Aristotle would hate our modern economy

How Aristotle's rejection of "chrematistics", defense of leisure, and embrace of limited wealth redistribution conflict with modern capitalist society

Aristotle, from the British Library

Conservatives today love one ancient Greek thinker in particular - the venerable Aristotle, who was once such an authority he was called “The Philosopher” by Medieval thinkers in the Islamic and Catholic worlds alike. It’s not hard to see what they love about him. He is, in many ways, the intellectual progenitor of so much of Western civilization. Where his teacher Plato explored the concepts that structured Greek thinking, Aristotle created the foundations of zoology, economics, physics, astronomy, and other empirical sciences. Aristotle’s ideas on human nature, politics, and ethics would go on to offer a robust theoretical approach for organizing society that informed nearly 2,000 years of civilization.

There are many reasons to find Aristotle appealing for a conservative. He believes in an essential human nature which determines how human beings ought to live. This human nature is eternal and unchanging, meaning the social forms which are best for it do not drastically change. It is situated within a cosmos of creatures and elements with their own essential natures, and when all of those things can best pursue what coheres with their nature, then everything can flourish. This extends to society and politics. If political leaders, priests, and philosophers can sort out the correct traditions to habituate people within, Aristotle thinks, we can reliably create a society of happy, healthy people. If the most virtuous individuals in society are respected as wise men and leaders, then the less virtuous will have moral exemplars to look up to and follow. Such a vision is compatible with a conservative world view

In fact, it was the foundation of a certain kind of conservative worldview common to the Islamic, Jewish, and Catholic worlds for nearly two millennia (ironically, Aristotle would go on to be only more influential in the societies of Abrahamic religion than he ever was in his own Pagan world). This worldview adopted Aristotle’s ideas of natural law and virtue to situate the purpose of human life within God’s plan. God’s plan in turn tells us how human beings ought to live, and why men like Socrates, Moses, Samuel, Samson, Jesus, the Christian martyrs, Mohammad, and Ali were virtuous men who ought to be emulated (or why women like Mary were virtuous women who ought to be emulated). Aristotle’s view of gender relations is particularly appealing to the conservative, as he grants essential differences to men and women and divides their roles accordingly. Where Plato’s Republic speculates that women could live as philosophers and guardians alongside the men, Aristotle outlines a clear patriarchal family order where men manage the household, and women tend to domestic labor.

Thus, modern conservatives see Aristotle as a voice of tradition against a wave of social change and disruption. Against feminism, religious heterodoxy, secularism, atheism, sexual promiscuity, divorce, and cultural pluralism, Aristotle seems like a solid intellectual bulwark. Where the great geniuses of the political left like Mary Wollstonecraft, Jean-Jacques Rousseau, Karl Marx, Karl Kautsky, Vladimir Lenin, Simone Beauvoir, W.E.B. Du Bois, Franz Fanon, and others represent a threat to the social order, it seems like Aristotle seems like its greatest defender.

Not so fast. Yes, Aristotle is a believer in patriarchy, human nature, essential differences, tradition, and virtue. Yes, Aristotle mistrusts the perspective of the untrained and uncultivated rabble, and thinks the simple minded ought to follow their social betters. Yet Aristotle also rejects the very values and relations that underpin our modern global economy.

Chrematistics and “the good”

Aristotle is in some sense the founder of economic science. Yet in another important sense, his concept of economics differs radically from the modern one. He distinguishes between the science of the oikos (household management), which is the basis of economics, and the science of chrematistics, which is the science of using money to create more money. This distinction stands in radical opposition to our modern economic system.

