Aristotle
(c.384-322 B.C.)
Aristotle, rather than Plato, among the Greeks is who we should look for influence on later thought. The medieval theologians used to refer to Aristotle simply as "the Philosopher." He was appealed to by most of the writers on moral philosophy from Thomas Aquinas downward.
Some think it was the way that Aristotle analyzed economic ideas -- rather so much what he contributed in ideas per se, as his greatest contribution.
Property:
So it was not the institution of property, to Aristotle, that is evil – but the manner in which it is employed.
He did endorse slavery and included slaves as a form of property (and women as well).
Also was very concerned with household problems.
Two-Party
Exchange:
Equity considerations:
Isolated Exchange:
No reference to alterative market opportunities. No “going market price” – so the “fairness” of the exchange can only be determined by a disinterested third party – arbitrator or judge. Case by case basis.
The
Nature of Polity:
No conception of the ideal state.
Wealth and privilege were distributed by custom, tradition and government direction.
Distributive Justice:
Exchange is built upon the notion of reciprocity:.
Surplus:
But he had a sense of “equality” in the trade:
“If
then there is proportionate equality in the first instance, and retaliation or
reciprocity follow, the result of which we are speaking will be attained.
Otherwise the exchange will not be equal or permanent.”
What does he mean by equality?
Money
as an “equalizer”:
“Now proportionate return is secured by cross-conjunction. Let A be a builder, B a shoemaker, C a house, D a shoe. The builder, then, must get from the shoemaker the latter’s work, and must himself give him in return his own. If, then, first there is proportionate equality of goods, and then reciprocal action takes place, the result we mention will be effected. If not, the bargain is not equal, and does not hold; for there is nothing to prevent the work of the one being better than that of the other; they must therefore be equated . . . This is why all things that are exchanged must be somehow comparable. It is for this end that money has been introduced, and it becomes in a sense an intermediate; for it measures all things, and therefore, the excess and the defect – how many shoes are equal to a house or to a given amount of food. The number of shoes exchanged for a house must therefore correspond to the ratio of guilder to shoemaker. For if this be not so, there will be no exchange and no intercourse. And this proportion will not be effected unless the goods are somehow equal. All goods must therefore be measured by some one thing, as we said before. Now this unit is in truth demand, which holds all things together . . .; but money has become by convention a sort of representative of demand; and this is why it has the name ‘money’ – because it exists not by nature but by law and it is in our power to change it and make it useless. There will, then, be reciprocity when the terms have been equated so that as farmer is to shoemaker, the amount of the shoemaker’s work is to that of the farmer’s work for which it exchanges” (Nichomachean Ethics, 1133 5-30)
“Money therefore is like a measure that equates things, by making them
commensurable (measurable by a common standard or unit); for
association would be impossible without
exchange;
exchange without
equality,
and equality without commensurability.
Commensurability:
“This
standard is in truth the demand for mutual services, which holds society
together; for if people had no wants, or their wants were dissimilar (? My
question mark), there would be either no exchange, or it would not be the same
as it is now.”
Demand (I want what you have and vice versa) brings us together
↓
↓
and makes things Commensurable (money gives the goods a commonality that equates things)
↓
Equality
↓
Exchange
↓
Association
And Aristotle does mention that the equating is through time –
“Money
is serviceable with a view to future exchange.”
The value of money is not always the same, but “tends to have a more constant value than anything else.”
Again – is this in some objective sense or a more abstract meaning?
But
according to many historians of thought, Aristotle did establish the following
propositions:
1. Trade:
2. Surplus:
3. Mutual advantage:
4. Judges:
Also
on value:
1. incremental comparisons
2. scarcity and value (use value)
On
Money and Interest:
1.
2.
3.
He also noted that money was something “intrinsically useful and easily applicable to the purposes of life.”
On
Making Money (in the reading):
He distinguishes between household management and money-making.
The former “is given by nature” and the later is “gained by experience and art.”
One has a limit, the other does not.
Money becomes, not a means to an end, but an end itself.
It’s
as if he has “considered the art of money-making” in the following
manner:
1. Retailing –
a.
b.
c.
d.
e.
2. Intermediate –
a.
b.
3. Household Management –
a.
b.
c.
d.
With
regard to Usury: “wherefore of all modes of making money this is the most
unnatural.”
And therefore should under the watchful eye of government – the state.
More
Notes on the Reading: