http://www.jstor.orgAristotle and Economic AnalysisAuthor(s): M.
I. FinleySource: Past and Present, No. 47, (May, 1970), pp.
3-25Published by: Oxford University Press on behalf of The Past and
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[email protected] ECONOMICANALYSIS* FOR
THEARGUMENTOFTHISPAPER ITISESSENTIALTODISTINGUISH, no matter how
crudely, between economic analysis and theobserva- tionor
description of specific economic activities, and between both and
aconcept of"the economy" (with which onlythefinal section
willbeconcerned).By"economicanalysiss',wroteJoseph Schumpeter, "I
mean . . . the intellectual efforts that men have made inorder
tounderstandeconomic phenomena or, which comes tothe same thing, .
. . the analytic or scientific aspects of economic thought".
Andlater, drawing onasuggestion ofGerhard Colm's,headded: "economic
analysis deals withthequestions howpeoplebehave at
anytimeandwhattheeconomiceffectsaretheyproducebyso behaving;
economic sociology deals with the question how they came tobehave
astheydo''.1 Whether oneiswhollysatisfied withSchumpeter's
definitions or not,2 they will serve our present purposes.To
illustratethe difference between analysis and observation, Iquote
themost familiar ancient text on the division of labour, written by
Xenophon before the middle ofthefourth century B.C.Thecontext -and
thisshould 1lot be ignoredisthesuperiority ofthemeals provided
inthePersian palace with its staff of kitchen specialists. That
thisshould be the case [Xenophon explains] isnotremarkable.For just
as the various trades are most highly developed in the large
cities, in the same way the food at the palace ispreparedina far
superior manner.In small towns thesame man makes couches, doors,
ploughs and tables, and often he even builds houses, and still he
is thankfulif only he can find enough work to support himself.And
it is impossible for a man of many trades to do all of them well.In
large cities, however, because many make demands on each trade, one
alone is enough to supporta man, and often less than one for
instance, one man makes shoes for men,another for women, there are
places even where one man earns a living just by mending shoes,
anotherby cutting them out, another just by sewing the uppers
together, while there is anotherwho performsnone of these
operationsbut assemblesthe parts.Of necessity he who pursuesa very
specializedtask will do it best. 3 * This essaywas preparedfor the
Festschriftfor ProfessorE. Ch. Welskopf on her seventieth birthday,
and will appearin Germantranslationin the yahrbuch
furWirtschaftsgeschichte.An earlierdraft was presentedto the Social
History Group in Oxford on 3 December I969.I have benefited from
the advice of a number of friends, A. Andrewes, F. H. Hahn, R. M.
Hartwell, G. E.R.Lloyd G. E. M. de Ste. Croix. ' J.Schumpeter,
History of EconomicAnalysis, ed. E.B.Schumpeter (New York,
I954),pp.I,2I. 2See the review by I. M. D.Little in Econ.Hist.
Rev., 2nd ser., viii (I955-6), pp.9I-8. 3Cyropaedia,8.2.5. 4 PAST
ANDPRESENT NUMBER 47 This text containsimportantevidencefor the
economichistorian- but not on divisionof labourfor which it is so
often cited.In the first place, Xenophonis interestedin
specializationof craftsrather than in divisionof labour.In the
secondplace,the virtuesof both are,in his mind,improvementof
quality,not increasein productivity. He says this explicitlyand it
is anywayimplicitin the context,the meals served atthePersian
court.NorisXenophon untypical: divisionof labouris not often
discussedby ancientwriters,but when it is, the interestis
regularlyin craftsmanship,in quality.4Oneneed only glanceat the
modelof the pin factoryat the beginningof Adam Smith's Wealthof
Nationsto appreciatethe leap takenby the latter, from observationto
genuineeconomicanalysis. Even
asobservation,furthermore,Xenophon'sremarksdonot meritthe
accoladesthey havereceived.As Schumpeterpointedout,
economics"constitutesa particularlydifficultcase"in any study of
the originsof a "science"because common-sense knowledge goes inthis
field much farther relatively tosuch scientificknowledgeas we have
been able to achieve,than does common-sense knowledge inalmost any
other field.Thelayman's knowledge that rich harvestsare
associatedwith low prices of foodstuffsor that division of labour
increases the efficiency of the productive process are obviously
prescientific and it is absurdto point to such statementsin old
writingsas if they embodied discoveries.5 The key for
antiquityrests not with Xenophonor Plato but with
Aristotle.Itisagreedon all sides that only Aristotleofferedthe
rudimentsof analysis;hencehistoriesof economicdoctrineregularly
featurehim at the beginning."The essentialdifference"between Plato
and Aristotlein this respect, writes Schumpeter,"is that an
analycicintention,whichmaybe said (in a sense)to havebeen absent
fromPlato'smind,was the primemoverof Aristotle's. This is clear
fromthe logicalstructureof his arguments".6 Aristotlethen
becomesdoublytroublesome. In the firstplace,his supposedeffortsat
economicanalysiswere fragmentary,wholly out of scale with his
monumentalcontributionsto physics,metaphysics, 4See Eric
Roll,AHistory of EconomicThought,3rd edn.(London, I954), pp. 27-8.
