Aristotle’s view on exchange can be seen as part of the larger ancient Greek discourse on economics. Despite the fact that Greek philosophy did not explicitly come out in discussing particular economic theories; two aspects continually came up. The first was economics, referred to as “oikonomik”, which involved the search and use of wealth to satisfy personal needs. The other concept was chrematistics, which referred to the act of simply gathering wealth .
This is the same view that Aristotle held when it comes to discussing aspects of economics. He saw economics as part of household management and entirely necessary. He noted that the science of acquiring wealth, which he referred to as chrematistics, involved many activities ranging from beekeeping to usury. He pointed out that some form of chrematistics that delivered items necessary for comfortable living was natural and part of the process of managing the household . What made this sort of chrematistics noble is the fact that the number of items or wealth searched for was limited by the needs of the household.
Differentiating natural and unnatural exchanges
That form of understanding formed the basis of the differences in the types of exchanges that people were involved in. Natural exchange, according to Aristotle was characterized by barter trade between individuals, where items were exchanged in accordance with the needs that the two parties had. This form of exchange was deemed natural since it coincided with the nature of men of looking for the satisfaction of their needs. Unnatural exchange, on the other hand, was characterized by actions of gathering wealth that was not dictated by the needs the parties had. According to Aristotle, the factors that informed unnatural exchange were simply gathering of wealth and making profits as opposed to simply satisfying human needs. Here, he pointed at exchange practices such as retailing and selling of stocks .
Central to Aristotle’s distinction between natural and unnatural exchanges is the concept of the household in the polis. The two concepts, according to him, were the natural forms of association. In the polis, one obtained true wealth by having an accumulation of useful things, which are items that man used to satisfy needs. Households within the polis would naturally at certain times have a surplus of useful things. Natural exchange was, therefore, permissible in this case, to help in the re-distribution of goods . A clear distinction of natural and unnatural exchange can be seen here since the former allows people to act within their nature. The latter, however, goes beyond the human nature of satisfying the needs of a household, to involve the gathering of excess wealth, which is not necessary for life within the polis.
Another clear distinction between the two forms of exchange is the fact that natural exchange occurs within naturally set limits within a natural relationship setting. While natural exchange, therefore, has the natural end of acquiring items when needed, unnatural exchange does not harbor the same natural end. The goals of parties within unnatural exchange are selfish and therefore not natural. Another distinction between the two types of exchange is the form of mutual benefits that the natural exchange bears. According to Aristotle, natural exchange contributes to the constant development of humanity . This is because the exchange is done based on friendship and the concern for the ability of all households to be sufficient. In unnatural exchanges, however, humanity is not developed since the goal of this form of association is based neither on friendship nor the concern for the self-sufficiency of other households.
Concerns regarding unnatural exchange
Another area of concern from Aristotle’s perspective is the fact that the polis will be rendered unstable due to the processes involved in unnatural exchange. While natural exchange allowed the society to take care of surpluses and deficiencies, unnatural exchange is not concerned with that. This, therefore, implies that the society embracing unnatural exchange runs the risk of being unstable, with households with deficiencies not engaging in a complimentary relationship with households with surpluses. Another point of concern for Aristotle regarding unnatural exchange is the value of the items that both parties gain when the exchange is done using money . He argues that since money was not naturally set to be exchanged, people may ultimately get items at the value they approve, a value that may not be enough. He argues that an item obtained in finality is better compared to the money obtained for the sake of the same item.
Another point of concern that Aristotle has regarding unnatural exchange is the skewed use of money I this form of exchange. He argues that it is naturally acceptable to use money as a medium of exchange, but this acceptability is challenged once money becomes the wealth or the store of value. He argues that within a polis, it is legal to have currency since it was a representation of what people want. Aristotle, however, notes that unnatural exchange compromises this, since it treats money as the beginning and the end of exchange, with no limits to the ends of the exchange. He, therefore, foresees a problem where the ease in exchange using money is used for other purposes not tied to direct household needs . This, therefore, leads to the occurrence of corruption, which ultimately compromises the quality of life within the polis.
