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The paradox of value in the teaching of the Church

Fathers

Joost Hengstmengel

To cite this article: Joost Hengstmengel (2021) The paradox of value in the teaching of the
Church Fathers, The European Journal of the History of Economic Thought, 28:5, 695-707, DOI:
10.1080/09672567.2021.1877758

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THE EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT
2021, VOL. 28, NO. 5, 695–707
https://doi.org/10.1080/09672567.2021.1877758

The paradox of value in the teaching of the

Church Fathers
Joost Hengstmengel
Erasmus Economics and Theology Institute, Erasmus University Rotterdam, Rotterdam, The
Netherlands

ABSTRACT KEYWORDS
The paradox of value is a classic puzzle in economics. It wonders Paradox of value; water-
why necessities are cheap while luxury goods are useless but diamonds paradox; Church
expensive. Often Adam Smith is cited as the “inventor” of the Fathers; Adam Smith
paradox. Few economists seem to realise that it was voiced by
numerous writers before. This article focuses on the Church JEL CLASSIFICATION
Fathers, and discusses the role and interpretation of the paradox B11; B12; D46
in their works. It argues that although these “theologians” did not
take the analysis of the paradox much further than their philo-
sophical predecessors, they elaborated on the subjectivity of value
and price, thus contributing to the genesis of the economic the-
ory of value.

1. Introduction
A classic puzzle in the history of economics is the “paradox of value” or “water-
diamonds paradox” (Skousen and Taylor 1997, 27–30). It wonders why necessities are
cheap while luxury goods are useless but expensive. How comes that water costs virtu-
ally nothing while diamonds command high prices? Why, in other words, do market
prices not necessarily reflect the real value of things? As the standard economics text-
book story or “myth” goes (Swales 1993; White 2002), a convincing solution to the
paradox came available only with the nineteenth-century marginal revolution in
economics. Even if earlier writers had recognised the role of utility and scarcity in
determining value, they failed to see the distinction between a good’s total utility and
marginal utility: the total utility of water far exceeds that of diamonds, but its marginal
utility as reflected in the market price is low.
Often the Scottish moral philosopher Adam Smith is cited as the writer who first
posed the paradox. As can be read in the Wealth of Nations (1776), in a chapter on the
origin and use of money,

CONTACT J.W. Hengstmengel j.w.hengstmengel@esphil.eur.nl Erasmus Institute for Business Economics,

Erasmus Universiteit Rotterdam, PO Box 1738, DR Rotterdam, 3000, The Netherlands.

ß 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives
License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in
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696 J. HENGSTMENGEL

things which have the greatest value in use have frequently little or no value in
exchange; and, on the contrary, those which have the greatest value in exchange have
frequently little or no value in use. Nothing is more useful than water: but it will
purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond,
on the contrary, has scarce any value in use; but a very great quantity of other goods
may frequently be had in exchange for it (Smith 1976: I.iv.13).
Smith’s intent was not to solve the paradox but to illustrate a distinction as old as
the Greek philosopher Aristotle between value-in-use, or “utility”, and value-in-
exchange. Elsewhere, in his earlier lectures on jurisprudence (Smith 1982, 333, 358, 487
and 496), Smith twice introduced the same water-diamonds example to identify the
real determinants of market value, to wit supply, demand, and people’s disposable
income. Diamonds are expensive since their supply is insufficient to meet demand,
whereas water is cheap because of its abundant supply.
Few economists seem to realise that numerous writers voiced the paradox of value
before Smith. As various historians of economics have shown (e.g., Schumpeter 1954,
300; Robertson and Taylor 1957; Viner 1972, 28–32; Winfrey 1993, 312–314), Smith’s
discussion of the paradox may have been inspired by political-economists like John
Law and Joseph Harris and natural-law philosophers like Grotius and Pufendorf. Even
a natural philosopher like Galileo, whom Smith studied carefully, happened to mention
it (Maital and Peach 1973; Ekelund and Thornton 2011). As a matter of fact, many
more seventeenth and eighteenth-century writers commented on the paradox, conclud-
ing that prices are determined by relative supply and demand, among others.1 Still, it
was not an early-modern invention. Like so many ideas, it has a much longer lineage
and goes back all the way to classical antiquity (Bowley 1973, 66; Viner 1972, 27–28;
Mitsis 2020). In his De jure naturae et gentium (1672) account of value and price,
Pufendorf presented instances of the paradox in Plato, the sceptic Sextus Empiricus
and, least to be expected, Vitruvius, the Roman architect.
What is less known, and passed over in silence by Pufendorf, is that medieval theo-
logians and early-Christian writers employed the paradox of value alike, if not explicitly
then implicitly. Even though it is implausible that Smith borrowed the famous paradox
from the scholastics or the Church Fathers, two groups of writers he systematically
ignored, it is interesting to see what these theologians had to say about it. How, and in
what context, did they present this age-old puzzle in the history of economic thought,
and how advanced were their analyses of it? Leaving aside the contribution of the scho-
lastics (see, for instance, Langholm 2009), who some believe even solved the paradox