Economics in his view is the science which a patriarch must master to preserve his wife, children, elders, servants, and slaves. The patriarch (generally a cultured and refined aristocrat but not a greedy oligarch) is the leader of the household, and must have some property. He must use this property to grow food (if it is agricultural land) or to engage in some socially valuable craft. Ideally, as the patriarch ought to focus his attention on cultivating his own virtue and mastering sciences, he must offload as much of the physical labor of the craft, art, or agriculture onto his servants, children, wife, and slaves. If the patriarch must do this labor himself due to poverty (perhaps he does not own slaves), he will struggle to adequately master virtue or the sciences. Yet even if the patriarch does offload this labor onto others, the ends of this labor is not his own profit or avarice but the flourishing of the members of his household. They are all owed as pleasant a life as possible, with as little unnecessary toil as possible. Thus, the patriarch does not subsume his household to his own avaricious ends and turn it into a profit-making machine.

The science of politics brings all the households together and manages their shared resources together within the confines of the polis. The polis, akin to (but in some ways distinct from) the modern state, provides a common body to ensure that the needs and interests of all the households can be unified in a common body. There are various forms of political management which Aristotle analyzes in his politics - monarchy, tyranny, oligarchy, aristocracy, mob democracy, and the constitutional republic. Monarchy, aristocracy, and constitutional republics all aim towards the pursuit of virtue across the various households that constitute it, while tyranny, oligarchy, and the democracy of mob rule all pursue vicious ends.

The sciences of economics and politics are important and, when done well, fundamentally good. Yet the science of chrematistics is different. This is the science of using money to make more money. The archetypal examples Aristotle uses are the science of merchant trade and usury. The merchant sails across the globe with their trade fleet or marches across the land with their caravans, buying cheap and selling dear. They use their money to buy the cheap goods in one town or city, then marches it over to another town or city to turn those goods into more money. The usurer, on the other hand, lends money out at interest and expects to receive more of it in return. Aristotle thinks that merchant trade is at least socially necessary to distribute goods to cities that cannot produce them, yet both of these sciences pose significant hazards by rewarding and cultivating avarice. This is an inevitability, as the natural end of money is obtaining necessary commodities, not obtaining more of itself. It can only turn into more of itself through something akin to a deeply unnatural dark magic, though Aristotle himself does not use such analogies. Thus, chrematistics has a tendency to breed vice, undermine and corrupt everything good, and cause the worst kinds of exploitation and immiseration.

The reason chrematistics is so harmful has to do with the nature of the good itself. For Aristotle, everything that is good is so because it is either good in and of itself, or a means to something that is good in and of itself. The final end (or the ultimate, intrinsic good we all pursue) is human flourishing — what Greek philosophers like Aristotle call eudaimoneia. Something is inherently good insofar as it directly contributes to human flourishing, and instrumentally good insofar as it helps achieve some other good.

Anything “good” stops being good insofar as it is in excess. This means that everything that is good is only good insofar as it exists in a natural harmony with everything else that is good, and this natural harmony is determined by the scope of natural needs. Water is good, but over-hydration is not. Cake is delicious and wine is enjoyable, but overindulging harms health. Spending time with cherished friends is lovely (friendship is one of the most noble goods for Aristotle), but one must let their friends sleep eventually. Thus, everything that is good is good because it realizes natural ends harmoniously alongside all the other goods.

Aristotle thinks that the limits to such goods can be understood by realizing the role they play alongside everything else. Food is good, and food can be obtained by hunting, so hunting is a good. Yet if we hunt so much that we drive deer into extinction and cannot hunt next year while wasting the uneaten meat this year, we have exceeded the good and are simply being viciously wasteful. A tall, roomy house is good, but if we build our house so tall that it collapses in on itself we have been viciously over-ambitious and showy. Honor is good, but if we pursue honor by starting unnecessary and risky wars, our honor has slipped into a kind of vicious aggression.

