Aristotelian Self-Sufficiency through the Middle Ages
[Excerpted from chapter 3 of Studies in Economic Nationalism.]
Self-sufficiency — which is the prime objective of economic nationalism — enjoyed in theory and in practice considerable favor in ancient Greece. Aristotle regarded "political and economic self-sufficiency as a basic prerequisite of the ideal state." Thus, in Book I of his Politics, we read:
When several villages are united in a single complete community, large enough to be nearly or quite self-sufficing, the state comes into existence, originating in the bare needs of life, and continuing in existence for the sake of a good life. And therefore, if the earlier forms of society are natural, so is the state, for it is the end of them, and the nature of a thing is its end. For what each thing is when fully developed, we call its nature, whether we are speaking of a man, a horse, or a family. Besides, the final cause and end of a thing is the best, and to be self-sufficing is the end and the best.
This concern with self-sufficiency runs all through Aristotle's work. Having reached the conclusion that the ideal size of the State is for it to be large enough to be self-sufficient but otherwise as small as possible ("the best limit of the population of a state is the largest number which suffices for the purpose of life, and can be taken in at a single view"), he continues:
Much the same principle will apply to the territory of the state: every one would agree in praising the state which is most entirely self-sufficing; and that must be the territory which is all-producing, for to have all things and to want nothing is sufficiency. In size and extent it should be such as may enable the inhabitants to live at once temperately and liberally in the enjoyment of leisure.
Self-sufficiency, then, for Aristotle, represents a complete lack of dependency on the outside world, combined with the ability to live a "good life" within the confines of the state. Over 21 centuries later this notion was to be taken up, albeit with a very different philosophy behind it, by the German philosopher Johann Gottlieb Fichte. Fichte, it should be noted, coupled self-sufficiency with territorial expansion, whereas Aristotle linked it with his recommendation that the size of the community should be the smallest practically possible. (This is why Fichte, rather than Aristotle, was to inspire, in our own times, Hitler's "geopoliticians.")
In turning from political theory to the political and economic practices of ancient Greece, I can do no better than to quote a highly illuminating passage from Sir Alfred Zimmern's authoritative and brilliant work, The Greek Commonwealth:
It was a tradition and a boast of Greek cities to be sovereign States wholly independent of foreign claims. Their fierce love of independence had been nourished by centuries of isolation, and was, as we have seen, one of the strongest forces in the national life. But we shall be merely following the bad example of so many nineteenth century traders and pioneers if we interpret this sentiment in a strictly political sense. It was in origin and essence, in Greece as elsewhere, every whit as much economic as political: for politics and economics, State government and State housekeeping, are to simple people (as they should be to us) merely two aspects of the same thing. So it provided what was for centuries the bedrock of Greek economic policy. If a State was to be independent it must not only govern itself in its own way, but also feed and clothe itself in its own way. It must not only manage its own affairs but supply its own needs. Home Rule and Self-sufficiency are, in the traditional Greek view, almost convertible terms. How strong was the tradition may be seen by the way it lingered on, years after Greek traders had begun pouring in goods from east and west, in the political economy of the philosophers.
The self-sufficiency idea spread through the Hellenistic world of the Near and Middle East during the 3rd and 2nd centuries BC. The Hellenistic monarchies in Egypt and Asia Minor, the results of Alexander's conquests and of the disintegration of his short-lived empire, represented a superimposition of Greek political ideas upon a number of very ancient states, each with an old and varied history. One of the Greek influences lay in envisaging self-sufficiency as the basis of political strength. In fact, the evolution was from "self-sufficiency" to state-controlled trade, and, finally, to commercial hegemony. The impact of these ideas upon the history of the Hellenistic monarchies is a fascinating story, told with a great deal of illuminating detail by Professor Michael Rostovtzeff in his Social and Economic History of the Hellenistic World, to which the present writer is indebted for all that follows on this subject. To obtain the greatest possible measure of economic self-sufficiency Hellenistic monarchies
strove to develop to the utmost the resources of their kingdoms mobilizing and organizing all the creative forces of their people and adding thereto new forces, those of Greek or Hellenized immigrants. For the produce of their countries they sought to secure the largest possible market by establishing commercial connections as widely as they could, which meant opening their countries to the rest of the world and putting an end to their economic isolation. The easiest way of achieving this was to control important commercial routes by sea or land and so secure for themselves some measure of economic hegemony as a complement of political hegemony.