1
In reverse chronological order: Lord Kames, Sketches of the History of Man (1774), Joseph Harris, An Essay
Upon Money and Coins (1757), Francis Hutcheson, A System of Moral Philosophy (1755), Ferdinando Galiani,
Della moneta (1751), Nicolas-François Dupr
e de Saint-Maur, Essai sur le monnoies (1746), Hutcheson,
Philosophiae moralis institution compendi (1745), William Pulteney, Some Thoughts on the Interest of Money in
General (1738), Johann Gottlieb Heineccius, Elementa juris naturae et gentium (1742), J. Jocelyn, An Essay on
Money and Bullion (1718), Daniel Defoe, A Review of the State of the British Nation (1713), John Law, Money
and Trade Considered (1705), Jean Domat, Le droit public (1703), John Locke, Some Considerations of the
Consequences of the Lowering of Interest and Raising the Value of Money (1692), Samuel Pufendorf, De officio
hominis et civis juxta legem naturalem (1682), Charles Molloy, De Jure Maritimo et Navali (1676), Pufendorf,
De jure naturae et gentium (1672) and Elementorum jurisprudentia universalis (1660), Anthony Ascham, Of the
Confusions and Revolutions of Governments (1649), Galileo, Dialogo sopra i due massimi sistemi del mondo
(1632), Hugo Grotius, De jure belli ac pacis (1625), Bernardo Davanzati, Lezione delle monete (1588), and
Thomas More, Utopia (1518).
 THE EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT 697

long before the marginalists, this article focuses on the contribution of the Western
and Eastern Church Fathers. To find out in what respect their interpretations differed
from those of Plato, Sextus Empiricus, and others, we will turn our attention to the
classical philosophers in the next section first. As will be shown in the third section, it
was from the same classical writers that the Church Fathers drew inspiration in their
discussions of paradox. The final section concludes.

2. Classical-Philosophical thoughts
The first to observe a paradoxical relationship between value and utility was Plato. In
one of his early dialogues dealing with sophism, the Greek philosopher has Socrates
say, “it is the rare thing, Euthydemus, which is the precious one, and water is cheapest,
even though, as Pindar said, it is the best” (Euthydemus 304b; Plato 1997, 743). The
addressees of these words are two sophists who have just publically displayed their
highly effective sophisms. Socrates’s sarcastic advice to Euthydemus and his brother
Dionysodorus is to stop with public performances in front of large crowds for their
verbal skills may easily be copied by their audience, without giving them credit. They
better perform only in private while asking for an attendance fee. Only in this way do
their sophisms retain their value because “it is the rare that is precious”. Socrates’
remark that water is best should accordingly be read as a sneer at the sophistic method.
Often what is really valuable, including his own Socratic method, is cheap and read-
ily available.
The phrase “water is best” in antiquity was proverbial. The words come from the
opening lines of Pindar’s Olympian Odes that compare the Olympian contest to water
and gold:
Best is water, while gold, like fire blazing
in the night, shines preeminent amid lordly wealth.
But if you wish to sing of athletic games, my heart,
look no further than the sun
… nor let us proclaim a contest greater than Olympia
(Olympionikai 1.1–7; Pindar 1997, 47)
Rather than being contrasted, water and gold here figure as metaphors for the
Olympian Games, the best content of its kind. Whereas water is best when it comes to
life, and gold is the best form of wealth, an Olympian victory is superior when glory is
concerned (Race 1981). As the sixteenth-century humanist Erasmus of Rotterdam
explained in his annotated collection of Greek and Roman proverbs, we use the saying
water is best “when we advance something as being better than something else that is
highly thought of” (2006, 424). In Erasmus’s reading, Pindar admits that water is an
excellent thing but in the end prefers gold. However, the immediate context of the
proverb seems to suggest that Pindar values them equally.
Aristotle’s explanation of the saying, which may be closer to the original meaning, is
that the useful surpasses in goodness what is useless. His reference to Pindar in
Rhetoric is part of a discussion of the means of persuasion orators can use in the
698 J. HENGSTMENGEL

