November 20, 2008

To Bail or Bail Out, That is the Question

To Bail or Bail Out, That is the Question

by Thomas Fleming

"What do you think about the bailout?"

The old philosopher sighed. Xanthippe had been getting market gossip again from the slave girl she sent to the agora. How many times did he have to tell her to pay no attention to these rumors? News, he snorted to himself. Those people were right in Thurii who made it a crime to ask arriving strangers, "What’s new?"

"What bailout, dear?"

"You know perfectly well what bailout I’m talking about, the bailout of those chariot and wagon makers. They just can’t compete with the Ionian stuff, and I hear they feed the slaves like kings. Some of them are getting pretty uppity–they live better than we do and you are not only an important professor but you have your own phrontisterion (think tank) …So, what do you think?"


"What do you mean nothing? You have an opinion about everything. That’s why the Delphic oracle said you were the wisest man in the world."

"I only know that I don’t know what I don’t know, and I don’t know anything about making wagons."

"Well, what am I supposed to say when those snooty friends of your come over here, talking so glib about what they would do if they had the power. All I say is that if Critias or Alcibiades ever get into office, we’ll all have to watch it. Anyway, everyone is talking about it. You’d think a philosopher would at least show some interest in an important public crisis."

"Well, Xanthippe, what do you think?"

"This is a change! What do I think. Well, what I think is that while those cartmakers and their slaves have mismanaged things pretty badly, Athens simply cannot afford to put so many people out of work. Think of the multiplier effect…"

"Multiplier effect?"

"Yes, the fact that all those unemployed slaves and employee won’t be able to buy wine or oil, which will hurt the grape and olive farmers. Besides, we can’t stand idly by and let economic ruin overtake our neighbors."

"They’re not our neighbors. They live in the Piraeus. You’ve never been to the Piraeus–and you wouldn’t want to: It’s full of foreigners–Phoenicians and Africans–and very dangerous. You know what those Phoenicians are like. You want to bail them out? When they’re not murdering children, cheating you in business or stealing your ideas, they’re finding an excuse to oppress their neighbors. What’s even worse, they expect Athens to defend them against the Persians. Artaxerxes can do what he likes with them, for all I care."

"We’re not talking about Phoenicians and you know very well what I mean: We’re all Athenians–ever since Cleisthenes set us free from all those old phratries and clan wars."

"OK, Xanthippe. We can talk about this, but before we get down to the specifics of the deal, perhaps we should take up the basic issue. You are talking as if we have an obligation to save the jobs of those poor cartmakers in Piraeus. What you say this is something desired in itself or that which is only desired for something else."

"Good grief, Socrates, I shall go mad if you start up with your thises and thats for which."

"Well, if you won’t listen to plain Greek. Let me give it to you in something that sounds like the sloppy language of those northern barbarians. Are we supposed to help the cartmakers because that is a good thing to do or because it serves another, higher purpose?"

"I’ve known you long enough to spot the trap. If I say it is good in itself to help the people in Piraeus, you will ask why restrict it to them, and before long you’ll have us sending wine to the gymnosophists in India. OK, granted: There is no general duty we owe to everyone to assist strangers. Fine. But these are Athenians-even the slaves, in a way."

"Xanthippe, you shock me! Slaves Athenians? Next you’ll be talking about setting them free and making them citizens. Even Cleon doesn’t go that far! Just what we need in Athens, more stupid people voting for the crooks who rob the people and drag us into wars! To get back to my question–far ahead of which you have raced–"

"Ye Gods, not that convoluted Greek again."

"–Are you more concerned with the good of the cartmakers or with the good of Athens? This magic multiplier effect you seem to believe in."

"Naturally, I care about the cartmakers, but primarily I am thinking about the welfare of our city. Where will we get the chariots for the next Panathenaic procession? How will the farmers get their vegetables to town? How will our soldiers haul their equipment–imagine if the cartmakers went to Sparta!"

"The Spartans don’t even use money. How would they buy wagons? So you are saying that the common good requires us to bail out failed business enterprises. What’s next? You know Pasion** the slave who worked as a money-lender and got so rich he took over the business and became a shield manufacturer? Here was an ex-slave and foreigner who gave the city 1000 shields and fitted out a trireme (warship). Anyway, let us suppose his company is failing. Does he get bailed out or is this only reserved for cartmakers. And if Pasion gets helped, what about the olive oil pressers in a bad year or the potters? "

"But this is a special case, and you know the whole economy of the Piraeus could be wrecked."

