The theory of the division of labor in classical political economy: An Aristotelian critique

I use the theory of the division of labor as a case-study in the logic of social explanation and to test the explanatory power of a new Aristotelian model for social theory. The classical political economists from Adam Smith to Karl Marx argue that the divisions of labor is both efficient and natural. I claim that this explanation suffers from a two-fold reductionism: the moral dimension of the division of labor is reduced to technical efficiency; and the customary and stipulated dimensions of the division of labor are reduced to nature. This reductionism collapses two important Aristotelian distinctions: that between moral reason (phronesis) and technical reason (techne); and that between nature (physis), custom (ethos), and deliberate stipulation (logos). I revise these concepts in the light of modern natural, social and philosophical sciences into a framework for social theory: I show that, in human conduct, technical reason always presupposes moral reason; and I show that every social institution is the joint product of nature, custom, and stipulation: just as custom presupposes nature, so stipulation presupposes custom. I then use this framework to criticize Aristotle as well as classical political economy. By transcending the positivist dichotomy of ends and means, I restore moral reason to supremacy over technique. By transcending the Sophistic dichotomy between nature and convention, I restore custom to its rightful place at the center of social theory.