Croce passes from a positive statement of his aesthetic theory to a criticism of rival theories. He considers briefly, and in turn, the theories that hold art to be an imitation of nature, the representation of universals, the presentation of symbols or allegories, or the portrayal of various forms of life. All such theories commit the fallacy of mistaking the intellectual for the artistic, confusing the concept with the intuition. Once people concentrate on the type of subject matter, the mode of treatment, the style exhibited, they lose the aesthetic attitude; they have passed on to the scientific or intellectual activity, the exercise of logic, which is concerned with concepts, or universals. “The science of thought (Logic) is that of the concept,” he insists, “as that of fancy (Aesthetic) is the science of expression.”

As the criticism continues, the outlines of Croce’s philosophy of spirit become better defined. The theoretical activity of the spirit has two forms: the aesthetic and the logical; the practical activity also has two forms: the useful or economical, and the moral. “Economy is, as it were, the Aesthetic of practical life; Morality its Logic.” Economy is concerned, then, with the individual and his or her values (just as aesthetic is concerned with the individual intuition and its value), while morality is concerned with the general, with the values of the universal. Nevertheless, the economic will (the practical will) is not the egoistic will; it is possible to conduct oneself practically without being limited to a concern for self. To act morally, one must act economically; but the reverse is not necessarily the case. To conduct oneself economically is to adjust means to ends, but to conduct oneself morally is to adjust means to ideal ends, to what the spirit would desire were it rational, aiming at the noumenon, the spirit, of the self. Just as aesthetic is concerned with phenomena, and logic with noumena, so the economic is concerned with the phenomena and morality with the noumena, the ideal.