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Source link: http://archive.mises.org/6315/how-society-works-platos-contribution/

How Society Works: Plato’s Contribution

February 28, 2007 by

Plato’s Republic purports to deal with the nature and conditions of a just republic, as well as with the perversions of justice in man and society. However, its discussion of these normative topics is squarely built upon a positive theory of the origin and nature of society. And at the heart of this theory, as we shall see, is a sophisticated account of the division of labor. The theory of the division of labor is one of the cornerstones of economics. It is the very foundation of the scientific analysis of society and the market. FULL ARTICLE


Alex M Thomas February 28, 2007 at 9:50 am

“Opulence was therefore not just the cause of the decadence of individuals and society; it was the driving force of war.”

True. Indeed, Plato needs to be lauded for his insight. Though his concept of ‘acquiring land’ for more growth by ‘employing guardians’ created wars.

A very insightful article. It is interesting to note that such thoughts took place 2400 years before.

Adam Knott February 28, 2007 at 11:14 am

Dr. Hulsmann.

One small point of disagreement.

The division of labor may be seen as perhaps the fundamental social phenomenon to be explained, or at least one of them.

But it is not the starting point of Mises’s social philosophy. The starting point of his social philosophy which explains the various social phenomena is given as:

“The starting point of our reasoning is not behavior, but action,…” (Epistemological Problems of Economics, p.23)

“The starting point of praxeology is a self-evident truth, the congnition of action, that is the cognition of the fact that there is such a thing as consciously aiming at ends.” (The Ultimate Foundation of Economic Science, p.5)

“The starting point of praxeology is……reflection about the essence of action.” (Human Action, p.39)

The starting point of Mises’s social philosophy is the recognition of action (aiming at ends), and logical reasoning from that point, to eventually explain social phenomena such as the division of labor.

Strictly speaking, in the Misean system, economic laws come into play via the category of action. Those laws explain the complex phenomena of social reality, one of which would be the division of labor.

Very much looking forward to your upcoming biography of Mises.

Nick Bradley February 28, 2007 at 1:06 pm

Most libertarians implicitly assume that the greater the amount of specialization and division of labor, “the better”. However, is this necessarily the case? Is there not steps that the state can take to increase specialization for its own purposes? Isn’t overspecialization a possibility?

In my view, the state can and does encourage selective specialization, resulting in a lower overall level of efficiency. Here is an example:

Suppose that Widget subcomponent A, Widget subcomponent B, and Widget subcomponent C were produced and assembled in the same location. The same workers were producing different goods, and devoted their time to being proficcient on producing the entire range of goods.

The government then decides to implement “internal improvement” projects to boost trade; a massive interstate highway system is built as a result. due to the new, “free” highway, Widgets, Inc. decides that it can be more profitable to produce Widget subcomponent A in the North, Widget subcomponent B in the South, Widget subcomponent C in the East, and assemble the widgets in the West near the port. As a result of the new highway, Widgets, Inc. has crews of “specialists” at each location who are extremely proficient at making their component; a team of specialists also assembles the device, and the firm is more profitable than ever. However, the workers at each location has no idea what the other division does, and innovation is limited to Senior management.

Although the firm is far more profitable and the division of labor is increased, society is poorer. If we adjusted the firm’s profits for the costs of the roads and internal calculation problems, it was cheaper to do it all at the same location by the same people.

The Libertarian Left realized this long ago. Here are a couple of quotes from Mutualist Kevin Carson on this Blog a while back:

“The benefits of division of labor and roundaboutness, BTW, cannot be infinitely extrapolated. They have a levelling-off point that is affected by other factors. Beyond a certain point, depending on the size of the market area among other things, overspecialization of labor and capital goods can result in less efficiency than more general-purpose production technologies.”

“The division of labor is not an absolute good, on the pattern of “if some pepper is good, then more must be better.” The extent to which it is a good depends on the point at which the costs begin to exceed the benefits–and in a free market, the degree of division would be based on the assessment of private actors. When government promotes division of labor beyond pareto-optimal levels (like, say, the US military’s promotion of deskilling digital control technologies in the machine tools industry), the result is a net loss of efficiency.”

As Mr. Carson has stated, in a free market the division of labor would not exceed the pareto-optimum level. The same goes for economies of scale: on a free market, firms would reach an optimum size and not grow much larger, as diseconomies of scale (i.e. calculation problems) would begin to outweigh economies of scale.

Philosopher Scott February 28, 2007 at 3:15 pm

I never much like Plato’s idea for society, government, and such. Plutocracy is just a bad idea. Who likes it? I’ll check it out on the Philosophy Forums.

Geoffrey Allan Plauche February 28, 2007 at 6:30 pm

Adam Ferguson worried about excessive division of labor in politics and defense…. an insight that can be used to attack representative government and the state.

ray lopez March 1, 2007 at 6:22 am

Here in Greece we strongly agree with your article on Plato as the precursor of the division of labour theory! :-)

Francisco Torres March 1, 2007 at 12:20 pm


If the roads were built by private investors, would the resultant specialization also create less efficiency? I do not think it matters one way or the other (government roads vs private sector roads), since the decision to place a factory is a matter of choice from the part of the factory owners and not of one of automatic impulse. The problem of government intervention goes much more broadly than the seeming overspecialization it generates.

