What can Plato teach us about the Financial Crisis?

Now the UK government has cut Universities’ Arts and Humanities funding by 80%, it’s crucial to remind ourselves why studying Arts subjects is vital to the health of the nation. Why not simply do away with them, and dragoon everyone into science and technology, the dividends of which are comparatively determinate and more obviously lucrative? Since my background is in Philosophy, I’m going to answer this question by looking at Plato’s Republic – one of the oldest texts in the Western tradition, and one of the most relevant to our times.

The Republic is about justice, and towards the beginning of the dialogue Socrates challenges us to think about what justice rules out. In the first of three pungent arguments, Socrates asks his interlocutor, Polemarchus, whether someone able to prevent disease is also able to produce it – and Polemarchus agrees that such a person would be equally adept at both. Socrates enquires next whether the skilled guardian of an army is also able to steal the enemy’s plans – certainly, comes the reply. So, Socrates presses, if a just person is clever at guarding money, he must also be clever at stealing it – Well, says Polemarchus, somewhat reluctantly, ‘at least according to our argument’. And this gives Socrates the chance to deal his death-blow: a just person has, he concludes, turned out to be a kind of thief, and justice ‘some sort of craft of stealing’.

This conclusion is, as Socrates knows, clearly false – after all, Dr Howard Shipman was a doctor only in name, and a good banker does not steal his clients’ money. So where has the argument gone wrong? It’s gone wrong, I take it, in assuming that a profession is simply a matter of mastering certain means-end techniques, which can be directed to morally indifferent ends: health or disease, safeguarding or stealing. Treating a profession in this instrumental manner is, Socrates implies, to denature it, to deprive it of the moral context in which it functions properly. And in this way, he points to what has denatured our own financial institutions: the use of banking expertise to steal, or at least not safeguard, ordinary clients’ money, thereby undermining the common good. Put bluntly, Socrates has shown, over two thousand years ago, how bankers – while maintaining their professional title – can become crooks, making a mockery of justice.

After Polemarchus, Socrates goes on to tackle Thrasymachus, the anti-hero of the dialogue, and one of Plato’s greatest dramatic creations. Thrasymachus argues as follows: some cities, he points out, are ruled by a tyranny, some by a democracy, and some by an aristocracy. But in each case, the regime makes laws to its own advantage. Having thus rigged things in its own favour, he maintains, a regime declares such laws to be just, and punishes anyone who goes against them as lawless and unjust. ‘This, then’, Thrasymachus adjures, ‘is what I say justice is, the same in all cities, the advantage of the established rule’. And he concludes that since the ‘established rule’ always constitutes the stronger party in a state, ‘the just is the same everywhere, namely, the advantage of the stronger’.

This argument is neat, but also disturbing, and Socrates is keen to refute it. He begins by mounting an argument from analogy. Does medicine seek its own advantage, he asks, or that of the human body? Does a ship’s captain seek his own good, or that of his ship and crew? Thrasymachus feels compelled to affirm the second option in both cases. But from this it would seem, Socrates remarks, that ‘no one in any position of rule … seeks or orders what is advantageous to himself, but what is advantageous to his subjects’. Yet as Thrasymachus is quick to point out, this fails to take account of a practice like shepherding, the aim of which is precisely to care for sheep – but only because and insofar as this fattens them up, making them fit for slaughter. Indeed, he draws a direct parallel between shepherding and governing, reaffirming the latter as the wholly exploitative profession he’d outlined at the start. How does Socrates get around this?

Although Thrasymachus is right that shepherds are ultimately self-interested, Socrates has shown they must, nevertheless, also abide by certain constraints: in order to sell their sheep, they must first treat them well, or at least non-tyrannically. And this turns out, in effect, to be Socrates’ crucial point: by reducing justice to sheer power-advantage, Thrasymachus has – despite his acknowledgement of a variety of regimes – assimilated all rule to tyranny. For whereas democracies honour power only to the extent that it reflects the popular will, tyrannies pursue power unconstrainedly and per se. It follows, then, that if a government privileges various interests (such as those of multinational banks) essentially in virtue of their power, and whether or not they reflect the interests of its own people, it assimilates itself, to one degree or another, to a tyranny.

Socrates’ final argument builds on the previous two. ‘Tell me’, he says, ‘is a doctor in the precise sense … a money-maker or someone who treats the sick?’ – to which Thrasymachus responds, ‘He’s the one who treats the sick’. Why is this admission significant? Because it reveals, I think, what lies at the heart of Socrates’ moral critique. Whereas medicine treats the sick, those who are essentially money-makers make money also by failing to treat them, or even hastening their demise. And whereas finance properly serves it customers, pure money-makers can succeed also by defrauding them. In other words, unconstrained money-making undermines the purposes of one’s profession. Furthermore, by privileging money-making over one’s profession, one necessarily privileges self-interest over the common good. For given a conflict between money-making and, say, another’s health or financial security, the fundamentally self-interested person will always choose to make money.

So what can we learn from Plato about the financial crisis? Quite a lot, it turns out. And this is not only good per se, it may also indicate why the present government shows such indifference to the Arts and Humanities. For without them, there would be less chance of resistance to policies that have systematically undermined the common good.


  1. says

    In other words, a system so patently crisis-ridden and unsustainable must look after the people on its fringes who might succeed in looking beyond it and in finding a way out of the impasse.