David Orrell - Introducing Economics: A Graphic Guide

On my return, I set up school in a cave, teaching mathematics.

His school grew into what amounts to a pseudo-religious cult, based on the worship of number. The Pythagoreans were highly secretive and left no written documents, so we only know about them indirectly.

The Pythagoreans believed that all things were composed of number. Each number had a special, almost magical significance. The most sacred number was 10, which was symbolized by the tetractys.

Pythagoras is credited with the discovery that musical harmony is based on numerical ratios between string lengths. Because music was considered to be the most mysterious of art forms, this backed up the belief that the entire cosmos was based on number: what the Pythagoreans called the Harmony of the Spheres.

Economics, and money itself, are also based on the Pythagorean idea that all things can be reduced to number. Indeed, it is believed that Pythagoras was involved in introducing the first coinage to his region.

The word economics was derived from a work by the philosopher Xenophon (431c. 360 BC), who was influenced by Pythagoras. His tract Oikonomikos described how to efficiently organize and run an agricultural estate.

It must, I should think, be the business of the good estate manager at any rate to manage his own house or estate well.

He argued that complicated tasks could best be carried out through division of labour. An advantage of cities such as Athens, which was growing rapidly in size and complexity, was the availability of a variety of specialists. In smaller towns, people had to carry out more tasks themselves, which was less efficient.

While this conclusion predated Adam Smiths thoughts on the same topic by a couple of millennia (see ), in a slave-based society the coordinating of these specialists was a task for the estate manager, not the markets.

Platos Republic

Plato (427347 BC) took the idea of an optimally-managed estate a step further with his Republic, which described a utopian society ruled over by philosopher kings known as guardians.

To safeguard against corruption, the guardians will not be allowed to own property or lay their hands on gold or silver, and will receive only a basic living wage.
Their interest will therefore be for the wealth of the society as a whole, not themselves.

Every task, including the raising of children, would be allocated to specialists. Property would be divided according to mathematical principles. The maximum number of citizens was computed by Plato to be 5,040, which has the property that it is divisible by the numbers 1 through 10 and so can be easily divided into separate administrative groups.

Aristotle

Platos most famous student was Aristotle (384322 BC), who wrote and taught on subjects ranging from astronomy to medicine to ethics. He believed that the sole purpose of money was to act as a medium for exchange. As he wrote in Nichomachean Ethics, all things are measured by money.

According to Aristotle, the fair distribution of goods could be determined by different mathematical formulae, known as the Pythagorean means.