Political Economy: Notes while reading Wikipedia's Oikonomos article

Under the heading "In Ancient Greece":

The oikos (household) was the base unit for the organization of social, political, and economic life in the Ancient Greek world. The person in charge of all its affairs was the oikonomos.[2][3] The oikos was composed of a nuclear family as well as extended family members such as grandparents or unmarried female relatives.[3]

Their note [3] links to household, Greek at Oxford Research Encyclopedias, which reads in part:

The household (oikos) was the fundamental social, political and economic unit of ancient Greece, though its precise links into larger political and economic structures changed regionally and over time. 

Let me grab that sentence and emphasize that the way the oikos fits into "larger political and economic structures" differed regionally and changed over time. Regional differences are to be expected, I think, but the "changed over time" thing strikes me as important. It ties in to economic evolution both within human lifetimes and on the scale of civilization. 

The OxfordRE article continues:

At one level it [the oikos] was a co-resident group, many (though not all) of whose members were kin or affines (related by marriage)... Though a nuclear family (parents and children) might form the household's core, there is considerable evidence for the regular appearance of stem families (nuclear family plus a grandparent) and various kinds of extended families, especially incorporating unmarried female relatives (aunts, sisters, nieces, cousins, etc. ). The senior man in the household usually took charge of ‘official’ relations with the outside world and acted as the head of household (kyrios).

So the ancient Greeks had a word for "head of household" and a different word for "household manager". But really, the household manager was "head of business operations". What had me confused for many years (until I was out with the dogs the other day) was that the old Greek "oikonomos" is always translated as "household manager". No connection to business activity is ever indicated. I finally made the connection myself when I realized that in that time and place, the home base of most business activity must have been the home. The point is, the word that means "household manager" was used to identify a key job title in "the primary unit of economic organization", the oikos, the home-based business. And now I think I finally figured it out.

Back to the Wikipedia article:

In addition to family members by kinship or marriage, slaves or metics [foreigners] might have lived and worked within the household. Wealthy households would have had many slaves and metics working for them.[3] The oikonomos of the household would have played a role in directing the labor of the slaves and metics...

A small oikos would have had only a few household slaves known as oiketai.[8] Of the oiketai, the men might have had the responsibility to work in the field. In a larger oikos, many slaves would be entirely dedicated to agricultural work. This is generally considered to be less favorable than work in the house itself.

The "oikos" was the household, but it was really more like a small business; ancient Greece was like a society of small businesses; and where we have "employees" working for "employers", ancient Greece had slaves working for the household manager. And this, for  me, turns today's "wage slave" notion into something a bit closer to a valid economic concept. 

Wikipedia:

The oikos was the primary unit of economic organization within the ancient Greek world... An oikos was expected to be self-sufficient in what it produced for itself.[9] Thinkers such as Aristotle considered the self-sufficient oikos to be the fundamental, indivisible constituent of the polis. In order to be a true oikos, it had to be entirely self-sustaining it what it produced and consumed...

So Aristotle saw successful small business as the fundamental element of the Greek society of his time.  Carrying that thought to its logical conclusion, for him the economy was of the greatest importance.

For me, also.

Note [9] links to economy, Greek at Oxford Research Encyclopedias. It reads in part:

Greece itself was not a single entity, but a congeries of more than a thousand separate communities. One should therefore speak of Greek economies rather than the Greek economy... Our ‘economy’ is derived from the ancient Greek word oikonomia, but this meant originally and usually the management of a private household (oikos) rather than that of a ‘national’ economy (see household, greek).

See? This is a perfect example of defining "oikonomia" as the management of a private household while giving no indication that the private household was typically the location of some small business, and no indication that the head-of-household was the entrepreneur-in-charge.

But they do note the distinction between private household economy and national economy. This is the distinction I was trying to emphasize in the previous post, regarding individual households versus "society as a whole". The distinction is an important one, because the economics of the private household slash small business, in our day, is microeconomics; and the economics of the national economy is macro.

I picture society in ancient Greece as similar to feudal Europe: a society of self-sufficient manors, but smaller and more numerous than manors, consisting of households and estates. Economic thought in both feudal society and ancient Greece focused on the small unit, the manor or the oikos, the "primary unit of economic organization". That economic thought would have been a version of microeconomics. 

