Economics, Competition and Academia

Economics, Competition and Academia

An Intellectual History of Sophism versus Virtue

Donald R. Stabile

Donald Stabile places current concerns over the commercialization of academia in a historical context by describing the long-standing question of the extent to which market economics can and should be applied to higher education. The debate between Plato and Aristotle on one side and sophists on the other provides a foundation for the modern debate of endowment versus tuition models. The author tackles the intellectual discourse over the mission of higher education and the effect markets and competition might have on it. The discussion encompasses the ideas on higher education of leading economic thinkers such as Adam Smith, Jeremy Benthan, John Stuart Mill, Alfred Marshall, Thorstein Veblen and John K. Galbraith and identifies them as supporters of either sophism or virtue. Included, too, are the thoughts of educators and policymakers influenced by free market ideas, such as Benjamin Rush, Francis Wayland and Charles W. Eliot, as well as those opposed to them. In addition, the author explores the development of collegiate business schools in the US and how they were justified on the basis of virtue. The book concludes with a section on for-profit colleges and their relationship to sophism.

Chapter 2: Sophism, Academia, and Greek Economics

Donald R. Stabile

Subjects: economics and finance, economic psychology, public sector economics


Historians of economic thought have traditionally questioned whether the ancient Greek philosophers comprehended the workings of the market (Blaug 1991; Petrochilos 2002: 600). As S. Todd Lowry has written, ‘The most fundamental question of substance in this material is the failure of the ancient Greeks even to advance a theory of general market price’ (Lowry 1969: 65). To be sure historians can give examples of indications of market ideas, such as the writings of Democritus, who produced a treatise on economics that did not survive intact, or Xenophon, who had a rudimentary understanding of how the market fostered the division of labour but did not elaborate on it (Roll 1956: 28; Lowry 1987: 45–79). There is also the case of an early poet, Hesiod, who showed an understanding of the basic problem of scarcity and the need to make choices as a result (Gordon 1963: 147–51). One explanation for the lack of a systematic study of market economics by the Greeks, as Karl Polanyi has pointed out, is that the use of market exchanges based in profits was new to Athens during the period of classic Greek philosophy (Polanyi 1971: 67). While there was a growing commercial sector with a related class of merchants, political and social power was held by aristocratic landowners. These landowners used slavery as the basis of their output and wealth, which minimized their use of exchange. Another explanation is that the trade in Greece involved the unique products of artisans and thus was...

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