A part of effective household management is enriching it by meeting its naturally limited needs alongside in a way that is harmonious with the other households in our polis. As Aristotle argues in his Politics:

Of the art of acquisition then there is one kind which by nature is a part of the management of a household, in so far as the art of household management must either find ready to hand, or itself provide, such things necessary to life, and useful for the community of the family or state, as can be stored. They are the elements of true riches; for the amount of property which is needed for a good life is not unlimited, although Solon in one of his poems says that

"No bound to riches has been fixed for man. "

But there is a boundary fixed, just as there is in the other arts; for the instruments of any art are never unlimited, either in number or size, and riches may be defined as a number of instruments to be used in a household or in a state. And so we see that there is a natural art of acquisition which is practiced by managers of households and by statesmen, and what is the reason of this. (Book 1 chapter 8)

As we’ve seen, things that are good because they are a means to some other good are merely instrumentally good. An instrumental good might be something like a spoon, which helps you to accomplish the good task of eating but otherwise isn’t a particularly notable item. The limit of any instrumental good is the amount you need to realize your natural ends. You do not need an unlimited number of spoons to eat. Money is such an instrumental good — in fact, it is the instrumental good par excellance. There is no particular goodness to money except for its ability to be traded for some good or service which is, itself, good.

The first danger with chrematistics is that unlike other instrumental goods, there is no rational limit to how much money we can accumulate. Rather, it is something which can be accumulated ad infinitum. Since the goodness of money is merely in reference to other goods which it can buy, an since there is an unlimited array of hypothetical goods we could purchase, we can always accumulate more. The millionaire can be come the billionaire, and the billionaire in turn can become the trillionaire. In this way, money differs from everything else that is good. Thus, chrematistics teaches the science of unlimited accumulation.

The second danger of chrematistics is that it tends to reduce all other goods to itself. Since anything can be bought or sold, once money becomes the end in and of itself all other goods become a mere means to that end. This inverts the natural relationship between the instrumental good and intrinsic good, as the instrument becomes our primary ends and what is good in itself becomes a mere commodity. As Aristotle explains:

Hence some persons are led to believe that getting wealth is the object of household management, and the whole idea of their lives is that they ought either to increase their money without limit, or at any rate not to lose it. The origin of this disposition in men is that they are intent upon living only, and not upon living well; and, as their desires are unlimited they also desire that the means of gratifying them should be without limit. (Book I chapter 9)

For these two reasons, chrematistics tends to cultivate vice instead of virtue. It corrupts virtues and turns them into a mere means to achieve more wealth, the way we pay courageous men to guard the wealthy instead of protect society at large or the way we pay innovative chemists to create expensive drugs for pharmaceutical corporations instead of necessary medications for diseases common among the poor. Politics, too, becomes corrupted as oligarchs take over the state and turn it into a mere means to further the ends of the already-wealthy, instead of a body that deliberates on how to advance the needs of all citizens. Thus, chrematistics tends to corrupt the other sciences in a way that undermines human flourishing.

Surely, some chrematistics is useful simply in ensuring that merchants are able to spread goods across the world and in ensuring that loans can be made where necessary. Yet overall, Aristotle warns against our wisest committing their lives to this science.

There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most unnatural. (Book I chapter 9)

Importantly, modern economics is not the sensible, limited form of household management advanced by Aristotle. Rather, it is the unconstrained logic of chrematistics! What is the science of investment, capitalization, finance, management, and business in modern America except for the science of chrematistics? What is capital except for some lump of money I have invested in the hope that it becomes more money? What do I do with more money except turn it into even more money? Is there a limit to this growth in money in modern capitalist economics, or is continued growth rather the point of economic science in our modern era? As modern economic leftists sometimes say, this is the logic of the cancer cell. In his Capital, Marx states:

The simple circulation of commodities - selling in order to buy - is a means of carrying out a purpose unconnected with circulation, namely, the appropriation of use-values, the satisfaction of wants. The circulation of money as capital is, on the contrary, an end in itself, for the expansion of value takes place only within this constantly renewed movement. The circulation of capital has therefore no limits. (Capital Volume 1 Chatper 4)

Notably, this passage includes a footnote to Aristotle’s Politics and his explanation of the distinction between economics and chrematistics.¹

Ever since the renaissance and the modern move away from Aristotle, the science of “political economy” has increasingly taken the form of chrematistics while household management has fallen to the wayside. The works of the physiocrats, Adam Smith, Thomas Malthus, David Ricardo, John Keynes, and Milton Friedman were all grounded on the logic of capital accumulation. Our modern economy has even gone so far as to build this into corporate law, as corporate leaders are “ethically” bound to act in the interests of shareholders by becoming more valuable.

