chapter  10
20 Pages

Formalising Functions: The History of a Passing Challenge to Capitalist Economy

Our idea of the economy is modern. In most premodern societies the principal unit of production and distribution was the household, and our word and concept of economy can be traced back to the Greek oikos or household. Paradigmatically, the oikos was purposefully directed and ruled by the visible hand of its patriarchal oikonomos, who delegated to his wife management of their children and slaves. In much of mediaeval Europe peasant households were encompassed within the larger economy of the manorial or castlery household, whilst the royal household increasingly domesticated agrarian aristocrats into urban courtiers. What was thereby eroded may be understood as a feudal system in which a hierarchy of lords and vassals had unequal and different, but nonetheless reciprocal, rights and duties. Early modern ‘political oeconomy’ saw royal chancellors tax and ‘police’ productive activity in ways claimed to be for the public good, and which, alongside public debt, financed an increasing concentration of coercive power and of legal and administrative authority in the hands of the sovereign. Limits to this coercive order were identified by Adam Smith’s theoretical abstraction of a specifically commercial order, which operated and expanded as if providentially directed by an ‘invisible hand’ through the division of productive labour (Smith 1976: 456). This order has become an object of enquiry, explained in terms of specifically economic laws that seemed to have the causal force of Newtonian nature. The nomoi that order the economy were held to be entirely impersonal, operating independently of human purposes.