assembly. One of them is the idea of relative goodness and utility, in cases people agree
that two things are useful but disagree about which is the best. For example, a greater
number of goods is a greater good than a smaller number, and a self-sufficing thing a
greater good than a thing that requires other things. Aristotle continues:
what is rare is a greater good than what is plentiful. Thus, gold is a better thing than
iron, though less useful: it is harder to get, and therefore more worth getting. In another
way, the plentiful is a better thing than the rare, because we can make more use of it.
For what is often useful surpasses what is seldom useful, whence the saying ‘The best of
things is water’ (Retorica 1364a; Aristotle 1984, 2169-2170).
Apparently, there are two seemingly conflicting measures of valuation, namely scar-
city and utility. Some people value gold higher than iron (and water) because it is
scarce and laborious. Others regard water as more valuable than any other thing
(including gold) because it has the most utility. Paradoxically, this implies that the rare
is better than the abundant, and the abundant better than the rare at the same time.
As we learned from Pufendorf, the paradox of value can also be found in Marcus
Vitruvius Pollio “the Architect” (c. 80/70 - c.15 BC). The eighth book of his On
Architecture, which was very popular in Renaissance times, deals with the finding and
transporting of water. It opens with some general reflections on the four elements. To
Vitruvius, the four are equally important for human beings and animals, simply
because our bodies cannot do without their nourishment and assistance. Fortunately,
Divine Providence has made those things neither scarce nor dear which are necessary for
mankind, as are pearls, gold, silver, and the like, which are neither necessary for the body
nor nature; but has diffused abundantly, throughout the world, those things, without which
the life of mortals would be uncertain, [water, earth, air and fire that is] Water is of infinite
utility to us, not only as affording drink, but for a great number of purposes in life; and it is
furnished to us gratuitously (De architectura 9.3; Vitruvius 1970, 135).
What Vitruvius seems to suggest is that luxuries are scarce because they are useless.
This idea, that necessary things are abundant and cheap while useless things are scarce
and expensive, has Epicurean origins. “I am grateful to blessed Nature”, a saying attrib-
uted to Epicurus reads, “because she made what is necessary easy to acquire and what
is hard to acquire unnecessary” (1994, 102).
The last classical writer who formulated the paradox was Sextus Empiricus (c.
160–210), the author of an influential discourse on scepticism. Among many other
things, the book presents ten modes or tropes that cannot but lead to a suspension of
judgement about external objects and, in turn, ataraxia, a state of mental tranquillity.
The ninth mode (see Annas and Barnes 1985, 147–150 for a commentary) is based on
frequency of occurrence. The same objects that are striking and valuable to some are
familiar and worthless to others, depending on whether they are frequently or rarely
impressed by them. Usually
what is rare is thought to be valuable. For instance, if we conceive of water as being
rare, how much more valuable would it then appear to us than everything which seems
valuable! Or if we imagine gold as simply strewn in quantity over the ground like
stones, who do we think would fine it valuable then, or worth locking away?
(Pyrrhoniae hypotyposes 1.143; Sextus Empiricus 2000, 37)
 THE EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT 699

The lesson to be learned from this paradox is that frequency of observation deter-
mines our impression of external objects. Therefore it is better to suspend judgement
about their nature.