5Op.cit., p.9.Even ifone grants Xenophon the insight that division
of labour is a consequence of greater demand, the observationled to
no analysis. Toquote Schumpeter again: "Classicalscholars as well
as economists . . . are prone to fall into the errorof hailing as a
discoveryeverythingthat suggestslater developments,and of
forgettingthat, in economicsas elsewhere,most statements
offundamentalfacts acquire importanceonly by the
superstructuresthey are made tobear and are commonplace
intheabsence ofsuch superstructures" (Pe 54)* 6Ibid.) p. 57.Cf.
e.g. Roll, op. cit., pp.3I-5. ARISTOTLEANDECONOMIC ANALYSIS 5
logic,meteorology, biology, political science, rhetoric, aesthetics
and ethics.Second, and still more puzzling, his efforts produced
nothing better than "decorous, pedestrian, slightly mediocre, and
more than slightly pompous common sense". 7This judgement of
Schumpeter's, shared by many, is so wide of the universal judgement
of Aristotle's other work, that it demands a serious explanation.
Thereare only twosections inthewhole Aristotelian corpus that
permit systematic consideration, oneinBook voftheNicomachean
Ethics,theother inBook Iof thePolitics.8Inboth,the"economic
analysis" isonlyasub-sectionwithinaninquiry intoother,more
essential subject-matters.Insufficient attention tothecontexts has
been responsible for much misconception of what Aristotle is
talkirlg about. The subject of the fifth book of the Ethicsis
justice.Aristotle first differexltiatesuniversal from particular
justice, and thenproceeds to a systematic analysis of the
latter.It,too, is of two kinds: distribu- ... t1ve and correct1ve.
Distributive(dianemetikos)justiceisaconcernwhenhonours, goods, or
other "possessions" of the community are to be distributed.
Herejustice isthesame as"equality", butequality understood as a
geometricalproportion (we say "progression"),not as an arithmetical
one.9Thedistribution ofequal shares among unequal persons, or
ofunequalsharesamongequalpersons,wouldbeunjust.The principle of
distributive justice is therefore to balance the share with
theworthoftheperson.Allareagreedonthis,Aristotleadds,
althoughalldonotagreeonthestandard ofvalue(axia)tobe employed where
the polisitself isconcerned."Fordemocrats itis
thestatusoffreedom,forsomeoligarchs wealth,forothersgood
birth,foraristocrats itisexcellence(arete)''.l ?ThatAristotle
70p.cit.,P57- 8Thefirst part of Book IIofthe
pseudo-AristotelianOeconomicais without value on any issue relevant
to the present discussion, as I have indicatedbriefly in a review
of the Bude edition to be published in the ClassicalReview.(See
also note SI.) 9 This difficultidea of a mathematicalformulationof
equalityand justice was Pythagorean, probably
firstintroducedbyArchytasofTarentumatthe beginning ofthe fourth
century B.C.,and then popularized byPlato (first in Gorgias,
so8A).SeeF.D.Harvey, "TwoKindsofEquality", Classica et Mediaevalia,
xxvi (I965),pp.IOI-46,withcorrigendain vol. xxvii (I966),pp.
