Moreover, contrary to Barker’s assertion, demand, as an element of price, is prominent throughout this discussion of Aristotle. He objects, however, to allowing the effect of demand to overcome unduly the cost of production, thus causing inequality and injustice. According to his idea, each receives the equivalent in value of what he gives, in the sense that it is a resultant of the proportionate influence of both cost and need.[730] We may, nevertheless, observe an excellent example of inconsistency in the fact that, despite his insistence upon just exchange, he appears to treat monopoly as a legitimate principle of finance for both men and states,[731] though his intention in the passage may have been to discuss actual conditions, rather than to idealize.
Naturally, the philosopher shows no concern for a tax on imports as a means of building up the industry and commerce of his state, since he is especially desirous of limiting both. However, he is not blind to the advantages of export and import trade for a nation,[732] but would regulate them with an ethical, rather than an economic purpose.[733] His doctrine of exchange as a form of production has been discussed above,[734] and will be touched upon further in the following pages. His general criticism of what he terms “false finance” or “chrematistik” (χρηματιστική) remains for more extended treatment.
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.