It is noteworthy that the principle of self-sufficiency as applied in practice by large states brought, as a corollary, policies aimed at the development of power, not only economic and political, but also military. Among the Hellenistic monarchies it was Egypt that went furthest in the direction of economic nationalism and — this being of particular interest to the modern student — of internal economic planning. As a result, it was the Egypt of the Ptolemies that adopted measures of monetary policy to which the name of "monetary nationalism" can well be applied and that Rostovtzeff describes as the pursuance by the Ptolemies of "their own monetary policy regardless of what happened in this respect in the rest of the world."
He also observes — and this, too, cannot fail to impress the modern student of international economic relations —that "it is very probable that a concomitant of this monopoly of currency was the exclusion of foreign capital from the Egyptian money market." Rostovtzeff further describes how the monetary nationalism of the Ptolemies divided the Hellenistic world into two monetary areas, Egypt and the rest of the said world, and how the isolation of Egypt, so damaging to that country's future prosperity, followed from its policies of monetary and economic nationalism.
Internally Egypt adopted, in that period, comprehensive measures of economic planning. The system that emerged bears some striking resemblance to modern totalitarianism. To quote Professor Rostovtzeff once more:
The Ptolemaic reform almost entirely ignored the essence of the Greek economic system: private property, recognized and protected by the State as the basis of society, and the free play of economic forces and economic initiative, with which the State very seldom interfered. These could not be suppressed altogether, for they were among the factors that helped the Ptolemies to achieve their second object, the improvement of technical devices and the development of the natural resources of the country, but they were limited and curtailed in order to bring them into harmony with the general Ptolemaic scheme of centralized State control. Restricted and curtailed as they were, these features never disappeared from the economic system of Egypt, and by the mere fact of their existence they created within it a kind of antinomy of which the Ptolemies were never able to get rid, but which, on the contrary, became more and more apparent as time went on.
This opposition between strict regimentation on the one hand, and economic progress on the other, has not been resolved by any country in the 2,000 years and more that have elapsed since the downfall of the Ptolemaic regime in Egypt. But in our own day more than one country is becoming involved in the same conflict of objectives that is diagnosed by Rostovtzeff in the above passage. Commenting on Rostovtzeff's findings from the vantage point of 1950, Professor Luigi Einaudi, the great Italian scholar — and the first economist ever to become president of his country — makes the following very pertinent and profound comments:
There is, in the Ptolemaic system of planned economy an essential characteristic, to which great importance should be attached. … In the Greek town, the fear of war, of piracy, of revolutions, of confiscations, of liturgies, of forced public services and reduction to slavery weighed like an incubus on the members of the middle class during the last three centuries B.C. … The system of controlled economy was peculiar to Egypt, or at least was applied there in its complete form; and there it supplemented the other factors of insecurity which were plentiful in the Hellenistic world. At first sight this statement sounds paradoxical. Regulation, programme, plan of cultivation, are they not beyond the scope of doubt, are they not the opposite of insecurity? … The insecurity derived from the system of planned economy, in Ptolemaic Egypt, was synonymous with arbitrary power.
And this, says Einaudi, "is the worst form of insecurity, worse than the fear of war, revolution and famine and piracy, because instead of the inscrutable will of the gods, it must be attributed to the evil will of Man."
Thus, from the theoretical speculations about self-sufficiency of the Greek philosophers to the exercise of power for the sake of self-sufficiency by Hellenistic rulers, and thence to the establishment of internal conditions of ruthless and arbitrary power, such was the development in the ancient world of the causal relationship between economic nationalism and individual insecurity. This development is not without profound significance for our own day.
The economic nationalism of the ancient world did not, of course, destroy international trade; what it did was to substitute state-controlled trade for private trade, with all the consequences such a substitution entails in terms of economic advantage and individual choice. Under certain circumstances economic nationalism, by enhancing autarky, reduces the absolute volume of international trade; but under other circumstances it merely interferes with its structure and influences its growth along lines that would not be considered sound on purely economic principles. (The case of Nazi Germany shows that totalitarian trade may even be expanding trade though there the expansion was due to political and military motives; but it obviously was not the kind of trade that would have been developed by the market economy acting freely and concerned with the welfare of the individual rather than with the power of the state.)
It would exceed the scope of this chapter — of necessarily limited length — to discuss the experience of the Roman Empire in terms of economic nationalism. Nor is it possible to do full justice to the long, intricate, and fascinating developments that took place during the thousand-year span of the Middle Ages. I can hardly do better than quote several passages from the Economic and Social History of Medieval Europe by Henri Pirenne, the great Belgian historian who was in his lifetime and remains today the leading authority on this subject:
Hampered as was all traffic by the multiplication of internal tolls, some compensation at least was to be found in the absence of all obstacles on the political frontiers. It was not until the fifteenth century that the first symptoms of protection began to reveal themselves. Before that, there is no evidence of the slightest desire to favour national trade by protecting it from foreign competition. In this respect, the internationalism which characterised medieval civilization right into the thirteenth century was manifested with particular clarity in the conduct of the states. …
[T]he princes of the Middle Ages were still without the slightest tinge of mercantilism, with the exception, perhaps, of Frederic II and his Angevin successors in the Kingdom of Naples. Here, indeed, under the influence of Byzantium and the Moslems in Sicily and Africa, we may detect at least the beginnings of State intervention in the economic system.