99-IOO,whorightly stresses thepointthat themathematical formulation
is employed solely to argue against democracy.(My translationsfrom
the Ethics are based on H. Rackham'sin the Loeb ClassicalLibrary,
I926.) l oEthics, II 3 I a24-29* 6 PAST ANDPRESENT NUMBER 47
himself favoured thelast-named isnot important for us,and indeed
hedoes not himself make the point in this particularcontext, which
isconcerned only toexplain anddefend theprinciple ofgeometric
proportion.11 Incorrective justice(diorthotikos,literally
"straightening out"), however, the issue is not one of
distributionfrom a pool, but of direct, private relations between
individuals in which it may be necessary to "straighten out" a
situation, torectify an injustice by removing the (unjust) gain
andrestoring theloss.Heretherelative nature and worth of the
persons is irrelevant, "for it makes no differencewhether a good
man has defrauded a bad man or a bad one a good one,nor whether it
is a good or bad man that has committed adultery; the law
looksonlyatthenatureofthedamage,treatingthepartiesas equa1....xs12
Corrective justice also has two subdivisions, depending on whether
the"transactions"(synallagmata)arevoluntaryorinvoluntary. Among
theformer Aristotle listssales, loans, pledges,deposits and leases;
among the latter, theft, adultery, poisoning, procuring, assault,
robbery, murder.l3There is a fundamental difiiculty for us here in
trying tocomprehend Aristotle's categoriesand no translation of
synallagmataby a single English word eases itbut I need not enter
into the controversy except to make one point relevant to some of
the discussionthatwillfollow.UnderwhatconditionsdidAristotle
envisageaninjustice,anunjustgain,inavoluntary transaction,
especially ina sale?Theanswer is,Ithink, beyond dispute that he had
inmind fraud or breach of contract, but not an "unjust" price.
Anagreement over theprice waspart oftheagreement or"trans- action"
itself, and there could beno subsequent claim by thebuyer ofunjust
gain merely because oftheprice.AsJoachim says, "the law gives the
better bargaineradeia(security)".l4Itis necessary to
insistonthis(leaving aside theunfortunate injection ofbargaining)
because efforts have been made to drag this section of the
Ethicsinto 11Itisprobable that for Aristotle distributive justice
isalso operative ina variety ofprivate associations,permanent or
temporary: see H.H.Joachim's commentary (Oxford,
I9SI),pp.I38-40,though Iseeneither necessity nor warrant for
hisattempt tolink distributive justice withtheprivate lawsuit known
as diadikczsia. 2 Ethics, I I 3 I b32-32a6. 1 3 Ethics, II 3 I a3-9
* 140p.Cit.,p.I37,withspecific reference toII32bII-I6.Iagree with
A. R. W. Harrison, "Aristotle'sNicomacheanEthics, Book V, and the
Law of Athens", 1.Hell. Stud., 1xxvii (I957),pp.42-7,against
Joachim (see also note II),that "Aristotle'streatmentof justice in
the Ethicsshows only a very general one might perhaps say an
academic, interest in the actual legal institutions of the Athens
of his day". ARISTOTLEANDECONOMIC ANALYSIS 7 the argument about
economic analysis, for example bySoudek, who offers as an
illustration ofcorrective justice thehypothetical case of
ahouse-buyer whobrought suitonaclaim that hehad beenover- charged
and whowas awarded a refund equal tohalf thedifference
betweentheseller'spriceandhisownproposed"justprice''.l5 Nothingin
this or any other text of Aristotle warrantsthis, nor does anything
we know about Greek legal practice.Both argue decisively
theotherway.Commenting onthefamouspassage intheIliad, "But then
Zeus son ofCronus took from Glaucus his wits, in that he exchanged
golden armour withDiomedessonofTydeusfor oneof bronze, theworth
ofahundred oxenfor theworth ofnineoxen") Aristotle says tersely,
"one who gives away what is his own cannot be said tosuffer
injustice''.lfiWeshall meet"what ishisown"again ... na surprlslng
context. Having completed his analysis of the two kinds of
particularjustice,