Also, Mr. Carlson’s contention begs the question, since he calls upon the forces of “efficiency” to argue against the supposed over-specialization, without being much concerned, seemingly, about explaining what does the he mean by being more “efficient”. The division of labor concept stems from the Law of Comparative Advantage, which means that specialization is inevitable when people face more productive choices – for example, I do not make my own shirts, but rather use my time on more productive undertakings. Would that make me less “efficient”? I do not know, but I DO know I am MORE productive on those undertakings than what I can accomplish making my own shirts.

Nick Bradley March 1, 2007 at 7:21 pm

Francisco Torres,

“If the roads were built by private investors, would the resultant specialization also create less efficiency?”

– Obviously, it depends on whether the investors made a good decision or not. But, the costs of the roads would be internalized.

Mr. Carson is obviously referring to how close the firms would be to Pareto efficiency. A fully Pareto-efficient economy, no individual can be made better off without another being made worse off. Given a set of alternative allocations and a set of individuals, a movement from one allocation to another that can make at least one individual better off, without making any other individual worse off, is called a Pareto improvement or Pareto optimization. An allocation of resources is Pareto efficient or Pareto optimal when no further Pareto improvements can be made.

A strongly Pareto optimal (SPO) allocation (X) is one for which there cannot be any other feasible allocation (say X’) such that the allocation (X’) is strictly preferred by at least one person, and weakly preferred (not opposed) by everyone else. A (weakly) Pareto optimal (WPO) allocation is one where there is no feasible reallocation that would be strictly preferred by all agents.

CAITM March 1, 2007 at 7:24 pm

The greatest potential harm comming from over-specialization in the DOL, in my opinion, is the application of violence. For obbious reasons, the State, from time to time, has a vested interest in selectively and artificially separating the trained warriors from the farmers/artisans. Thus there are persons like Nick and myself. Plato’s Republic, my wife’s Western Civ prof and indeed most people take it for granted that violence; legitimate(in denfense) or otherwise is best practiced by trained fighters. History, I would argue doesn’t bear this out. The ultimate expression of this was Napoleon’s conscripts crushing the sharply-drilled Prussian Professionals with the same technology on the fields outside Jena in 1806 (But my examples of regular troops tounced by “rabbles” doesn’t stop there)

Nick Bradley March 2, 2007 at 8:00 am


The proper model for defense, I believe, is a small cadre of full-time experienced fighters combined with the activation of militiamen in the event of an attack. In peacetime, the active-duty carde would spend most of their time training militiamen once a month, year, or so.

This was the historical model of the Britons as well, and it can still be seen by looking at the names of the different British military services:

Royal Navy

Royal Air Force

Royal Marines

British Army

Excluding the RAF, which has only been in existence in the 20th Century, the charters of each service prescribe separate roles.

The Royal Navy and the Royal Marines act in direct support of the executive, primarily to ensure mercantilist shipping interests in the past. The British Army, on the other hand, belongs to the people and used to only be activated in wartime.

The US had a similar setup prior to 1947 with a separate Department of the Navy and a Department of War. This allowed the US military to exercise peacetime roles (protection of shipping interests, etc.) while keeping the bulk of US war-fighting capability inactive.

Some fourth-generation warfare analysts, such as USMC Col. Thomas X. Hammes, have advocated a return to a split chain of command.

CAITM March 3, 2007 at 3:10 pm


Good point. I’d have to say I’d also prefer the historical British Model. J.R. Hummel’s account of how the Militia in the U.S. gradually became the Army National Guard as we know it today is also useful.

Spliting the Chain of Command back up may prevent the red tape barriers to real upgrades in gear and weapons (like retrofitting ALL M16/M4s with an HK 416 Upper) but I digress

Nick Bradley March 4, 2007 at 1:25 am


Yes, it may throw up a bit more red tape, but it prevents the full brute force of the US military being exercised without a declaration of War. Only Department of the Navy (or a 21st Century equivalent) assets can conduct operations without war being declared on an enemy.

It is no coincidence that the trend of going to war without declaring war started immediately after the establishment of a unified chain of command.

W.LindsayWheeler March 4, 2007 at 3:58 pm

The “Division of Labor” was a component of the Spartan Republic. Another word for it is called “Righteousness”. That is what Plato’s Republic is all about, a discussion of righteousness. Plato was a Philodorian and he and Socrates were admirers, disciples of Spartan Culture as was all the wise men.

All of nature is construed on the basis of the “division of labor”. The Spartans incorporated this principle in their Classical Republic. It was a central tenet in their Philosophy of mixed government.

And no you can’t mix the banavsos with a Republic.

W.LindsayWheeler March 4, 2007 at 4:00 pm

The links didn’t from preview to post

Classical definition of Republic

Philosophy of mixed government

W.LindsayWheeler March 4, 2007 at 4:05 pm

Beg your pardon but let me try this again.

[url=http://www.wikinfo.org/wiki.php?title=Classical_definition_of_republic]The Classical definition of republic[/url]
[url=http://www.wikinfo.org/wiki.php?title=Philosophy_of_mixed_government]Philosophy of mixed government[/url]

see if this works.

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