"You are not answering my question. All right, then, supposing we have this obligation, in what capacity do we have it?"

"What do you mean, capacity?"

"Who is the ‘we’ that owes the cartmakers. Is it we Socrates and Xanthippe, we as two of thousands of private individuals who live in Athens, or we Athenian citizens whose magistrates collect taxes and carry on the city’s business? Not to rus you, but if it is we as Socrates and Xanthippe, then I’d better go and give them one or two of my hard-earned drachmas."

"Hard-earned. You haven’t worked a day since you got bounced from that Parthenon job. Best job you ever had, thanks to Pericles!"

"Thanks to Pericles? You mean it was his money that paid the stone-carvers? You make my point for me. Even if I conceded that I had an obligation to help the cartmakers, it would not follow that the archons or board of generals would be entitled to force me and the other citizens to contribute to their welfare. Or would it?"

Xanthippe is saved by the noisy entrance of a semi-intoxicated young man .

"Why, it’s Pheidippides, that new student of yours at the Phrontisterion. What does he want? I hope he’s come to pay his bills."

"Actually, Xan, I’ve come to prove that neither I nor my father owe any debt to the old man here. A teacher, after all, is supposed to make a man better than he was, and while it is true that I’ve become damn good at arguing our way out of our debts, everyone says I am worse than I was. Argul, I owe no money. But, didn’t I hear you two talking about the bailout? Lucky for you, I am hear to explain the whole thing. It’s very simple"

"You??!!" exclaim the old philosopher and his wife.

"Actually, it’s not so much me as Protagoras. As you know, I’ve learned all I can learn from the old guy here, so I’ve been hanging out with Protagoras. You know Protagoras, Sockie?"

"You mean ‘Man is the measure of all things’ Protagoras?"

"Yeah, that one. Well, what I learned from him is something his brighter students are calling the theory of subjective value. Basically this means that while you might like Sophocles and all that morality jazz, I go for the hot new stuff of Euripides and Philoxenus. They get to me, you know. I get so stirred up I want to bang my head on pillar or go out and mutilate some herms. Well anyway, you might like your wife and I might go for Alcibiades–and believe me I do–and you might like to help the needy and I might prefer to spend my drachmas on getting drunk and picking up boys, and that’s all right because beauty is in the eye of the beholder and value simply means what you are willing to spend time, money, attention on. Get it? I don’t owe nobody nothing, not even my mom and dad, if it doesn’t give me pleasure to feel that I owe them."

"I’m surprised Protagoras puts up with you and the other hooligans. He’s a well-intentioned man, even though he has not exactly thought through the argument. So you conclude from this line of reasoning that you are even free, for example, to beat your father and mother, if you enjoyed doing it."

"Perfect, man. That’s exactly what I did this morning, and boy, is old Strepsiades ticked. He talked about burning down the Phrontisterion–he thinks I get this sh-t from you."

"In a way, I suppose I am guilty. In trying to teach you to think, I only got you to the elementary stage of challenging your conventional beliefs. You left before we got to the part about an immortal and universal basis for moral principles."

"Can it, Sockie. I’m Protagoras’ man now."

"It sounds to me that this is less Protagoras or even that red-bearded Jew who talks so much about the laws of the market–why should he care so much about how the market officials regulate weights and measures?–It sounds to me like you’ve been hanging out with the crazy Scythian prophetess, Anus Randius I think she’s called. What a name. Sounds like an aging bugger! Look, Pheidippides. Go back and apologize to your parents and lay off the philosophy. You don’t have the head for it. Even Plato–and on politics he’s as crazy as his uncle Critias–knows what every Greek knows, that we have a special duty to our parents, and just as we have duties to parents, so we have duties to our kinsmen and fellow-Athenians. That much you could learn from a trip to Delphi."

"Not me. I believe in the holy trinity of me, myself, and I. I am the measure of all things, of things that are, that they are, and of things that are not, that they are not. If there are gods–and I by no means think there are–they live off in their own sphere and take no interest in our affairs. You know what your friend Critias says–and Anus Randius and her teacher Frederikos have picked it up from him–that weak men invented religion and morality to enslave the strong who, by nature, should take whatever they can get. If people are dumb enough to have children they have to spend money on or risk their lives fighting for their country, that’s just the way they get their kicks, but not little Pheidippides. You know, the old man named me "Spare the horses" because he did not want me to become a spendthrift like my mother and her high-toned family. When I’m through, there won’t be any horses–much less carts–in all of Athens. I want the world and I want it now.."

