitude of the monetary authorities, Hayek pointed to the endogenous process of money creation by the banks, in particular in a system of fractional reserve banking.”

Another field that Hayek specialized in was the heterogenous structure of capital goods in an intertemporal system. “It appears that Hayek began his “capital project” almost immediately after arriving at LSE in 1931…. Hayek thought that the analysis in Prices and Production [his previous work] was deficient…. He quickly recognized that the one that he had used in his own book, a stages model that described the structure of production by means of an average period of production, was insufficient to the task…. The capital-theoretic foundations of Prices and Production were restricted to a special case well suited to an economy with variable capital (goods in process), but not to one with fixed capital, that is, durable capital goods generating a continuous flow of output over time. A more sophisticated capital theory would therefore need to allow for a truly general time structure of inputs and outputs…. This dynamic theory of capital would allow capital theory and monetary theory finally to be integrated and together be used to explain the nature and causes of the cyclical fluctuations that afflict market economies…. His [theory] would allow economists to “free themselves of the idea that capital is some homogenous mass, some given quantity of value, which will preserve its magnitude independently of the value of the real commodities of which it consists”…. He criticized the idea (which he attributed to Pigou, but a similar position can be found in Knight) that “there is a quantitatively determined fund of capital, which can be distributed and redistributed in any way between the different lines of production without changing its aggregate value”…. In his view, the capital stock is always composed of a collection of concrete capital goods, so that any adjustment would necessitate a change in the structure of capital, and the process of transition would thus depend on the capital structure inherited from the past…. The “maintenance of capital” must be accompanied by structural adaptations, in the course of which some capital goods would lose and others gain in value…. The capital structure is constantly evolving as the market continually provides new information. In that evolution, capital is rarely either so malleable as to be instantaneously transformable, or so permanent as to be incapable of being applied in a different production process.”

Hayek’s bete-noire was scientism, which he would address in his book Individualism and Economic Order. “The subtitle of the book, as well as the title of part 1, reveal the main theme: that the abuse and decline of reason was caused by hubris, by man’s overweening pride in the power of his own reason. This had been bolstered by the rapid advance and many successes of the natural sciences, which led to “scientism,” the idea that to make the social sciences truly scientific, all that was necessary was to apply within them the already proven methods of the natural sciences. Those infected by the scientistic prejudices believed that were the recipe followed, the scientific reengineering of society along more rational and just lines could begin…. Hayek saw scientism as arising from the intermingling of positivist and socialist ideas that themselves had their origins in eighteenth- and early nineteenth-century France.”

Hayek was self-aware enough to know that his economic methodology was going out of vogue. Nonetheless, he persisted against the Keynesian onslaught. “His decision to present the theory of production before consumer choice theory was “rather unusual.” In discussing his preferred approach, Hayek introduced the term “the economic calculus,” which might also be called “the pure logic of choice” (the phrase that he had used in his 1937 essay “Economics and Knowledge”) or “the theory of simple economy.” He explained that the economic calculus is used to analyze actions that follow from a single coherent plan. The plan may be that of an individual, a firm, a community, a nation, and so on…. [Hayek stated,] “In a way all the economic calculus is concerned with is the classification of goods according to their economically relevant characteristics; not concerned with their physical characteristics but with position in the means-end order…. In brief the purpose of this economic calculus is no more than to provide an exhaustive classification of the objects of economic activity according to their economically relevant attributes.””

Hayek contrasted this with the “multiple economy” in which the plans of many individuals interact. He explained, “As these plans are separate and not necessarily known to the other individuals, as soon as the people begin to act upon them, a new and different problem arises…. Every such experience he [the individual actor] will have, if it is not precisely what he has expected, is a new datum to him…. With his learning about new facts which may possibly lead him to alter his plan, we meet for the first time a true cause bringing about change.” Hayek later summed up, “It is important that from the beginning we look at competition not as a state of affairs in which everybody knows everything but as a process by which knowledge is dispersed and acquired.”