3. Theological applications
We now turn to the Church Fathers. As is well known, these early-Christian writers had a
dual attitude towards Greek-Roman wisdom. On the one hand, they rejected philosoph-
ical ideas that were judged incompatible with Scripture. There was much in Plato,
Aristotle, and others that contradicted Christianity’s revealed truth. On the other hand,
most Church Fathers were eager to put classical philosophy to good use, either by show-
ing similarities between “Athens and Jerusalem” or by merely echoing select sayings and
ideas. As part of the Greek-Roman heritage, also the paradox of value could easily be bap-
tised. But before discussing the Christian adoption in the second century by Clemens of
Alexandria, attention should be paid to a possible intermediary first.

3.1. Philo of Alexandria (c. 25 BC–50)

In the Old Testament or Hebrew Bible, the paradox is expressed nor implied (Viner
1972, 28). This did not prevent the Hellenistic philosopher Philo of Alexandria from
using it in a defense of divine providence. Philo, whose allegorical exegesis and attempt
to reconcile Jewish thought and Greek philosophy proved very inspiring to Christian
writers, thus was first to give it a theological application. The concrete objection to
which he responds is that disorder and corruption dominate human life. The thing is
that evil people enjoy wealth, health, and repute, while the lovers of wisdom and virtue
happen to be poor and unpopular. As Philo sees it, the wicked lack real happiness since
what they qualify as such is worthless to God, and thus also for the true philosopher.
Neither material wealth, good reputation, or physical beauty
ranks of itself in the sight of God as a good; for mines of silver and gold are the most
worthless portion of the earth, utterly and absolutely inferior to that which is given up
to the production of fruit. For there is no likeness between abundance of money, and
the food without which we cannot live. The one clearest proof of this is famine, which
tests what is truly necessary and useful. For anyone would gladly exchange all the
treasures in the world for a little food (De providentia 2.10-11; Philo 1941, 465).
So in the divine order of nature, the real value of things is determined by their indis-
pensability and usefulness.

3.2. Clement of Alexandria (c. 150–215)

Philo’s theological interpretation must have been a source of inspiration for the later
Church Fathers. It might be no coincidence that another Alexandrian, Titus Flavius
Clemens, better known as Clemens of Alexandria continued it. Regarding Greek philoso-
phy as a preparation for the Gospel, Clement sought to instruct his readers in the
Christian way of life. His Pedagogue or Instructor, a manual of Christian ethics, has a sec-
tion on the question of jewellery. It argues that Christians who yearn for precious metals
and stones busy themselves with what they do not need. To be attracted by shining gems
700 J. HENGSTMENGEL

and stones is pure “childishness,” to hang them around one’s neck a “silly” habit
unworthy of Christian women. Those wondering why then God created them are utterly
ignorant of the will of God. “He supplies us, first of all, with the necessities such as water
and the open air, but other things that are not necessary He has hidden in the earth and
sea. That”, Clement adds with an image from Herodotus (Historiae 4.13), “is why there
are lions to dig for gold, and griffins to guard it, and why the sea conceals the stone we
call the pearl” (Paedagogus 2.12; Clement of Alexandria 1954, 192). Even as far as necessi-
ties are concerned, Christians should confine themselves to what is easily obtainable.
Unlike Vitruvius, who similarly contrasted necessities and luxuries, Clement thus con-
cludes from the scarcity and inaccessibility of luxury goods that people should dismiss
them. God deliberately hid what is useless to human life and incites greed.2
Earlier in the Pedagogue, Clement presented his instructions regarding eating (sim-
ple meals are better than expensive menus that must be imported), drinking (water is
better than wine), cosmetics (unnecessary), and clothing. Central to his or, better yet,
Christ the Educator’s teachings are such ideals as temperance, modesty, sobriety, fru-
gality, and self-sufficiency. Above all, the Christian way of life is a simple life that pri-
oritises man’s soul. No more than lavish meals and ostentatious decoration, a follower
of Christ requires expensive furniture. Household utensils made of precious metals are
a waste of time and money. “Gold and silver, in general, are a possession that corrupts
both the individual and the community, for they exceed the demands of real need, are
possessed too rarely, are difficult to retain, and are not suited for ordinary use”. The
sense of cups, knives, and the like is usefulness, not expensiveness. “We easily praise
what we acquire by using them with contentment of mind, by preserving them readily,
and by sharing them readily. Certainly, things that have a practical utility are better;
therefore, inexpensive things are obviously better than costly” (Paedagogus 2.3).
It has been shown that Clement of Alexandria copied large parts of his Pedagogue
from Musonius Rufus (c. 20–101), the first-century Stoic teacher of Epictetus. Three
surviving lectures by Musonius Rufus on food, clothes, and furniture indeed convey
the same message of moderation: inexpensive food that is easy to obtain should be pre-
ferred to expensive food that is hard to obtain, and both clothes and household furni-
ture should be functional and non-expensive.
On the whole we can judge whether various household furnishings are good or bad by
determining what it takes to acquire them, use them, and keep them safe. Things that
are difficult to acquire, hard to use, or difficult to guard are inferior; things that are easy
to acquire, are a pleasure to use, and are easily guarded are superior (Diatribai 20.3;
Musonius Rufus 2011, 79).
Interestingly, Clement’s rule of thumb reads precisely the same. Omitted from his
Christianised version is Musonius Rufus’s explanation of man’s fondness for luxury.
Why, then, are rare and expensive furnishings sought rather than those that are readily
available and inexpensive? Because the good and noble things are misunderstood, and
instead of pursuing things that really are good and noble, thoughtless people pursue