"Boys," says Socrates motioning to two sturdy slaves, who proceed to beat up Pheidippides.

"Some arguments can only be answered with a blow of the fist. I told that one to Plato the other day, when he started talking about raising children in common. I didn’t persuade him, but I think he has been telling it to his own students. Stand up, Pheidippides. Xanthippe, give him something for the fat lip and bleeding nose. Are you ready to listen to reason?"

Spitting blood and teeth, "Go marry yourself, Socrates."

After another round of gentle instruction, Socrates repeats his question and a chastened Pheidippides nods his head down, which is Greek for yes.

"Fine. Now that we have silenced this childish ruffian–would that we could do the same to Anus Randius and all her teachers and disciples–we can talk like adults. We are not random strangers, we Athenians, but fellow citizens in a commonwealth founded by the goddess Athena and the earthborn king Erechtheus and unified by Poseidon’s great son Theseus. The bones of heroes are buried on our territory, and their spirits and the ghosts of our ancestors watch over us, but more important than these heroes and ghosts are the nomoi , the traditional laws and customs that preside over our marriages and births and the rearing and education of our children. They make us who we are, and without them we are mere beasts–as this Pheidippides would like to be. Everyone, even a Scythian slave, has some dim awareness of this, as he dreams of returning home to see his mother once again before he dies. These sophists, who prate about being individuals–these little professors sponging off the city and pretending to a wisdom they shall never have–they think that by denying the obvious, they are being clever. Why not tell people to fertilize their fields with wine and oil and grain and save the horse manure for the table?

As rational people we start, not with some wild speculation, but with what we know to be true and then proceed to extrapolate from the known. Any man that denies the bonds of loyalty to family, kin, and country, is not only a fool, but no man at all. In uttering such inanities, he excludes himself from civilized discourse. If some day the Nomoi of Athens should tell me, in the mouths of a jury, that I must die for the crime of turning out students like this one here, then I shall go to my death, cheerful in the knowledge of my own innocence and happy in obedience to my people and their laws. "

"Does this mean, dear husband, that you agree with me and are now saying that the bailout is right and proper?"

"By no means, my dear wife. We have only established two basic principles so far, and we are a long way from any conclusion."

"What principles are those?"

"First, that a moral obligation to a group of people does not necessarily entail a political obligation, and, second, that our moral obligations cannot be reduced to this foolish and self-refuting theory of "subjective value."

Pheidippides: "For the sake of argument–and keeping what teeth remain to me–I’ll concede ‘foolish,’ oh gentle teacher, but why self-refuting?"

"Did it never occur to you or the Randys that the theory must be applied to the theory itself, that is, that subjective value is simply a subjective value to you but not necessarily to anyone else. Since I don’t accept this theory or any other similar theory [here Socrates, by divine intuition, is rejecting Kant's Categorical Imperative], then I could proceed to agree with my failed student Critias, namely, that I can do with you exactly what I want–I’m thinking of chopping you up and using you for fishbait: You’re more like a worm than a philosopher."

"But wait, oh wise and noble teacher, there another principle we adhere to, and this one you will surely agree with: that it is always wrong to commit aggression. Since no one wants to be attacked, he should not attack."

"By no means. Your theory excludes anything of the kind. This is just another one of your subjective values, which Critias and I don’t accept. Sorry, you’re fishbait. Now, then, back to the bailout. What would you say, then, Xanthippe, do we Athenians as a people and as a city have an obligation to protect all businessmen and their employees from the consequences of bad decisions?"

Pheidippides, breaking in: "No, people enter the marketplace to buy and sell, and the system only works if poor businessmen are allowed to fail and good ones prosper."

Socrates: "Pheidippides, at last, has contributed something to the discussion. Yes, we can agree with the Redbearded Scythian that buying and selling operate like the laws of arithmetic. You make a better product, more people want it, scarcity ensues, the prices goes up, and the producer makes more money and in his affluence is able to hire workers and contribute to the city. These laws of his are very much like the laws of nature–right, Pheidippides?"

"Yes, Socrates, and they cannot be infringed?"

"Not infringed? You mean cannot be infringed without some damage. For example, we know that if we jump out the window we shall fall to the ground, possibly hurting ourselves."

"Yes, Socrates."

"But suppose we are being attacked by a man who intends to rob us? Should we not then be justified in jumping out the window, even at the risk of breaking a leg?"

"I suppose so, but what does this have to do with what we could call the law of supply and demand?"

