WEALTH
Since Aristotle had a better apprehension of the theory of value than other Greek thinkers, we may expect him also to define more clearly the concept of wealth. In the Politics, he names the following attributes of genuine (ἀληθινός) wealth (πλοῦτος): necessary to life; useful to persons associated in a household or a state; capable of accumulation (θησαυρισμός); limited in extent (οὐκ ἄπειρος).[[543]] According to Mill,[[544]] from the “economic” standpoint, wealth is “all useful and agreeable things” of a “material nature” possessing “exchange value”; and, to have exchange value, they must be “capable of accumulation.”
In comparing these two definitions, it should be recognized at the outset that Aristotle’s term “genuine” does not mean “truly economic,” as it might in Mill, but rather “legitimate wealth” as distinguished from that gained from false finance (χρηματιστική);[[545]] also that his “necessary to life” and “limited in extent” are not used in the economic but in the moral sense, as opposed to luxury and extreme interest in money-making. Mill’s “all useful and agreeable things” presents a marked contrast to this in spirit. Aristotle’s “useful” means “what subserves the final good” (πρὸς ἀγαθὴν ζωήν), while Mill’s means “things that give sensations of comfort or pleasure.” Thus Aristotle’s wealth is necessarily limited, while Mill’s is unlimited, since, as Barker observes, “only an infinity of wealth can satisfy an infinity of need.”[[546]] It will be seen from the following discussion, however, that Aristotle includes more than “necessary things” in his category of economic wealth. He does not specify “material things,” as does Mill, but it seems probable that this is his meaning.[[547]] In all the passages where he enumerates the different kinds of wealth, only material things are included, except slaves, who are counted as mere tools.[[548]] One of these passages specifically excludes intellectual wealth by defining property as a “separable instrument.”[[549]] The use of the term for value (ἀξία) probably implies the same limitation.[[550]] Though Aristotle does not mention exchange value specifically, it is clearly implied in his definition. “Things useful for the association of a state” and things “capable of accumulation” must have exchange value, thus excluding illimitable utilities such as air and light.[[551]] His use of κτῆμα, “possession,” and his recognition of cost of production and economic demand as the main factors in determining value,[[552]] are further evidence of this. Moreover, as seen above, in the Ethics, he clearly makes exchange value an attribute of all wealth.[[553]]
From our comparison of the two definitions, then, it is evident that, though Aristotle is antithetical to Mill in putting the ethical interest first, and though his definition is not so scientifically specific, yet the two agree in recognizing the qualities of materiality, exchange value, and possibility of accumulation as necessary attributes of wealth. We shall see below, also, that the Greek philosopher was the forerunner of the orthodox English economists in criticizing the common confusion of money with wealth.[[554]]
But, despite his grasp of the leading principles in the economics of wealth, he takes the same negative moral attitude toward wealth as does Plato, though his hostility is also directed primarily against the spirit that commercializes life and makes unlimited wealth the summum bonum. To his mind, this idea that wealth is the sum of all goods is almost the necessary accompaniment of the possession of superfluous wealth, but it is especially characteristic of the new-rich (νεωστὶ κεκτημένοις).[[555]] Yet Aristotle is too practical to be ascetic. He realizes that leisure (σχολή) is necessary for moral development and for good citizenship, and that this cannot be enjoyed except on a basis of sufficient wealth. A fair competency is therefore desirable for the best life,[[556]] for men should live not only temperately, but liberally.[[557]] Poverty produces civic strife and crime.[[558]] Wealth in the absolute sense (ἁπλῶς) is always good, though it may not always be fitted to a certain individual, or be property used by him.[[559]] Each, therefore, should choose what is good for himself, and use it accordingly.[[560]] All this sounds saner than the subjective notion of wealth taught by Plato. But right here is the secret of the difficulty as Aristotle sees it. Just because all external wealth is good in the absolute sense, the popular error has arisen that it is the final cause (αἰτία) of all happiness,[[561]] whereas the actual relation of wealth to happiness is the same as that of the lyre to the tune. There can be no music without the intervention of the musician.[[562]] External goods are therefore not of primary importance to life. The goods of the soul should be placed first,[[563]] for the virtues of life are not gained and preserved by material wealth, but vice versa,[[564]] and the men of high character and intelligence are most happy, even though their wealth is moderate.[[565]] The common attitude of the money-maker that wealth is unlimited is contrary to nature.[[566]] Genuine wealth cannot be unlimited,[[567]] since external goods are strictly defined by their utility for a certain thing. Excessive wealth thus either harms the owner, or is, at least, useless to him.[[568]] Neither can wealth be rightly made the summum bonum, for it is really not an end at all, but only a collection of means to an end (ὀργάνων πλῆθος).[[569]] The inevitable result of making it the end and measure of all is moral degeneration.[[570]] If the highest interests of life are to be preserved, it must always be kept subservient. First things must be placed first, both by the individual[[571]] and by the state.[[572]]