Macroeconomic thinking first arose, it would seem, in 1615 with Antoine de Montchrestien and his notion of political economy:

Montchrestien demonstrates that this knowledge of human nature can be used to promote the wealth of the people and the power of the monarch...
The science of commerce in general is thus essentially different from political economy, which aims to be a source of inspiration for “good government”.

- Jérôme Maucourant in The ambiguous birth of political economy: Montchrestien vs. Cantillon

Where Maucourant says "good government" I would say "good policy".

The conclusion reached in my previous was this: The word "household" is always used when the meaning of oikonomos is given. But the guy with that job title managed the household business. I picture this as the decisions of one individual directing the business activity of one firm: in other words, again, it is a version of microeconomics. Political economy, on the other hand, is macroeconomics, and it becomes relevant only when the economic unit is not the personal property of its leader.

Today I reach the same conclusion, based on old Greek words rather than on thoughts that pop into my head while I'm out with the dogs.

A “household economy” for the "polis"

The economy has been my hobby and my passion since 1977. But I still don't know what "political economy" means. Now it has come up, though, and I have to figure it out.

From Investopedia:

Political economy is an interdisciplinary branch of the social sciences that focuses on the interrelationships among individuals, governments, and public policy.
...
Political economy is a branch of social science that studies the relationship that forms between a nation's population and its government when public policy is enacted. It is, therefore, the result of the interaction between politics and the economy and is the basis of the social science discipline.
...
Political economy may draw upon sociology, economics, and political science to define how government, an economic system, and politics influence each other.

So, assuming we trust Investopedia on this, that's what political economy is today: It describes how the economy influences (and is influenced by) politics and government. Okay, I guess, but Investopedia doesn't make it real for me. There are no specifics. You wouldn't even know that money might be involved.

But they do link to "Antoine de Montchrétien and the birth of Political Economy" at Storep. This Montchrétien guy wrote a book back in 1615 that "analyzed how economics and politics are interrelated," Investopedia says. Apparently that was the beginning of "political economy". But I can't find the book online in English, so I don't know what I think that guy said.

This isn't helping me understand the meaning of the term "political economy". I have to try a different approach.

 

Based on this bit from the Investopedia article,

the term is probably best ascribed to the French writer and economist, Antoine de Montchrestien. He wrote a book called "Traité de l'économie politique" in 1615, in which he examined the need for production and wealth to be distributed on an entirely larger scale—not in the household as Aristotle suggested.

and this from Britannica,

The term political economy is derived from the Greek polis, meaning “city” or “state,” and oikonomos, meaning “one who manages a household or estate.”  Political economy thus can be understood as the study of how a country—the public’s household—is managed or governed...

I get the impression that in Montchrestien's time, his version of the word "economy" still referred to the household economy, so he used the term political economy to describe the "entirely larger scale" economy he had in mind.

If "economy" did still mean in 1615 the same as it meant in ancient Greece, something like household budgeting -- and it might have, as even today we try to "economize" when we spend money -- then this Montchrestien was apparently the one who developed the idea of the economy as applying not simply to the household but also to society as a whole, which is how we think of the economy today. How I think of it, anyway.

Now I can picture what the term "political economy" would have meant when it was invented in the 17th century. It meant, then, the same that "economics" means today. I didn't get that impression from the Investopedia article.

I've known of this ancient Greek word "oikonomos" for a long time. It has to do with household management. But I was thinking about it while I was out with the dogs: The word "household" is always used when the meaning of oikonomos is given. But I doubt it was only used, in ancient Greece and Rome, in reference to places where people lived. As in the Britannica excerpt, it referred to "a household or estate".

In ancient times, at least as I picture ancient times, there was not a lot of factory work. Most people may have lived where they worked, at home or on the estate, but either way, "oikonomos" must have mostly meant planning and tracking business revenue and expenses. Sure, a guy that only worked on the estate could do "oikonomos" for his personal budgeting, at home, after work. That might have been part of it. Sure.

If this is correct, then "oikonomos" included budgeting andor accounting, as needed, for consumers and businesses both. If the government also had the oikonomos -- and they must have, I would think -- then in all sectors of the economy there was oikonomos.

Now it makes sense to me. But let me make a distinction between the oikonomos of government and the "political economy" of government. I read the other day that the income of the Roman Empire was the personal income of the emperor. The empire was his magnificent estate. His accounting was oikonomos.

Political economy is horse of a different color, one that becomes relevant when the nation is not the personal property of its leader.