All this is to say, Aristotle would likely reject our current social, economic, and political model as unnatural and hostile to the development of virtue and human flourishing. While modern conservative voices (as well as liberals and moderates) would argue that free exchange and wealth accumulation rewards virtue, Aristotle would say it rather rewards vice among the wealthy and forces vice upon the poor. The rich will get richer through their avarice, while the poor must find any opportunity to get ahead, be it through crime or rebellion.

Redistribution

Aside from his critique of chrematistics, Aristotle defended some limited redistribution of wealth to ensure political stability and to ensure that every household had the resources to pursue the flourishing of all its members. Such wealth redistribution is most adequate to human nature, since it advances the flourishing of all members of the polis and because humans are by nature political animals, not egoistic avaricious animals.

Though he did think that communal property could play some role within the polis, Aristotle was no “communist” as he thought that private management of property ensured its efficient use. Aristotle was pragmatic and descriptive about this, and did not rule out communal property in principle, but he also saw private management as useful to limit disputes between households.² In his response to Plato’s Republic, he argues that group marriage and common ownership is likely to incite more conflict than people sensibly focusing on their own business.

Yet he did think it was good to redistribute property from the wealthier households to the poorer households, both to ward off demagogues who use the anger and resentment of the poor to seize power and to ensure that every household within the polis could flourish. After all, we have seen that Aristotle situated human flourishing within natural limits, meaning that deficiency and excess alike inhibited human wellbeing. Aristotle warns against equalization of property, but he does think that not redistributing money from the wealthiest only encourages their greed and avarice. Rather, Aristotle thinks that wealth should be proportionate to virtue, or excellence in one’s habits and practical wisdom. The appropriate distribution of wealth must be kept in mind if we hope to adequately cultivate virtue. If the poor are left too abject, they will become desperate, miserable, and degenerate. If the wealthy are allowed to accumulate ad infinitum, they will become vicious. If wealth is made equal, then the virtuous and vicious would receive the same benefit. All of these are bad, and so wealth must be distributed in accordance with the need to cultivate virtue among the citizens.

Labor

He would also argue our modern forms of automation make wealth accumulation and greed redundant. As he argues in the Politics, labor-saving machines would make slavery unncessary as their tasks could be done by machines. This presumably could also be extended to exploited labor, who would be free to spend more time on their education and betterment:

And so, in the arrangement of the family, a slave is a living possession, and property a number of such instruments; and the servant is himself an instrument which takes precedence of all other instruments. For if every instrument could accomplish its own work, obeying or anticipating the will of others, like the statues of Daedalus, or the tripods of Hephaestus, which, says the poet,

"of their own accord entered the assembly of the Gods; "

if, in like manner, the shuttle would weave and the plectrum touch the lyre without a hand to guide them, chief workmen would not want servants, nor masters slaves. (Book I chapter 4)

Thus, Aristotle would see the way our economic system squeezes the life out of workers as woefully misguided. Where modern businessmen see labor-saving machines as a means to extract more wealth from people, Aristotle sees it as a way to save more time, and as a way to extend leisure even to the plebians and slaves. Aristotle is no abolitionist. On the contrary, he saw some (but not all) forms of slavery as natural, as in his mind there are some people simply less prone to developing virtue who ought to be guided so that the aristocrats can enjoy leisure and cultivate their virtue (Aristotle’s concept of leisure was also quite different from ours, and involved less “relaxation” and more philosophical contemplation and virtuous action). Yet Aristotle thinks slavery, where it is natural, is only so because it realizes the good of the master and the slave alike:

We see then that there is some foundation for this difference of opinion, and that all are not either slaves by nature or freemen by nature, and also that there is in some cases a marked distinction between the two classes, rendering it expedient and right for the one to be slaves and the others to be masters: the one practicing obedience, the others exercising the authority and lordship which nature intended them to have. The abuse of this authority is injurious to both; for the interests of part and whole, of body and soul, are the same, and the slave is a part of the master, a living but separated part of his bodily frame. Hence, where the relation of master and slave between them is natural they are friends and have a common interest, but where it rests merely on law and force the reverse is true. (Book I chapter 6)