Aristotleabruptlylaunchesintoadigression,l7introducingit
polemically: "Theviewisheldbysomethatjustice isreciprocity
(antipeponthos)withoutanyqualification, bythePythagoreans for
example".Antipeponthosis a term that has a technical mathematical
sense, but it also has a general sense which, in this context,
amounts to the lex talionis,an eye for an eye. 18On the
contrary,replies Aristotle, "in many cases reciprocity isat
variance with justice", since it"does
notcoincideeitherwithdistributiveorwithcorrectivejustice". However,
in the "interchange of services" the Pythagorean definition of
justice isappropriate, provided the reciprocity "is on the basisof
proportion, noton thebasisof equality". "Interchange ofservices"
isRackham's inadequate translation of
Aristotle'sevzabsKotvcovlalsratsa>aKTlKabS,losingtheforceof the
wordkoinonia,andIamcompelledtodigress.Koinoniaisa
centralconceptinAristotle'sEthics andPolitics.Itsrangeof meanings
extends from the polis itself, thehighest form ofkoinonia,
totemporary associations suchas sailors onavoyage,soldiers ina
campaign, or theparties inan exchange of goods.Itis a "natural"
form ofassociation-manisby nature a zoon koinonikonas well as azoon
oEkonomikon(household-being)andazoon politikon(polis- 15J. Soudek,
"Aristotle'sTheory of Exchange: an Inquiry into the Origin of
Economic Analysis", Proc. Amer. Philos. Soc.,
xcvi(I952),pp.45-75,atpp. 5I-2. 16Iliad, 6.234-6;Ethics, I I 36bg-I
3, 17Ethics, II32b2I-33b29. 18Cf.Magna Mor.,II94a29ff.;seeJoachim,
op. cit.,pp.I47-8,and the commentaryby R. A. Gauthierand J. Y.
Jolif (the best commentaryin so far as close reading ofthe text
isconcerned), vol.ii(Louvain and Paris, IgSg), pp. 372-3- 8PAST
ANDPRESENT NUMBER 47 being).Several conditions are requisite
ifthere istobeagenuine koinonia:(I)themembers
mustbefreemen;(2)theymusthave a common purpose, major or minor,
temporary or of long duration; (3) theymust have something in
common, share something, such as place, goods,cult,meals, desire
foragoodlife,burdens, suffering; (4)there must be philia
(conventionally butinadequately translated "friendship"), mutuality
inother words, andto dikaion,whichfor simplicitywemay
reduceto"fairness" intheirmutualrelations. Obviously no single word
will render the spectrum of koinoniai. At
thehigherlevels,"community"isusuallysuitable,atthelower
perhaps"association"provided the elements of fairness,mutualityand
common purpose are kept in mind. Thepoint tomydigression
istounderscore theovertones ofthe section in the Ethicson exchange:
koinoniais as integral to the analysis astheactofexchanging.Edouard
Willcaughttherightnuance when hereplaced such translations of
theopening phrase as "inter- change ofservices" bya paraphrase,
"exchange relations within the framework ofthecommunity"(les
relationsd'echangequi ont poar cadrele communaute).19Lest there be
any doubt, Aristotle himself promptly dispels it.Immediately
following thesentences Iquoted before digressing, hegoesontosay
that the polis itselfdepends on proportional reciprocity.Ifmen
cannot requite evil with evil, good with good, there can be no
sharing."That is why we set up a shrine totheCharites [Graces]
inapublic place, toremind men tomake a return.For that is integral
to grace, since it is a duty not only to return a service done
one,butanother time totake theinitiative in doing a service
oneself".20 Andatlonglastwecometoourproblem.Theexampleof
proportional requital whichfollowsistheexchange ofahousefor
shoes.2lHow is that to be accomplished?Thereisno koinoniain this
context between two doctors, but only between, say, a doctor and a
farmer, who are notequals butwhomust somehow beequalized. "As a
builder is to a shoemaker,so must so many pairs of shoes be to
ahouse".Thelattermustbe"equalizedsomehow'',bysome
commonmeasure,andthatisneed(chreia),22nowcommonly 19E. Will, "De
l'aspect ethique des origines grecques de la monnaie", Rev. Hist.,
CCXii(I954),pp.209-3I,at p. 2I5note I. 20Ethics, II33a35-