"Simply this: These natural laws of the market place–if only Greek had some word for them–are simply the way things are, but, on the other hand, we might conceivably wish to break them for a higher reason. For example, Athenians make the best pots in the world, but they are costly as well as beautiful. Suppose some Phoenician bought a load of cheap Etruscan pottery and brought it to the Peiraeus, where they sold so well he hurt the business of the potters whom future races will celebrate as one of the glories of Athens."

"Tough, Socrates. If people want cheap, they should be able to buy cheap."

"Why, Pheidippides?"

"Why, because…because… because…"

"Because we have a right to buy at the cheapest price?"

"That’s it exactly."

"Where does this right come from, in your philosophy? Wouldn’t a rugged individualist like you say, instead, that if the potters were strong and could drive the Phoenician out of the market place, they would be doing a smart thing?"

"But that would not be fair."

"Fair? Where does a Randian get off talking about fairness. We are talking now about power, not justice. What you really mean to say is that while I may like the amphoras painted by Euphorion, you like cheap junk well enough to be satisfied with it so you can save your money to spend on little boys. We’ve been through all that. Perhaps my slave boys did not explain it clearly enough?"

"Why do we always have to go back to threats? Don’t you have any arguments?"

"My dear Pheidippides, what you don’t understand is that I am using your own arguments–or rather those of your demented masters. If there are no standards of the beautiful and the ugly, the virtuous and the vicious, the just and the unjust, then we are left only with the law of tooth and claw. So, to return to the point: The laws of the market tell us what price we shall have to pay if we increase tariffs or ban some imported gods or give public money to the cartmakers but like other natural laws they cannot tell us what we ought to do on any occasion. The fact that water flows down hill does not mean that we should be wrong to row upstream, if that were teh direction we wished to go."

"I suppose not, Socrates."

"Suppose not will have to do for the moment, but you still think it is wrong to spend money on potters or cartmakers.

"I do."

"That is enough on this for now. So, Xanthippe, Pheidippides apparently thinks it would be wrong to use his small share of Athenian taxes to subsidize an industry. What do you say, that it would always be right?

"By no means, Socrates. Surely you would agree with me that some businesses are more important than others. For example, if Pasion’s shield business went bankrupt in the middle of a war, and all the slaves were dispersed, that would not be a good thing, would it?"

"No, Xanthippe, it would not."

"And what about those potters and painters you were bragging about. Hundreds, probably thousands of Athenians work in that industry, which has spread the fame of our city all the way to the Scyths who live beyond the Euxine Sea. That would not be good, would it?"

"No, indeed, Xanthippe. But are you saying that, because the loss of an industry would be a bad thing, our state officials necessarily have to rescue it, and it they do, are there no requirements? Let us put it another way. Is saving an industry a good thing, and if it is, what kind of a good thing is it?"

"Here we go again with the dialectic. If only Plato or Antisthenes were here to back me up! What do you mean by "what kind of"?

"I mean simply this. There are different kinds of good things: Some are quite trivial and can be dispensed with–a vase of flowers on the table, good wine with dinner, a good song of Simonides–while others are indispensable, like food and shelter. But even in the case of indispensable things, like food, it may not be incumbent on one particular human being to provide food to another. With limited resources, I cannot feed every starving man in Athens. So would you say that saving an industry is like a vase of flowers or is it indispensable?"

"It must be indispensable; otherwise you will soon be showing me that Pheidippides’ subjective value argument has at least the merit of giving us the freedom to choose."

"Then, if it is indispensable, is it incumbent on all of us or is it simply meritorious."

"I would say it is incumbent on all of us.."

"To rescue every failing business?"

"Well, no, but I thought you would trap me if I said meritorious."

"So meritorious, then, liking giving food or money, when we can spare it, to a beggar."

"Yes, something like that, though…"

"Though what, you don’t like giving up the idea of a universal obligation to help out every ailing business in Attica. What a patriot you are, Xanthippe."

Xanthippe is perplexed, but she is again relieved from the burden of answering her husband’s terrible questions by the entrance of another young man, actually a mere youth.*** This one has the broad shoulders of a wrestler and the noble face with the inspired look one sometimes sees on people too good for this world. For once, Xanthippe is happy to see one of her husband’s students:

"Plato! Come in, just the man we wanted to see."

"Me, Xanthippe? I am flattered."

"Socrates has been giving me the going over he usually saves for his disciples–he must be bored this morning-and he is trying to get me to say that the Athenian people are either not required the help cartmakers or even that it would be wrong to do it. Prove him wrong, Plato. You know you’re his smartest student. He always says so, and by refuting him, you will win his respect and gratitude. Won’t he Socrates?"