It is the rise of the towns that resulted, according to Pirenne, in the development of "urban protectionism." This took place in the course of the 14th century. "Henceforth," Pirenne notes, "the consumer was completely sacrificed to the producer." The following further comments are of great interest:
Urban particularism led the towns to hamper large-scale commerce in exactly the same way that they hampered large-scale industry. The decline of fairs in the course of the fourteenth century is not unconnected with the dislike of the artisans for an institution so incompatible with their violent protectionism….
But it was in vain that the towns pursued their policy of taxing and exploiting large-scale commerce; they could not escape it, nor indeed did they desire to do so, for the richer, the more active and the more populous a city was, the more was commerce indispensable to it. After all, it provided the townspeople with a great part of their food supply and the crafts with almost all their raw materials.
But history was not to stand still:
The same fourteenth century which saw urban particularism at its height, also saw the advent of the royal power in the sphere of economic history. Hitherto [royal power] … had left the economic activity of its subjects to themselves. Only the towns made laws and regulations for them. But their particularism caused them to be continually in opposition to each other … The princes alone were capable of conceiving a territorial economy, which would comprise and control the urban economies.
And so, at the end of the Middle Ages, "whenever it had the power, the State was moving in the direction of mercantilism." Our last quotation from this source shows how the final transition to mercantilism was made:
Obviously the word [mercantilism] can only be used within strict limitations, but, alien as the conception of a national economy still was to the governments of the late fourteenth and early fifteenth centuries, it is plain from their conduct that they desired to protect the industry and commerce of their subjects against foreign competition, and even, here and there, to introduce new forms of activity into their countries. … It was the beginning of a process which in the long run was destined to throw aside medieval internationalism, and to imbue the relations of states with each other with a particularism every whit as exclusive as that of the towns had been for centuries.
 Ibid., book 7, ch. 4.
 It must be noted, however, that the opposite point of view was also present in the Greek (and Athenian) tradition. Thus we read Pericles's famous "Funeral Oration," as reported in Thucydides's Peloponnesian War: "We throw open our city to the world, and never by alien acts exclude foreigners from any opportunity of learning or observing, although the eyes of an enemy may occasionally profit by our liberality; trusting less in system and policy than to the native spirit of our citizens" (Ch. 2, par. 39, in the Crawley translation). While there is no reference in the "Oration" to commercial policies, we have here a terse statement of the philosophy of an "open society," contrasting with Aristotle's concept of a "closed society" developed in the following century.
 Sir Alfred Zimmern, The Greek Commonwealth, 5th ed. (Oxford: 1931): pp. 286–287.
 M. Rostovtzeff, The Social and Economic History of the Hellenistic World (Oxford: 1953): vol. 1, p. 249.
 Ibid., vol. 2, pp. 1294 passim.
 Ibid., vol. 1, p. 273.
 Luigi Einaudi, Greatness and Decline of Planned Economy in the Hellenistic World (Berne: 1950): p. 47.
 The reader may be interested, however, in turning to Professor Rostovtzeff's The Social and Economic History of the Roman Empire (Oxford: 1957). See also the short but well-documented book by H.J. Haskell, The New Deal in Old Rome (New York: 1947); and Jules Toutain, The Economic Life of the Ancient World (London: 1951).
 Cf. Henri Pirenne, "La Civilisation occidentale au moyen age du Xle au milieu du XVe siecle," in Histoire du Moyen Age, ed. Henri Pirenne, Gustave Cohen, and Henri Focillon (Paris: 1933). Pirenne's chapters (pp. 7–189) were published in 1936 in an English translation entitled Economic and Social History of Medieval Europe. The passages quoted below are from the "Harvest Book" reprint, New York, n.d. See also Cambridge Economic History of Europe, vol. 2 (Cambridge: 1952).
 Henri Pirenne, Economic and Social History of Medieval Europe, trans. I.E. Clegg (Orlando: Harcourt, Inc., 1937): p. 91.
 Ibid., p. 206.
 Ibid., pp. 209–211.
 Ibid., pp. 216–217.
 Ibid., p. 217.