2
This is a commonplace in classical literature. See Cicero, De officiis 2.13; Horace, Carmina 3.3.49–52; Ovid,
Metamorphoses 1.138–142; Seneca, Epistulae morales 94.56–57; De beneficiis 7.10; Naturales quaestiones 5.15;
Pliny the Elder, Naturalis historia 33.1; and Boethius, De consolatione philosophiae 2.5.27–30.
 THE EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT 701

things that only seem to be good, just as insane people confuse black things with white
(Diatribai 20.4).

3.3. Tertullian of Carthage (c. 155–240)

Clement of Alexandria’s dislike of luxury and ostentation is typical for early Christian
ethics as a whole (Giordani 1944, 194ff; Karayiannis 1994, 53–55). Two of its texts that
voice similar sentiments are Tertullian’s On the Apparel of Women and Cyprian of
Carthage’s On the Dress of Virgins, of which only the former containing catechetical
lessons for female converts is of interest to us. It shows influences of Clement and
Musonius Rufus. According to Quintus Septimius Florens Tertullianus, an early apolo-
gist well-skilled in rhetoric, the Christian woman’s principal virtues are modesty and
chastity. Seen in that light, female ornaments and cosmetics are outright inventions of
the Devil, which give rise to ambition and prostitution. God is only pleased by what he
produced himself, and things should only be used for the purposes assigned to them by
the Creator. The only reason for God to allow for the discovery and development of
luxury goods is that he wanted to test the believers, so that “we might have the oppor-
tunity of showing our self-restraint” (De cultu feminarum 2.10.5; Tertullian 1959, 114).
Gold and silver, the principal resources of worldly finery, are not superior in nature or
origin to other metals – they are all made of earth. Judged by their usefulness,
Tertullian writes, cheaper metals like iron and brass are actually better than gold and
silver. They have more applications and are more necessary for human life.
This naturally raises the question “why it is that gold and silver enjoy such high esti-
mation as to be preferred to other materials that are related to them by nature and are
much more valuable if we consider their usefulness”. Tertullian’s straightforward
answer is that gold, silver, and pearls alike are scarce.
The only thing that gives glamour to all these articles is that they are rare and that they
have to be imported from a foreign country. In the country they come from they are
not highly priced. When a thing is abundant it is always cheap (De cultu feminarum
1.5.4 and 7.1; Tertullian 1959, 124-125).
Proof of this is the fact, as reported by Herodotus (Historiae 3.23), that among cer-
tain barbarians the wicked are bound with golden chains because gold is indigenous
and plentiful there. Although the scarcity of luxury goods helps to establish intercourse
between distant nations, Tertullian argues, it at the same time is a source of immoder-
ate greed and ambition. It is these vices that really drive up the price of things. “For,
concupiscence has a way of growing greater in proportion as it sets a higher value
upon which it desires” (De cultu feminarum 1.9.3; Tertullian 1959, 128).