"Yes, indeed. Tell us, my dear boy, what you think and don’t spare my feelings. My only interest is the truth, that is, supposing that there is such a thing and that it is possible for us mere mortals to find it out."

"Well, Socrates, I think you know my opinion, though we rarely talk about the question. I believe that Athens has been ruined by the greed of businessmen. The current collapse of the cartmakers is the result of the greed of the owners and the laziness and impudence of the slaves they have overpaid. The Spartans are better men than we are, because they are more virtuous. There the greedy individualist is nothing: the commonwealth is everything. That is as it should be, and that is why they are beating us in this war."

"So, I take it, that you would let the cartmakers go belly up and do everything to drive business and industry out of Attica?"

"By no means, dear teacher. For the time being, we are what we are, but the first step toward turning Athens into a just republic would be to take over all the major industries and run them for the common good. The slaves and free workers have been greedy and foolish, it is true, but they are far less culpable than the owners and foremen. We the people of Athens owe them employment and a decent living. After all, we are not Phoenicians, who look upon their fellow human beings as objects to exploit.

Socrates: "So, Plato, you go further than Xanthippe and think our city should actually own and manage the means of production."

"Yes, I do, Socrates. After all, producing and buying and selling are all part of the public realm, are they not? No one, after all, sells wine to himself or to his mother, does he."


"And, as you have always taught us, the public realm, that is, the city and its rulers, should not be governed by the man on the street but only by those who have the skill and wisdom to steer the ship of state. Since the market place is part of the public realm, it should be managed by the wisest men of the city for the benefit of everyone and not just a few greedy businessmen."

Socrates: "And do you, Xanthippe, agree with your young friend?"

Xanthippe: "I don’t know. What he says sounds reasonable."

Socrates: "It does indeed."

Pheidippides: "Good grief, Sockie, you can’t be falling for this drivel. God help your reputation if this student of yours ever puts his ideas into your mouth after you’re dead. Look, Plato, I know that I am not very bright and you are very smart, but let me ask you this one question. To which of the leaders of our city would you entrust the ownership of all the major industries and businesses. The pious Nicias perhaps? Or Cleon? I know he’s dead but isn’t a vulgar scoundrel like him just the sort of person who would control the markerts? So who gets to be master?

"None of them."

"Then who will run things, the gods you don’t believe in?"

"Obviously, Pheidippides, you do not understand me, and, to be fair to you, I didn’t expect you to. We need a system like Sparta’s, where children are raised not by selfish parents but by the entire city, who will make sure that they grow up to be wise and honest."

"You obviously don’t know much about Sparta these days. What you say may be partly true about Sparta before the wars with Persia. Their greatest hero, Pausanias, got so greedy and ambitious that he plotted with the Persians against Sparta and all of Greece."

"I didn’t say Sparta was perfect, only that it offers a rough outline we could improve upon."

"In other words, Plato, you are saying that when we men become gods–or better than the gods, because they too are greedy and lustful and violent–we can live in peace and harmony in a state ruled by great leaders who will work only for the common good? Don’t bother to answer because you know what comes next: We don’t live in Neverneverland but in Athens, where everyone is out for his own interest, and in seeking his own interest, each man is prodded to take care of himself and his family. This is what Hesiod meant when he described the good kind of strife, the healthy emulation that leads men to greater and greater achievements."

Plato: "You have a very low opinion of men, if you think we are good for nothing but making money and quarreling with each other."

Pheidippides: "Why call it low, when we are what we are? It is people like you, with your wild dreams, who would enslave us to some irationally rational ideal."

Socrates: "Boys, boys, can’t we get back to the topic? Let us give up speaking, oh my beloved student, of what men might be able to do if they all became such good students as you are, and let us return, instead, to the issue. Pheidippides, though he does indeed misjudge what man is capable of of and would enslave us to our bellies, has a point. One man’s greed, when checked by another’s, is a better way of controlling markets than any rule by experts. But surely, there must be some Golden Mean, between Pheidippides’ moral anarchy and Plato’s moral dictatorship. Well, then, let’s take a closer look at those cartmakers in the Piraeus. Perhaps if we can once determine how they got themselves into such trouble, we can say one or two useful things about the solution.


**The story of Pasion is true, but it takes place in the next century.

*** To be honest, Plato was only 9 when Pheidippides was sent to study with Socrates, that is, when Aristophanes put on the Clouds .

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