The modern system of labor exploitation is, in some ways, more inhumane and dehumanizing than even the “natural slavery” advanced by Aristotle, as for Aristtole the virtuous master sees the wellbeing and flourishing of his slave as an intrisic good (and this relationship is reciprocal). Aristotle’s “master” would not force his slave to do labor that is unnecessary except for the master’s own enrichment, but take evey opportunity to limit harmful labor for their slave. Whether we see this as overly idealized, it is apparent that the precarious, OSHA-violating, exhausingly long, and seriously underpaid labor market we see today falls short of even Aristotle’s standard of slavery!

In conclusion …

Thus, Aristotle would find our modern social, economic, and political order to be deeply unnatural. He would not side with the conservatives who treat wealth and virtue as, if not synonymous, then strongly correlated. On the contrary, he would see the conflation of economics and chrematistics to be offensive to human nature, and a deviation away from the values which we ought to live by. He would also reject the modern tendency to prioritize economic growth over the growth in free time and leisure. He was certainly no revolutionary or egalitarian. Yet he did not think avarice and egoism were ideal values upon which to organize society. We should thus be skeptical when we hear of modern people uncritically appeal to the wisdom of “the Philosopher” to defend the status quo.

1. “Aristotle opposes Œconomic to Chrematistic. He starts from the former. So far as it is the art of gaining a livelihood, it is limited to procuring those articles that are necessary to existence, and useful either to a household or the state. “True wealth (ὁ ἀληθινὸς πλοῦτος) consists of such values in use; for the quantity of possessions of this kind, capable of making life pleasant, is not unlimited. There is, however, a second mode of acquiring things, to which we may by preference and with correctness give the name of Chrematistic, and in this case there appear to be no limits to riches and possessions. Trade (ἡ καπηλικὴ is literally retail trade, and Aristotle takes this kind because in it values in use predominate) does not in its nature belong to Chrematistic, for here the exchange has reference only to what is necessary to themselves (the buyer or seller).” Therefore, as he goes on to show, the original form of trade was barter, but with the extension of the latter, there arose the necessity for money. On the discovery of money, barter of necessity developed into καπηλικὴ, into trading in commodities, and this again, in opposition to its original tendency, grew into Chrematistic, into the art of making money. Now Chrematistic is distinguishable from Œconomic in this way, that “in the case of Chrematistic circulation is the source of riches (ποιητικὴ χρημάτων ... διὰ χρημάτων μεταβολῆς). And it appears to revolve about money, for money is the beginning and end of this kind of exchange (τὸ γὰρ νόμισμα στοιχεῖον καὶ πέρας τῆς ἀλλαγῆς ἐστίν). Therefore also riches, such as Chrematistic strives for, are unlimited. Just as every art that is not a means to an end, but an end in itself, has no limit to its aims, because it seeks constantly to approach nearer and nearer to that end, while those arts that pursue means to an end, are not boundless, since the goal itself imposes a limit upon them, so with Chrematistic, there are no bounds to its aims, these aims being absolute wealth. Œconomic not Chrematistic has a limit ... the object of the former is something different from money, of the latter the augmentation of money. ... By confounding these two forms, which overlap each other, some people have been led to look upon the preservation and increase of money ad infinitum as the end and aim of Œconomic.” (Aristoteles, De Rep. edit. Bekker, lib. I, c. 8, 9. passim.)”

2. These are only some of the disadvantages which attend the community of property; the present arrangement, if improved as it might be by good customs and laws, would be far better, and would have the advantages of both systems. Property should be in a certain sense common, but, as a general rule, private; for, when everyone has a distinct interest, men will not complain of one another, and they will make more progress, because every one will be attending to his own business. (Aristotle, Politics, book 2 chapter 5)