We have seen that he recognizes the necessity of a limited form of exchange, free from the purpose of gain, and considers such trading to be natural and in accord with that interdependence which nature demands.[[735]] He calls it the very bond of the social organization,[[736]] and even considers international commerce to be necessary for the prosperity of a state.[[737]] We have also seen that he goes so far as to advise the rich in a democracy to give the poor a start in business,[[738]] but that exchange, in its prevalent form, is to him a method of cheatery, in which one gains what the other loses.[[739]]
On the basis of this prejudice, he builds his argument for domestic economy (οἰκονομική) as opposed to false finance.[[740]] We will therefore consider his entire theory of this relation at this point, for the term “chrematistik,” though more inclusive than exchange (μεταβλητική), has trade in either goods or money (καπηλική) as its predominating element, and the two terms are often used by him as synonyms. He employs the word χρηματιστική in several significations—usually of unnatural finance, or the art of money-making by exchange of goods or money; sometimes as synonymous with κτητική, the general term for the entire business of acquisition, including both natural and unnatural finance;[[741]] again, of the natural finance, which is a part of domestic economy. His confusion results partly from his futile attempt to separate landed property from general industry and commerce.
His main contention is that there is a vital distinction between domestic economy, whether of householder (οἰκονόμος) or statesman, and the art of acquisition or finance, as usually pursued. The primary function of the art of finance is to provide, while that of domestic economy is to use what is provided.[[742]] There are, however, many methods of acquisition (κτητική; χρηματιστική), some of which truly belong to the sphere of domestic economy.[[743]] The provision of all that is furnished by nature herself, as necessary to human existence, then, if not already at hand (ὑπάρχειν), belongs properly to domestic economy.[[744]] It both uses and provides genuine wealth, such as is limited in amount (οὐκ ἄπειρος) yet sufficient for independence (αὐτάρκεια) and the good life.[[745]] But the use of such wealth is its chief business.[[746]] The other kind of acquisition, which is unlimited, or chrematistik, is contrary to nature, and is not in the province of domestic economy.[[747]] This unnatural finance, since it deals chiefly in the exchange of money and other commodities, may be termed retail trade (καπηλική).[[748]] Though itself false, it is a logical outgrowth (κατὰ λόγον) of the true form of exchange that is limited to actual needs[[749]] as a result of the invention of money.[[750]] But the real reason for its pursuit is to satisfy an evil and unlimited desire for material things.[[751]] It produces money merely through the exchange of money (δι1α χρημάτων μεταβολῆς),[##] and its beginning and end is unlimited currency.[[752]]
This false form of acquisition is often confused with necessary exchange, because both deal with money.[[753]] Their aims, however, are quite diverse. The latter treats the accumulation of money (αὔξησις) as a means, while the former treats it as the supreme end of life.[[754]] In fine, then, Aristotle teaches that necessary chrematistik has to do with the supply and use of life’s necessities, is natural (κατὰ φύσιν or οἰκειοτάτη) and limited,[[755]] its prime function being the proper disposal of products.[[756]] It is an honorable pursuit,[[757]] dependent chiefly upon fruits and animals,[[758]] and involves a practical knowledge of stock (κτηνή), farming, bee-culture, trees, fish, and fowl.[[759]] The false finance, on the other hand, is unnatural, dishonorable, and enriches at the expense of another.[[760]] Its chief business is commerce (ἐμπορία), including sea-trade (ναυκληρία), inland trade (φορτηγία), and shop-trade, (παράστασις).[[761]] It also comprises usury (τοκισμός) and hired labor, both skilled and unskilled (μισθαρνία ἡ μὲν τῶν βαναύσων τέχνων ἡ δὲ ἀτεχνῶν).[[762]]
Aristotle also distinguishes a third type of finance (χρηματιστική) which shares in the nature of both those above described. It deals with natural resources and their products, but with things which, though useful, are not fruits (ἀκάρπιμα), such as wood-cutting (ὑλοτομία) and mining in all its branches (μεταλλευτική).[[763]] The meaning may be best apprehended if, with Ashley,[[764]] we observe that οἰκονομική is characterized, not only by direct acquisition of nature’s products, but also by a personal use of the same, while the unnatural finance has neither of these qualities. The medium kind, then, is like the former, in that it involves direct acquisition of natural resources, but like the latter, in that it does not acquire for directly personal use, but for exchange. It consists, therefore, not so much in the arts themselves, as in the exchange that is based on them.
In the discussion of the so-called false finance, Aristotle thus reveals a markedly hostile attitude to any extensive development of exchange. The middleman is considered to be a parasite and necessarily degenerate by the very fact of his business.[[765]] As seen above, his criticism was doubtless directed chiefly against the mean and dishonest spirit in the actual retail trade and money-loaning of his day.[[766]] Yet here also, just as in the Ethics passage above discussed, his prejudice blinds him to the fact that exchangers may be real producers, and that, after all, even the alleged false finance is not unlimited, but that it is distinctly bounded by economic demand.[[767]] Still worse, he includes hired labor of every kind under unlimited acquisition, merely because it has some of the other qualities of that type of economy, though it certainly does not tend to unlimited enrichment even as much as agriculture.[[768]] However, he should be given credit of being a forerunner of the modern humanitarian economy, which insists that the final goal of all economics should be proper consumption, and that acquisition must be relegated to its true place as a means, the supreme end being human welfare.[[769]]
POPULATION
Aristotle exhibits an interest in the problem of population in relation to subsistence in his criticism of Plato for limiting the amount of property and making it indivisible, while failing to provide against a too high birth-rate.[[770]] He states the principle that, if property is to be limited, there must be a corresponding limitation on the increase of population,[[771]] and that the let-alone policy must be followed by increased poverty.[[772]] He therefore criticizes the Spartan law, for encouraging the largest possible families.[[773]] It is evident, however, that, as in the case of Plato, his interest in the problem is prompted chiefly by a moral and political motive. It arises merely from his desire to limit individual acquisition, in a small state, artificially constructed, and is to him in no sense a question of world food-supply.[[774]]
DISTRIBUTION
In the Ethics passage discussed above,[[775]] Aristotle approaches a scientific theory of distribution. He observes that just distribution will be a mean between two extremes of unfairness.[[776]] Unlike some moderns, however, he realizes that this will not mean equal shares for all. There must be the same ratio between the persons, or services, and the things.[[777]] In the “mutual exchange of services,” the law must be proportional requital.[[778]] In other words, each should receive an equivalent to what he contributes.[[779]] Distribution must thus proceed according to a certain standard of worth or desert (κατ᾽ ἀξίαν τινά).[[780]] If the individuals are unequal, their shares cannot be equal, and it is a prolific source of dispute, whenever equals receive unequal shares, or unequals receive equal.[[781]] On the other hand, Aristotle recognizes that it is a difficult matter to determine this standard, by which just distribution is to proceed.[[782]] At this point, again, he shows clearly that his paramount interest in the problem is not economic. He names four possible standards—freedom, wealth, noble birth, and general excellence—all of which are distinctly political in their reference.[[783]]