Question

Aristotle made a distinction between ‘natural’ and ‘unnatural’ exchange and worried about social impacts of the latter. A. Discuss the distinction he made between types of exchange.

B. Explain why Aristotle was worried about unnatural exchange (be specific) and whether or not his concerns are relevant to today’s society (give examples that demonstrate his argument is correct, wrong, or both).

C. How were ‘just prices’ established in the Feudal era and how do they relate to Aristotle’s understanding of market exchange?

D. Does his distinction (and worries) between these types of exchange play any roll in modern society?

Answer 1

A) DISTINCTION HE MADE BETWEEN TYPES OF EXCHANGE:

The distinction is exchange of goods and services is a basic nature of economics.

Anybody to survive would need this exchange to take place, since at any point of time people do not possess in abundance.

B) ARISTOTLE WAS WORRIED ABOUT UNNATURAL EXCHANGE:

Aristotle is classified into two types

They are:

1) Natural Exchange

2) Unnatural Exchange

Natural Exchange:

The natural exchange is refers to the exchange the in which individuals go about acquiring the things they need.

It mean those goods that are necessary for an individual.

On the other hand Exchange just for the joy of acquiring to make excessive profits was termed as unnatural exchange.

The basic component here made was the act of acquiring involved satisfaction of needs or was done, to make excessive profit or joy. This was the basis for this distinction.

In the current market scenario, where in globalization is rapid not producing goods that are luxurious and are only produced because of this reason is invalid.

Governments in the recent times tax goods that are luxurious and not necessary products and use the available money, to be able to do greater public good than by supplying only average items which are termed to have natural exchange.

Therefore, in the modern times I believe the theory to be flawed.

Example:-

To term an exchange of a phone might be considered as unnatural since it is not necessary for some, but for others it might be.

Further the definition of such exchange cannot be exhaustive in nature.

It would be subject to whether the product is actually needed or not. This again is a wrong argument to take.

C) ARISTOTLE'S UNDERSTANDING OF MARKET EXCHANGE:

The concept of just prices was that of earning profits through interest rates to be unjust.

Only those prices should be set which were fair in the overall transaction.

The relationship among just prices and Aristotle’s theory is such that the transaction would eliminate any unnatural exchange.

Pricing would only be set on fair transactions and no one would be allowed to charge extra income or interest income on a product.