Response: Ethics and Money Part 3 (Plato's Contribution)
Amongst other things, Mandelson wants University Degrees to be more directed to contributing to the economy. It is, of course, perfectly reasonable for there to be a public debate about how publicly-funded Universities contribute to the public good. Nevertheless, three questions immediately occur:
1) How is 'economy' to be defined?
2) How does the economy of a state fit in with the overall well-being of the state?
3) How is contribution to the economy to be assessed, and by whom? Can it always be quantitatively measured? (The answer to this will naturally depend on how one answers 1) above.)
If it turns out that these three questions have not been fully thought through, then I would recommend a little Plato ...
In Plato's Republic, a dialogue in which the character of Socrates outlines what he claims is the development of an ideally just state from scratch, money is introduced fairly early on (in 371b in Book 2) to facilitate the exchange of basic goods and services. If each human has to produce everything required to satisfy even their basic material needs, life would be almost impossibly hard: we would each have to produce not only our own food, shelter and clothing, but also all the tools needed to produce these things, and even the tools to make the tools. So it makes sense to specialise in different trades and exchange the products, and money is the best means of facilitating this exchange. The function of money is thus to make life easier and provide us with more leisure. It is invented by humans as an efficient means of satisfying certain basic needs.
The trouble, as Plato sees it, is that human psychology makes it very difficult to keep money as the efficient, labour-saving tool that it was designed to be. This is for three main reasons:
a) Our appetites are essentially unlimited - they do not just aim to satisfy our basic physical needs but want more and more goods and goodies - so our appetite for money will also be unlimited.
b) This would be bad enough, but it's made worse by the fact that the things that our appetites desire are often in limited supply - so conflict can break out in the struggle to obtain them. At Republic 373e we are told that the origin of war is the same as that of most evil - greed. And in another dialogue, Phaedo, the message is even blunter: 'all wars are made to get money' (66c). And we may lose these wars and struggles; they may end up depriving us of the very thing they were designed to obtain in the first place - money. This seems to be one of the warnings embedded in the Atlantis legend at the end of Plato's Critias.
c) In Plato's psychology, the desires for e.g. food and drink and the desire for the money needed to obtain them all belong to the same appetitive 'part' of the psyche. But we can quickly start desiring money for its own sake (particularly as money so often has symbolic value, as we have already seen in Parts 1 and 2 of 'Ethics and Money'), and not just as a means to satisfy other desires, and this desire to hang on to our money and gloat over it can prevent us from buying the things that would satisfy those other desires. So there are often internal contradictions in our desire for money.
Fortunately, Plato also holds that in the ideally just psyche this internally contradictory and essentially insatiable appetitive part, bent on goods in short supply, is to be ruled by another part - a rational part which has its own rational desires for truth and reality. Our desire for and pursuit of money should fit in with a bigger picture of the good life based on reason.
This is not, however, the view of one of the founding fathers of modern capitalism, Adam Smith, who holds that humans are ruled by appetitive desire and seek their own individual appetitive gain (though he does admittedly believe that if trade and markets are managed properly, the pursuit of private goals can have public benefit). David Hume, too, argues that reason is and ought only to be the slave of the passions. Modern rational choice theory can look as if it is based on the same assumptions.
So; the question we have to ask ourselves is: how many kinds of desire do humans possess, and how many of these can be served by money? It is not until we know what we think about this that we - or Mandelson - can answer questions 1) and 2) above.