Hayek’s most famous book is probably The Road to Serfdom. It is dedicated to “the socialists of all parties.” This was not hyperbole. Hayek feared that the dangers of socialism could spring from both the political Right and Left. “He acknowledged that it was “a political book”…. He recognized that many well-intentioned people support socialism simply because they admire its aims—“social justice, greater equality, and security”—and do not realize that, in its standard definition, it means “the abolition of private enterprise, of private ownership of the means of production, and the creation of a system of ‘planned economy’ in which the entrepreneur working for profit is replaced by a central planning body.”” Hayek defended the market process with its divisions of labor. “That the division of labor has reached the extent which makes modern civilization possible we owe to the fact that it did not have to be consciously created but that man tumbled on a method by which the division of labor could be extended far beyond the limits within which it could have been planned. Any further growth of its complexity, therefore, far from making central direction more necessary, makes it more important than ever that we should use a technique which does not depend on conscious control.”

Hayek viewed himself as a social scientist who specialized in economics, but delved into history, philosophy, and psychology with gusto. “In Hayek’s view, the social sciences are properly conceived of as being theoretical, individualist, and subjectivist: they provide a theoretical account of how the actions of individuals, which are based on subjectivist perceptions and beliefs, lead to the creation of larger social structures that are unintended, that is, that are the results of human action but not of human design.” On economics, in general, Hayek pronounced, “It is probably no exaggeration to say that economics developed mainly as the outcome of the investigation and refutation of successive Utopian proposals—if by ‘Utopian’ we mean proposals for the improvement of undesirable effects of the existing system, based upon a complete disregard of those forces which actually enabled it to work.”

“Charmides” by Plato (translated by Rosamond Kent Sprague)

This dialogue is a long digression on the definition of temperance and on its possible worth. The editor, John M. Cooper, interjects, “The subject of discussion is the virtue of ‘sophrosune’, here translated ‘temperance’—but there is no adequate translation in modern European languages. Sophrosune means a well-developed consciousness of oneself and one’s legitimate duties in relation to others (where it will involve self-restraint and showing due respect) and in relation to one’s own ambitions, social standing, and the relevant expectations as regards to one’s own behavior. It is an aristocrat’s virtue par excellence, involving a sense of dignity and self-command.” The dialogue ends without being adequately resolved, but the reader goes on quite the journey, as Socrates guides through many twists and turns of thought along the way.

First, Socrates tries to confirm with Critias a working definition of temperance, “Then only the temperate man will know himself and will be able to examine what he knows and does not know, and in the same way he will be able to inspect other people to see when a man does in fact know what he knows and thinks he knows, and when again he does not know what he thinks he knows, and no one else will be able to do this. And being temperate and temperance and knowing oneself amount to this, to knowing what one knows and does not know.” Socrates continues, “Let us now grant this point, that the existence of a science of science is possible…. If this is perfectly possible, is it any more possible to know what one knows and does not know? We did say, I think, that knowing oneself and being temperate consisted in this?” Socrates is still perplexed, “I still don’t understand how knowing what one knows and does not know is the same thing as knowledge of self…. If temperance is only the science of science and absence of science, it will not be able to distinguish the doctor who knows the particulars of his art from the one who does not know them but pretends or supposes he does, nor will it recognize any other genuine practitioner whatsoever, except the man in its own field, the way other craftsmen do.”

Socrates is still not satisfied with their concept of temperance, “If, as we assumed in the beginning the temperate man knew what he knew and what he did not know (and that he knows the former but not the latter) and were able to investigate another man who was in the same situation, then it would be of the greatest benefit to us to be temperate. Because those of us who had temperance would live lives free from error and so would all those who were under our rule…. If temperance really ruled over us and were as we now define it, surely everything would be done according to science…. But whether acting scientifically would make us fare well and be happy, this we have yet to learn.”

Finally, Socrates admonishes Critias for leading him astray, after all, “All this time you’ve been leading me right round in a circle and concealing from me that it was not living scientifically that was making us fare well and be happy, even if we possessed all the sciences put together, but that we have to have this one science of good and evil…. Then this science, at any rate, is not temperance, as it seems, but that one of which the function is to benefit us. For it is not a science of science and absence of science but of good and evil. So that, if this latter one is beneficial, temperance would be something else for us.” Socrates concludes, “We conceded that there was a science of science when the argument did not allow us to make this statement. Again, we conceded that this science knew the tasks of the other sciences, when the argument did not allow us to say this either, so that our temperate man should turn out to be knowing, both that he knows things he knows and does not know things he does not know. And we made this concession in the most prodigal manner, quite overlooking the impossibility that a person should in some fashion know what he does not know at all—because our agreement amounts to saying he knows things he does not know…. It has very insolently exposed as useless the definition of temperance which we agreed upon and invented earlier.”