3.4. Eusebius of Caesarea (c. 265–339)

In Eusebius of Caesarea, who is best known for his Ecclesiastical History, we find simi-
lar ideas as in Clement and Tertullian. While Eusebius ascribes them to emperor
Constantine, the works in which they appear are of doubtful authenticity . In the Praise
of Constantine, which is added to some manuscripts of the Life of Constantine,
Eusebius repeats what was to become a commonplace in patristic thought: there is no
702 J. HENGSTMENGEL

reason to get excited about gold, silver, and pearls, for they are just stones like any
other stone.3
The wealth which others so much desire, as gold, silver, or precious gems, [Constantine]
regards to be, as they really are, in themselves mere stones and worthless matter, of no
avail to preserve or defend from evil. For what power have these things to free from
disease, or repel the approach of death?” (De laudibus Constantini 5.7; Eusebius
Pamphilus 1845, 307).
More interesting is his, or actually Constantine’s reflection on the providential abun-
dance of necessities compared to luxuries, as can be found in the apologetic Oration of
the Emperor Constantine Which He Addressed to the Assembly of the Saints:
It is [God] who has also distributed the metals, as gold, silver, copper, and the rest, in
due proportion; ordaining an abundant supply of those which would be most needed
and generally employed, while he dispensed those which serve the purposes merely of
pleasure in adornment of luxury with a liberal and yet a sparing hand, holding a mean
between parsimony and profusion. For the searchers for metals, were those which are
employed for ornament procured in equal abundance with the rest, would be impelled
by avarice to despise and neglect to gather those which, like iron or copper, are
serviceable for husbandry, or house-building, or the equipment of ships; and would care
for those only which conduce to luxury and a superfluous excess of wealth. Hence it is,
as they say, that the search for gold and silver is far more difficult and laborious than
that for any other metals, the violence of the toil thus acting as a counterpoise to the
violence of the desire (Ad coetum sanctorum 8).
Although it does not refer to value or price, the text has an economic ring that is
absent in Clement and Tertullian. In what follows, the author claims that the material
world deters greediness and allows for the practice of virtues like self-control.

3.5. John Chrysostom (c. 349–407)

Among the Fathers, it was John Chrysostom who contemplated most frequently about
the relationship between value and utility (Karayiannis 1994, 62–64; Karayiannis and
Drakopoulou Dodd 1998, 178–180; Mitchell 2004, 107–109). A student of the famous
rhetorician Libanius of Antioch,4 Chrysostom was well-versed in Greek rhetoric and
literature. His version of the paradox of value appears in the Baptismal Instruction to
Catechumens:
let us not consider that wealth is anything great, nor that gold is any better than clay.
The value of a substance does not come from its nature but from what we think about
it. For if we were to investigate the matter carefully, iron is far more necessary than
gold. Gold brings nothing useful into our lives, but iron serves countless arts and

3
Cf. Ambrose of Milan, De Nabuthae historia 5.26; Basil of Caesarea, Homiliae 6.4; 7.7; 8.4; Gregory of Nyssa,
De beatitudinibus 4; De oratione dominica 4; In Ecclesiasten Homiliae 338.23–343.9.
4
In this connection, it is interesting to quote another student of Libanius, Emporer Julian II ‘the Apostate’, who
converted from Christianity to paganism: “he who desires to be a Cynic despises all the usages and opinions
of men, and turns his mind first of all to himself and the god. For him gold is not gold or sand sand, if one
enquire into their value with a view to exchanging them, and leave it to him to rate them at their proper
worth: for he knows that both of them are but earth. And the fact that one is scarcer and the other easier to
obtain he thinks is merely the result of the vanity and ignorance of mankind” (Orationes 7, ‘To the Cynic
Heracleios’, 225D; Julian 1913, 127; see also his Epistulae 63).
 THE EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT 703