21Aristotle shifts from example to example and I have followed him,
despite the superficialinconsistencythat entails. 22Ihave refrained
from thecommon rendition, "demand", toavoid the subconscious
injection ofthe modern economic concept- soalso Soudek, op
cit.,p.60.Thesemantic cluster around chreia inGreek writers,
including Aristotle, includes "use", "advantage","service", taking
us even further from "demand". ARISTOTLEANDECONOMIC ANALYSIS 9
expressed in money."There will therefore be reciprocity when (the
products) have been equalized, so that as farmer is to shoemaker,so
is theshoemaker's product to that of the farmer".In that way,
tilere will be no excess but "each will have his own".If one party
has no needtherewillbenoexchange,andagainmoneycomestothe rescue: it
permits a delayed exchange.23 There follows a short repetitive
section and the digression on "this outwork ofparticular justice"
ends.24Aristotle hasbeenthinking aloud, so to speak, as he often
does in his writings as they have come down to us, about a
particularnuance or a tangential question that is troublesome; he
isindulging in ahighly abstract exercise, analogous
tothepassagesinthePolitics ontheapplicationofgeometric
proportiontopublicaffairs;here,asoften,hisreflectionsare introduced
by a polemical statement, and soon dropped as he returns tohismain
theme, his systematic analysis.Exchange of goods does not again
appear in the Ethicsexcept in two or three casual remarks. Thatthis
isnotoneof Aristotle's more transparent discussions is painfully
apparent, andwemustlookatwhatthemostimportant moderncommentators
havemadeofit.Joachim, exceptionally, accepted that Aristotle really
meant it when he wrote "as a builder is to a shoemaker", and he
promptly added, "How exactly the values of the producers are to be
determined, and what the ratio between them
canmean,is,Imustconfess,intheendunintelligible tome".25 Gauthier
and Jolif make an ingenious effort to get round the difficulty by
assertingthat the builder and shoemakerare meant to be considered
equal "as persons" but different (only) in their products.However,
IcannotbelievethatAristotlewentoutofhiswaytoinsiston
proportionalreciprocity as necessary for justice in this one field,
only to conclude that one pair of ratios does not in fact exist,
and to make thatpointillthemostambiguous waypossible.26MaxSalomon
23EthiCS,II33b6-I2.InthePolitics,I257a3Iff.,Aristotle explains that
delayed exchange became necessarywhen needs were satisfiedby
imports from foreign sources,and "all the naturallynecessarythings
were not easily portable". (My translationsfrom the Politics are
based on Ernest Barker's,Oxford, I946.) 24 The phrase quoted is
that of Harrison,Op. Cit.,p.45. 95 0p.Cit.,pI50- 26
Op,Cit.,p.377.They cite in support MznaMor.,II94a7-25,but those
lines are only a simplifiedand more confusing statementof the
argumentin the Ethics.For future reference,it should be noted that
MagnaMor. says explicitly that"Plato also seems toemploy
proportionaljustice inhisRepublic".St. George Stock, in the
Oxfordtranslation(I9I5),cites Rep., 36gD, but it requires
clairvoyanceto see the Magna Mor. referencethere, since Plato is
not discussing at all howthe exchange between builder and
shoemakeris to be equated, and soon goes on to introducethe
traderas a middleman(significantlyabsent in the Aristotelian
account).Ingeneral, however, thissectionofBook IIofthe
(cont.onp.10) IOPAST ANDPRESENT NUMBER 47 achieves the same result
by more ruthless methods: the mathematics, he says, is a mere
"interpolation", a "marginalnote, so tospeak, for
listenersinterestedinmathematics",andthewholeconceptof
reciprocalproportion must be omitted, leaving Aristotle to say
simply that goods are exchanged accordingto their values, and
nothing more. That then leads Salomon to a series of grotesque
translationsin order to get out of the text what is not there.27
Salomon's drasticsurgerywas not mere wilful caprice.Economics,
