Aristotle’s View on the Necessity and Danger of Money

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Aristotle’s view on the necessity and danger of money
Intro
Aristotle is widely regarded as the father of practical economic philosophy. His views on moral economic behavior, the economics of the house, the economics of trade, and his thoughts on markets can been read in Economics, Politics and The Politics and Economics of Aristotle. Within these readings we uncover Aristotle’s philosophic thoughts surrounding money. We learn that he considers money to be both dangerous and necessary in ancient Greece. But why is that? An answer will require looking at Aristotle’s writings and philosophy. Specifically we will look at money, or currency in ancient Greece, trade with retailers and between households, and what sort of exchanges Aristotle considers to be natural versus unnatural.

P1 Why is money necessary

Aristotle’s philosophic thoughts on money and economy still influence economists today. In the book The Politics and Economics of Aristotle, we learn that in order to live in a civilized society and purchase goods, a common currency must exist. Land and livestock are not easily traded or appraised without a common medium of exchange. Therefore money, often in the form of gold, can be used to purchase goods. Using gold, the value of any good can be determined and dissimilar items can be exchanged. The ability to trade goods, which are dissimilar, is important in all economies because buyers and sellers are selling different products. This convenient form of exchange is the cornerstone of a prosperous economy. Money is necessary for the common man to engage in commerce, and for the state to collect taxes. Aristotle sees no problem with money when used properly, meaning, when it is used to procure goods that are to be used in the h...

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...rd form of trade was retail. In this, a retailer would sell their products at the highest possible price in order to turn a profit. Profiteering was not respectable in ancient Greece and Aristotle thought it was a dangerous thing to engage in.

Why money can be dangerous

Usury is using money to make more money and Aristotle saw this as contemptible. When money is no longer used to allow for exchange, and instead is desired to increase ones wealth, then money is no longer being used properly. Here is where Aristotle thought money, although necessary could also be dangerous. If someone wants to aquire money, there is no natural limit to how much they can want. This want can be insatiable. Aristotle views money as something that is necessary for exchange economies, not for collection by merchants or retailers. These people may use money in a way it was not intended.

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