supplies many of our needs.5 But why do I make this comparison between gold and
iron? These ordinary stones are much more necessary than precious stones. From gems
could come nothing useful, but from these stones we can build houses, walls, and cities.
You show me what benefit could come from precious stones; rather, show me what
harm could not come from them! (Ad illuminandos catechesis 2.40–41; Chrysostom
1963, 185)
In an earlier instruction, Chrysostom called gold nothing more than earth. The
same rhetorical device he uses in his other works: jewels are nothing else than earth
and ashes; gold and silver are but mud; dung is better than money.6
Chrysostom continues with a reflection on the adornment of women. Rather than
with pearls and gems, Christians should adorn themselves with piety and modesty. He
again compares gold, iron, and precious stones, this time to demonstrate that wealth
may be an obstacle to serving God. At another place, Chrysostom argues that wealth
and poverty are merely relative concepts:
God giveth all those things with liberality, which are more necessary than riches; such
for example, as the air, the water, the fire, the sun; all things of this kind. The rich man
is not able to say that he enjoys more of the sunbeams than the poor man; he is not
able to say that he breathes more plenteous air: but all these are offered alike to all. And
wherefore, one may say, is it the greater and more necessary blessings, and those which
maintain our life, that hath made common; but the smaller and less valuable (I speak of
money) are not thus common (De statuis homiliae 2.18; Chrysostom 1842, 46; cf.
Homiliae in epistulam I ad Corinthios 34.5).
The divine order of nature not only enables us to survive but also offers ample
opportunity to exercise virtue. Even an apparent evil as economic inequality in fact
opens the door for benevolence and almsgiving.

3.6. Augustine of Hippo (354–430)

We finally turn to an influential analysis of a contemporary of Chrysostom, Aurelius
Augustinus. In a discussion of fallen angels in the voluminous City of God, the bishop
of Hippo distinguishes between three scales of valuation that can be applied to the cre-
ated world. First, there exists an absolute hierarchy according to the order of nature.
This scale of natural perfection ranks living things higher than non-living ones, the
sentient higher than the non-sentient, the intelligent higher than those without intelli-
gence, and the immortal higher than the mortal. For example, animals are superior to
trees, men to cattle, and angels to men. The second scale is a variable one. It is not
based on man’s reason, but on his wants and passions. Evaluating things in terms of
utility and considering them as a means to an end, this standard is frequently in
conflict with the first. In daily life, people often prefer certain non-sentient and non-
intelligent things to sentient and intelligent ones.
For, who would not rather have food in his house than mice, money than fleas? This is
less astonishing when we recall that, in spite of the great dignity of human nature, the

5
Pliny, Naturalis historia 34.39 and 43 reports that of all metals iron is the best and most abundant.
6
E.g. Homiliae in Matthaeum 23.12, 39.4, 89.4; Homiliae in epistulam ad Philippenses 10; Homiliae in epistulam
I ad Timotheum 7, 17; Ad populum Antiochenum de statuis 2.21.
704 J. HENGSTMENGEL

price for a horse is often more than that for a slave and the price for a jewel more than
that for a maid (De civitate Dei 11.16; Augustine 1952, 212).
Third, Augustine speaks of a scale of justice, according to which for example good
men outweigh fallen angels.
The distinction suggested by Augustine between an objective natural value and a vari-
able economic value of things was very influential (Dempsey 1935, 475; De Roover 1957,
124–125; Viner 1978, 53–61; Langholm 1979, 67, 87; Farber 2006: 40–42). Direct quota-
tions or paraphrases of the text occur in nearly every scholastic treatment of the subject.
Even though Augustine does not present a value paradox in the strict sense of the word,
from an economic point of view the passage is more interesting than what may have been
its source: Cicero’s On Duties (2.11). In Cicero’s Stoic scala naturae, things are grouped in
inanimate things (gold and silver), animate things that do not share in reason (horses, cat-
tle, and bees), and those who do (men and gods). They all contribute, one way or another,
to the preservation and needs of human life. It becomes a paradox when Augustine’s
observes that this reasonable order of nature is overthrown if people in their valuations
are “driven by want or drawn by passion” (De civitate Dei 11.16). Only then a horse is
preferred over a slave and a jewel over a maid. This practice, the Church Father argues in
one of his sermons, is unfitting for Christians who ought to love their fellows as them-
selves (De sermone Domini in monte 1.19.59).