hewrites,cannotbeturnedinto"akindofwergeld systemona mercantile
base".28Thefirst principle ofamarket economy is,of course,
indifferenceto the personsof the buyer and seller: that is what
troubles most commentatorson Aristotle.Soudek therefore suggests
that "as a builder is to a shoemaker"must be read "as the skill of
the builder is to the skill of the shoemaker".29From there it is no
great step toSchumpeter's interpretation.Thekey passage in the
Ethics, he writes, "I interpret like this: 'As the farmer'slabour
compareswith theshoemaker's labour, so the product of the farmer
compares with theproductoftheshoemaker'.Atleast,Icannotgetanyother
sense out of this passage.IfIam right, then Aristotle was groping
forsomelabour-cost theoryofprice whichhewas unable tostate
explicitly".30AfewpageslaterSchumpeterreferstothe"just
price"oftheartisan's "labour", andstilllater heasserts thatthe
"relevant part" ofAquinas's "argument onjustprice . . . isstrictly
Aristotelian and should be interpreted exactly as we have
interpreted
Aristotle's''.31However,Aristotledoesnotoncerefertolabour costs or
costs of production.The medieval theologians were the first to
introduce this consideration into the discussion, as the foundation
(nore26cont.) Republicwas obviouslyinfluentialon Aristotle
(includingthe stress on need and the explanationof money).For what
it is worth, in reply to the commentary by Gauthierand Jolif cited
above noteI85I note that Plato says (370A-B), to
justifyspecializationof crafts,that "no two people are born
exactlyalike.There are innate differerlceswhich fitthemfordifferent
occupations" (Cornford's translation,Oxford, I94I). 27Max Salomon,
Der Begriff der Gerechtigheitbei Aristoteles(Leiden, I937), in a
lengthy appendix,"Der Begriffdes Tauschgeschaftesbei
Aristoteles".My quotation appears on p.I6I.Salomon isnot alone
indismissing the mathe- matics asirrelevant: seemostrecently
W.F.R.Hardie, Aristotle'sEthical Theory(Oxford, I968),pp.I98-20I.
28Op.cit., p.I46.
39Soudek,op.cit.,pp.45-6,60.Thesamesuggestionismadeby J.J.Spengler,
"Aristotle onEconomic Imputation andRelated Matters",
SouthernEcon.1.,xxi (I955),pp.37I-89. 300pcit.,p.60noteI 31Ibid.,
pp.64,93.Hardie, op. cit., p.I96, simply asserts without serious
discussion that "the comparativevalues of producers must in
Aristotle's view here mean thecomparativevalues oftheir work done
inthe same time" (my italics). ARISTOTLEANDECONOMIC ANALYSISII for
theirdoctrineof justprice,andtheirallegedAristotelianismin this
respectrestedon the ambiguityof the Latintranslationsof Aristotle
madeavailableto them in the middleof the thirteenthcentury.32
Anyway,none ofthese interpretationsofwhat Aristotle"really meant"
answersthequestion, How are prices, just or otherwise,
establishedinthemarket? More specifically,how are needs, on
whichAristotleinsistsas basic,equatedwith the partiesor theirskills
ortheirlabour ortheirlabour costs,whichever oneprefers?
ObviouslyAristotledoes not say, or at least does not say clearly,
otherwisethe moderneffortsto discoverhis concealedmeaningwould
allbeunnecessary. ForKarl Marx theanswer isthat, though
Aristotlewas the first to identify the centralproblemof exchange
value,he then admitsdefeat"andgives up the furtheranalysisof the
formof value"whenhe concedes33that 'Citis impossiblefor thingsso
differentto becomecommensurableinrealitys.34Soudekrepeatshis
erroron correctivejustice,alreadydiscussed,then graspsat the word
"bargain"whichW. D. Rossfalselyinjectsinto his translationin one
passage(and Rackhaminseveral),and concludesthat the price is
determined,and justicesatisfied,by mutualbargaininguntil agree-
ment is reached.35 That isnot a very good way to describewhat 32
See Soudek, op. cit., pp. 64-5- J. W. Baldwin, TheMedieval
Theoriesof the 3rustPrice (Trans. Amer. Philos. Soc.,new ser.,
xlix,part 4[I959]),pp.62 74-5;E.Genzmer, "Die antiken Grundlagen
der Lehre vom gerechten Preis und der laesio enormis", Z.