Another concern that Aristotle has regarding unnatural exchange can be seen through the sharp criticism of retail trade. He sees this form of business as going against the natural realm of exchange being a means to obtain something needed. Retail trade is concerned with the obtaining of sums of money through profits, as opposed to gaining useful items for the satisfaction of household needs. The problem with this kind of setup is that the restraint on human desire will be removed. People will no longer be concerned with simply satisfying their needs, but will now engage in activities that give them more wealth. Aristotle views a society that has people with an unlimited desire for wealth unacceptable. In addition, another point of concern is that activities such as retail trade lead to accumulation of wealth, which is not true. He is against the notion of development not guided by true wealth since it gradually corrupts the essence of humanity . Aristotle’s displeasure with unnatural exchange is seen in his sharp criticism of usury, which he views as the most unnatural of all unnatural means of exchange. He views the aspect of using money to gain more money as the ultimate form of compromise to the natural setup of exchange.
Relevance of Aristotle’s arguments in the modern day society
Despite the validity of the arguments that Aristotle makes against unnatural exchange, I have the view that the arguments are wrong and that what he advocates for cannot be actualized in the modern day society. First, his concept of a just exchange that heavily borrows from distributive justice cannot be applied in the modern day society. Aristotle’s argument is that just exchange involves the equalization of items used in trade. He offers the example of a shoemaker who exchanges items with an owner of a house. According to Aristotle, the exchange occurs when the right value of each item that could be exchanged for the other is established. This presents a huge problem in the modern day society, since the valuation of items is currently done using monetary value, and the valuation cannot be arrived at by only considering the physical items. The equalization concept that Aristotle therefore, fights for appears to be wrong in the modern setup.
Another aspect that shows the inability to actualize Aristotle’s arguments in the modern day society is the form of criticism he levels against commercial activity. In his view, an exchange should be directed towards the needs that individuals have. When an exchange is made for any other intention or goal, the parties involved are viewed to be acting immorally. People in every form of commercial activity that aims at making profits are not justified in Aristotle’s perspective.
In the modern day age, however, commercial activity is an integral part of the smooth operation of the society. It is through various forms of commercial activity that the varied needs of the people are met. By giving a blanket ban on all commercial activity, Aristotle fails to take into consideration that the merchants incur expenses either financially or otherwise. In the case of a store that provides people with food, there are the logistical costs that individuals coming to the store have to pay for. Through the store, customers are prevented from incurring higher costs in search of the products. The store takes advantage of economies of scale to minimize the costs of obtaining such foods from the farm. Aristotle’s view of considering all commercial activities as immoral is, therefore, wrong.
Another aspect that Aristotle heavily condemns is the aspect of usury, which he sees as the ultimate form of unnatural exchange. In the modern day society, however, banking is an essential aspect that is used by people to satisfy their needs. For example, people often go to banks to obtain loans to buy their means of production. After repaying the loans, individuals are left stable, with the ability to cater for their most essential needs. The criticism that Aristotle directs towards banking is wrong, especially in the modern day society. This is because the banks and the people who conduct business with the bank seem to be in a complementary relationship where one has a surplus supply of money while the other has a deficiency of finances.
In conclusion, Aristotle’s differentiation of natural and unnatural exchange reveals a particular dislike of the latter. He presents many concerns about an unnatural exchange, and despite the fact that the arguments are valid from an ethical perspective; they are inapplicable in the modern day society.
Works Cited
Day, Richard B. and Joseph Masciulli. Globalization and Political Ethics. BRILL, 2007.
Long, Roderick. ""Realism and abstraction in economics: Aristotle and Mises versus Friedman."." Quarterly Journal of Austrian Economics 9.3 (2006): 3-23.
Ward, Ann. ""Justice as Economics in Aristotle's Nicomachean Ethics."." Canadian Political Science Review 4.1 (2010): 1-11.
