Aristotle on money
Joseph Schumpeter (1994 :63) considered Aristotle’s treatment of money in Politics I, 8-10, to be ‘the basis of the bulk of all analytical work in the field of money’.1 Schumpeter was among Aristotle’s shrewdest economic commentators and in some ways the most critically hostile, yet he regarded the analysis as penetrating and precocious. But it is perhaps more penetrating than he thought, and more deeply and interestingly flawed. The analysis is ethical as well as economic, and these two aspects are in a tension which leads Aristotle to attribute two natures to money, that of a means and that of an end. His official position is that it has only one of these natures, that of a means of exchange, and he ignores the other without giving a reason. Modern condescension should not be precipitate, however, because the tension is not one that can be avoided easily from what might be thought of as the high vantage point of modern economic thinking about money, which is just as deeply divided and in just the same way.