4. Conclusions
The paradox of value or water-diamonds paradox was not an invention of Adam Smith
or one of his early-modern predecessors. Recognised as early as Plato, Aristotle,
Vitruvius, and Sextus Empiricus, it was part of ancient economic thought. Though they
were not economists in the modern sense, the Greeks and Romans knew perfectly well
that usefulness or utility is not the only determinant of exchange value, as the paradox
makes us believe. They understood that the exchange value of goods is based on supply
and demand, or scarcity and use, and differs from other standards of value. Their think-
ing founded what came to be known as the Aristotelian tradition in the theory of value
(Kauder 1953), which emphasised the subjective character of utility. All the same, the
Greek-Roman philosophers did not use the paradox to elucidate the relationship between
utility, scarcity, and price. In Plato, the idea that scarce goods have a high price is used as
a weapon against the sophists. Aristotle, in turn, introduces the paradox to show that
there are two principles of valuation, one based on a good’s utility and another on its dif-
ficulty of acquisition. While noting a relationship between utility, scarcity, and dearness,
Vitruvius mainly praises Divine Providence for providing an abundance of necessities. In
Sextus Empiricus, finally, the paradox shows that value and price increase with scarcity,
proving that frequency of occurrence determines our judgement of things.
Compared to their philosophical predecessors, the early Christian theologians did not
take the analysis of the paradox of value much further. They too stressed the role of scar-
city and, as suggested by Clement and Eusebius, the difficulty of acquisition in a good’s
market value. Tertullian came closest to formulating an economic law when writing,
“when a thing is abundant, it is always cheap” (semper abundantia contumeliosa in seme-
tipsam est, literally: “abundance is always contumelious toward itself”). As we have seen, in
 THE EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT 705

the teaching of the Fathers of the Church, the paradox is often implicit and served a mor-
alising purpose. They instructed Christians not to pursue luxury goods but to contend
themselves with what is really necessary in life. Meanwhile the patristic writers put greater
emphasis on the demand side of an economy. They stressed that the market value of
things not only depends on their supply but also on what St Augustine calls necessitas indi-
gentis (want of necessities) and voluptas cupientis (desire for pleasure).
It is in their analyses of subjective value and the underlying psychology that, economic-
ally speaking, the Church Fathers were at their best. Augustine and his predecessors were
well-aware that inherent properties do not determine a good’s economic value. In the
fourth-century bishop Maximus of Turin, we find the observation that “nature did not
cause gold and silver to be precious, but human willing made it so” (Sermones 71.7:
aurum et argentum non pretiosum natura instituit, sed hominum voluntas effecit;
Maximus of Turin 1989, 175). As Chrysostom has it, “the price of material things does
not come from their nature but from our estimate of them” (materiae pretium non ex
nature est, sed ex opinione nostra, in its Latinised form). He repeatedly explained that it is
not characteristics or qualities that determine a good’s utility. For example, when some-
one is thirsty, drinking sweet wine does not give more satisfaction than ordinary water.
Also in case of eating when hungry or sleeping when tired, “it is not so much the nature
of the exercise as the pressure of necessity that constitutes the pleasure” (De Anna 5).
Economic value or market value, in short, is subjective. Avarice, a vice central to many
early-Christian sermons and homilies, only enhances it. In the words of Peter
Chrysologus, the fifth-century Bishop of Ravenna, avarice buries man’s soul in the earth,
from which depths comes gold (Sermones 22.3; 29.1). Vice versa, high prices also fuel the
greed for goods. According to Tertullian’s second law, “concupiscence becomes propor-
tionably greater as it has set a higher value upon the thing which it has eagerly desired”
(tanto maior fit concupiscentia quanto magno fecit quod concupiit).
Comprehensive histories of the theory of value (Sewall 1901; Kaulla 1906; Kauder
1965) usually ignore the Church Fathers. They start from Aristotle, Plato, and the
Romans and then quickly jump to the scholastics. And understandably so, for early-
Christian ideas of value and price were neither original nor very influential. The Church
Fathers added little to what was known to Aristotle and his contemporaries, and apart
from Augustine’s scales of valuation and echoes of Tertullian in Thomas More (Wilson
1982) left no traces in the history of the theory of value. Nevertheless, this article has
shown that they were familiar with the classic water-diamond paradox, and in this context
produced some rudimentary economic ideas as to the subjectivity of value. To borrow the
words of De Roover (1957, 128) about the later medieval scholastics, “they did not com-
pletely solve the paradox of value, but they were on the right track”.

Acknowledgements
The author is grateful for the helpful comments offered by two anonymous referees of this journal.

Disclosure statement
No potential conflict of interest was reported by the author.
706 J. HENGSTMENGEL

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