PRODUCTION
It is often asserted that Aristotle denied the very existence of a problem of production.[[573]] This statement has been based primarily on certain passages in the Politics.[[574]] These passages, however, are not a denial of the importance of production. Their purport is merely to show that the chief aim of life is not to produce or to provide wealth, but to use it for the advancement of life’s highest interest. From this standpoint, both acquisition (κτητική) and production (ποιητική) are subordinate arts.[[575]] So far is Aristotle from giving no place to production, that a later chapter of the Politics is devoted to the consideration of the scheme of supply, including production.[[576]] To be sure, he does not lay much emphasis on genuine production in his enumeration. Industry is barely mentioned, while agriculture is discussed in detail. His “free-holder” is a consumer of the gifts of nature, rather than a real producer.[[577]] He classifies the truly productive employments that work for themselves (αὐτόφυτον) as those of the nomad, the farmer, the brigand, the fisherman, and the hunter, and makes those that live by barter (ἁλλαγῆς) or trade (καπηλείας) parasitic.[[578]]
In another passage, finance, strictly defined (οἰκειατάτη), is limited to all forms of agriculture, and even the hired labor (μισθαρνία) of industry is included in unnatural finance.[[579]] Aristotle has thus often been compared to the physiocrats, who distinguished between creative and parasitic classes of workers, upheld the “natural” order as the ideal, and eulogized agriculture and the “extractive” industries as the only productive ones. As Souchon[[580]] has observed, however, the resemblance is only superficial. Yet the fact that he fails to see that exchange is productive of a time and place value, and the fact that he includes hired labor, skilled and unskilled, among the unnatural activities, are sufficient evidence that he had only a superficial grasp of the principles of production.[[581]] But the frequent assertion that he includes brigandage and war among the productive arts is unwarranted, for he classifies them only among the acquisitive means.[[582]]
Aristotle almost outdoes Plato in his subordination of all production to ethics, though he keeps their respective aims more distinct. According to him, the productive arts are not ends in themselves. They are means to the supreme end of the moral life, whose first interest is not in production, but in right action.[[583]] As seen in our discussion of Plato, such a doctrine is not fruitful, economically. If interpreted too rigidly, it stifles commerce and industry. Yet, at bottom, it holds a great truth which modern economists are emphasizing—the fact that wealth and production alike must be subordinated to the general individual and social good. Moreover, the philosopher should not be interpreted in too hard-and-fast a manner. Barker is extreme in his statement that the economic theory of Aristotle is a mere treatise on “the ethics of family life” and that “the fundamental characteristic of his idea of production is a reactionary archaism, which abolishes all the machinery of civilization in favor of the self-supporting farm and a modicum of barter.”[[584]] Bonar’s assertion is also unwarranted, that “Aristotle thinks it beneath the dignity” of his discourse to give the practical details of agriculture and industry “more than a cursory notice.”[[585]] Such details were not germane to the plan of his work, and would certainly be considered out of place in a modern general text on economics. Aristotle’s economic doctrine, as a whole, is certainly far broader in scope than the family, and, while based upon ethics, is something more than an ethical treatise. As seen above, he recognizes the necessity of a moderate acquisition of wealth, both for the prosperous state and for the virtuous man, and demands only that the human interest be put first.[[586]]
Agriculture.—Of the factors that enter into production, Aristotle is, like the other Socratics, most interested in natural resources. He emphasizes especially the agricultural life. To his mind, it is the only true foundation of “natural finance,” since the financial means should be provided in nature herself.[[587]] Natural finance (οἰκειατάτη) is made to include only a proper knowledge of the care of land, cattle, bees, fowl, and other natural resources.[[588]] It is natural, since it does not earn at the expense of others, as do retail trade and other methods of false finance. Aristotle also reveals his interest in agriculture by giving a bibliography of the subject. He names Charetides of Paros, Apollodorus of Lemnos, “and others on other branches”—a hint that many such works on practical economics may be lost to us.[[589]] However, his interest, even in this primary industry, is not of a practical nature, like that of Xenophon. He relegates it to the non-citizen classes, along with commerce and the mechanical arts.[[590]]