f.auslandischesu. internat.Privatrecht,Sonderheft
Xi(I937),pp.25-64,at pp27-8@ 3 3Ethics, I I 33bI 8-20. 34Marx,
Capital, transl. S. Moore and E. Aveling, i (Chicago, I906),p.68.
Cf. Roll, Op.Cit.vp.35;"Whatbegins with the promise of being a
theory of value ends up with a mere statementof the
accountingfunction of money". 30Op.Cit.,pp.6I-4.Both Ross (Oxford,
I925)and Rackhamhave "bargain" inII33aI2,Rackham also
inII64a2o;II64a3o.(Itis worth noting another
mistranslationbyRackham, atII33bI:"Hence theproper thingisforall
commodities tohavetheirpricesfixed".WhatAristotleactually saysis
"Thereforeit is necessaryfor everythingto be expressedin money,
tetimesthai".) Furthermore,Icannot accept Soudek's use of passages
from the beginning of Book IX,continuing the analysis offriendship,
as relevant.There Aristotle's examplesare drawnfrom promisesto pay
for services by musicians, doctorsand teachers of philosophy,
"exchanges"in a sense perhaps, but in a sense that is differentin
qualityfrom those Book v is concernedwith.That should be clear from
a number of passages.In the opening statement (II63b32-3s),
Aristotle distinguishes "dissimilar friendships"
(whichheisabouttodiscuss)from exchange relations among
craftsmen,and he soon says explicitly that the value
ofaphilosopher'sservices"isnotmeasurableinmoney"(II64b3-4).
Protagoras, hewrites,acceptedwhateverfeehispupilsthoughtproper
(II64a24-26),and Aristotle thinks that isonthewhole theright
procedure (II64b6-8), though he cannot refrainfrom the sneer
(II64a3o-32) that Sophists had better take their paymentin
advance.All this seems to me to belong to the spirit of gift and
counter-gift, of the Charites.There must be reciprocityand
proportionhere, too, as in all human relations, but Isee no other
link tothe digression on the exchange between builder and
shoemaker. I2 PAST ANDPRESENT NUMBER 47 happensin a
realmarketsituation,andSoudeksuggeststhatAristotle's trouble was
that "he was preoccupiedwith the isolated exchange
betweenindividualsand not with the exchangeof goods by many
sellersandbuyerscompetingwith eachother"36-astrangecriticism of a
discussionthatexplicitlysets out to lookat exchanges"withinthe
firameworkof the community". Schumpetertakesthe
oppositeline.Startingfrom the erroneous idea that
Aristotle"condemned[monopoly]as 'unjust'" he went on to reasonin
this way: It is not farfetchedto equate, for Aristotle's purpose,
monopoly prices with prices that some individual or group
ofindividuals have settotheir own advantage.Prices that are given
to the individualand with which he cannot tamper, that is to say,
the competitiveprices that emerge in free marketunder
normalconditions,do not come within the ban.And there is nothing
strange in the conjecturethat Aristotle may harretaken normal
competitiveprices as standardsof commutativejustice or, more
precisely, that he was preparedto accept as 'sjust"any
transactionbetween individualsthat was carried out at
suchprices-whichisinfactwhatthescholastic doctors weretodo
explicitly.37 We need not discusswhetheror not it is
';farfetched"to conjecture that all this was in
Aristotle'smind,thoughnot expressedin his text; it surelytakesus
awaycompletelyfromthe starting-pointstatedin the introduction,with
its referencetoPythagoreanreciprocityand its consequentmathematics.
Schumpeterfurtherobservedthatthe analysiswas restrictedto the
artisan,while the "chieflyagrarianincome of the gentleman"was
ignored,the free labourer,