Aristotle, the Nichomachean Ethics

My post here will focus on the sections of the Nichomachean Ethics that are most related to my research interests. Deep into my exam reading I realized that there is also a small section of the Politics that I should read as well, but that can wait until after the exam.

The Nichomachean Ethics contains two sections that are of specific interest to me: the Golden Mean and the section Justice. A larger issue of discussion in regards to medieval economic thought centers around the issue of arithmetic versus geometric price in economic exchanges. Arithmetic price is a set price that a commodity has regardless of market conditions. In a way, this is something like a platonic approach to price, that all commodities have a "true" price that simply has to be discovered to determine if an exchange was just. Geometric price, however, is proportional, changing depending on the specific market conditions. Geometric price takes supply and demand into consideration, as well as other factors revolving around need that can affect price in exchange. 

At this point, it is beneficial to note that The Nichomachean Ethics is a collection of notes from Aristotle's students rather than a composed text from Aristotle himself. I point this out because the Nichomachean Ethics provides support for both arithmetic and geometric price. 

In the section on the Golden Mean, Aristotle states what is ideal is that which is equidistant between disparity and surplus. However, this ideal point, or the Golden Mean as it is often termed, is largely dependent upon the specific factors of the situation. The example Aristotle brings up is food, suggesting that an athlete focused on running should ideally take in an amount of food that fuels running but does not encourage weight gain as this would inhibit is effectiveness. The wrestler, on the other hand, should have a much larger diet to support muscle and mass gain, but does not lead to fat growth that would make his efforts inefficient. The Golden Mean is thus the ideal balance between intake and output, and is applied to many contexts by aristotelian scholastics. 

In the section on Justice, however, the focus shifts to determining what is just and unjust. To that end, Aristotle plots out lines of just price for a judge to determine whether an exchange has been conducted justly. Oddly, this pushes towards proportionality for the entire exchange, by making the gains of both the buyer and seller equalized, but this moves away from geometric proportions in that the equality is determined from an arithmetic basis, not taking into consideration divergent levels of need. A starving man, for example, may be all too willing to pay a substantially inflated price for bread, but according to Aristotle's model of just price such an exchange would be unjust and require a judge to alter the conditions of the exchange. 

The section on justice also discusses the nature of money itself, how it is intended to operate as the medium and measure of goods in exchange. For Aristotle, money itself is worthless and only contains value when those who use it ascribe value to it. Instead, the function of money is to provide a medium for efficient exchange between parties that produce commodities or labor that are not otherwise equitable. For example, a shoemaker could not, necessarily, buy a house with his shoes directly. After all, how many shoes equal a house? Instead, the shoemaker is able to exchange his shoes for a certain amount of money, and a certain amount of money will purchase a house. Thus, money is the medium through which a shoemaker can exchange his labor for other commodities. 

These models are altered a great deal by later economic thinkers, but the core of medieval economic thought goes back to Aristotle.