Free «Ethics of Enterprise and Exchange» Essay Paper

1. Aristotle created the concept of value in use and distinguished between the two principal types of value: exchange value and use value. The exchange value is determined by which and how many services or goods can be obtained in return for other services or goods. The use value is defined by the specific or intrinsic characteristics of a certain good. According to him, the use value is the factual utility of a particular service or good that depends upon its productiveness. The use value can vary and it is determined by the actual demand for the item among the individuals supposedly interested in attaining it. At some point, when the quantity of goods increases, their use value starts to steadily decline as the service or good is not longer uniquely valuable. If services or goods can be conspicuously but limitedly consumed, their use value will subsequently increase. In this case, the demand will vary depending on whether the use of a good is wide-ranging or narrow and limited; the circumstances of scarcity or rarity, therefore, impact its demand and exchange value. Aristotle states that if a good is rare, it is a greater and more prized good than the one, which is widespread, although the practical application of a common item can be of a greater importance than a unique one. For example, gold is less useful than iron, however, it is regarded as a “better good” because of its uniqueness. Consequently, the use value of gold is lower than that of iron, but its exchange value is markedly higher since gold is a rarer metal. His theory created the paradox, which still remains a part of economics. Thus, the exchange value is defined by the amount of services or goods that can be exchanged for other similar entities. The use value is, as stated above, qualified by the intrinsic characteristics of an article or operation.

2. Since the middle ages, economists have considered Aristotle as the father of economics. On the contrary, certain classical scholars claim that he engaged himself in only ethics, not economics. Aristotle had developed a coherent theory of money, wealth, exchange and value. However, this theory, as it is believed by the many, remains more an ethical issue. It was also supported by his metaphysics doctrine, and that fact basically made it impossible to assimilate it to any kind of economic thinking, and Neo-Classical economics in particular. According to Aristotle himself, economics and ethics cannot be practically reconciled to a full extent since they are the competitors on the same field. That is why Meikle criticized Aristotle’s economic views, arguing that the latter made a distinction between the exchange and use value based on ontology and metaphysics, rather than economics. Moreover, it can also deteriorate political and ethical considerations. Since Aristotle’s ontology presupposes a clear distinction between a particular substance and its attributes, thus, according to Meikle, the value of a service or good cannot be characterized at the same time by its exchange and use value. Meikle states that the use value is a term to define a substance as a mere substance. That is a thing as it de facto is by nature. In essence, the use value is heterogeneous’ and differentiated quantitatively. Meikle states that Aristotle created a metaphysical gap between the exchange and use value that prevents the achievement of the neoclassical theory’s objective and prove the exchange value can be explained in terms of the use value; the issue that Marx, Ricardo and Smith had believed to be impossible. It is necessary to reject the Aristotle’s theory of the exchange value and use value (or substance and attribute) in order to reach this merger. In consequence, Meikle criticized Aristotle’s economic vision since, as the former believed, Aristotle’s views of economics lie outside the economic field and can spoil ethical and political reasoning.

3. Aristotle's mindsets were predominantly focused on personal ethics. Due to this fact, he formulated a notion of fairness that can be applied to exchange. He defined the equality of proportion as the key element of a notion of fairness. For instance, suppose a tailor and a baker make and trade pants and bread respectively. Three loafs of bread are given for one pair of pants. Therefore, the proportion of exchange between loafs of bread and a pair of pants is three to one. Aristotle's viewpoint is that a notion of fairness is described as the relation of the tailor’s product to the baker’s product, as well as the baker to the tailor. Thus, the exchange will be fair only if the baker and tailor have the attributes possessed in the same 3-to-1 proportion as the products they sell. Obviously, in this way Aristotle initially refers to the skills required in these two professions. To meet Aristotle's notion of fairness, the baker’s skill in bread-making should then be three times as valuable as the tailor’s skill in pants-making. However, how can the skills of the tailor and baker be compared apart from their activity? Unfortunately, Aristotle gives no answer. His notion of fairness is given a definition not by utilizing a particular logical standard, but by actual exchanges popular at his time. This conundrum remained unsolved until Thomas Aquinas. He took account of competitive market forces and introduced the concept of a just price that became dominant when analyzing the idea of exchange fairness. Thus, Aristotle's notion of fairness is viewed as the equality of proportion.

4. Analyzing the art of acquisition, Aristotle depicts it as referring to the satisfaction of basic needs. The people satisfy these in a variety of ways depending on their mode of life: some of them by being bakers, some tailors and some farmers. However, there are two principal types of acquisition: natural acquisition and unnatural acquisition. In the Politics, he discusses the difference between these and explains the issue of excess property. The natural acquisition means the securing of shelter, food and other needs as an unavoidable, irreplaceable and indivisible part of the household management. According to Aristotle, any property is supposed to benefit the owner and is to be used in a way that does not contradict but complements its nature. On the contrary, unnatural acquisition presupposes that a person accumulates an unlimited amount of money for his/her own sake greatly exceeding the necessity level. His conviction lies in the fact that the right to property is limited to the amount necessary to sustain the city’s polis life. Household exchange requires the participants’ equal and mutual judgment. The polis should provide a setting for the development and exercise producing only the demanded services and goods. Aristotle states that there are certain kinds of products, such as clothes and food, which may have both exchange-value and use-value. If trade relationship is a common phenomenon in the society, the exchange procedure will then be facilitated by a monetary currency.

Aristotle strongly dislikes unnatural acquisition as such, since its aim of exchange is based on the production of monetary wealth (the accumulation of currency). Moreover, there is no reasonable limit to the currency amount accumulated by one person that the people indulge in when they seek wealth and excess property. For Aristotle, the household relationship is a natural relationship existing between the child and father or a wife and husband as they share the same property on the equal rights. However, is a husband, not a wife, who is predetermined to rule the household since males have more innate abilities to rule by their nature. Therefore, according to Aristotle, the natural acquisition is manifested when a person searches for the satisfaction of their basic needs. The unnatural acquisition means that a person accumulates an unlimited amount of money for their own sake, reflected in a mere fact of possessing certain material values.

5. The Delphian knife is a metaphor denoting a thing that can be used for multiple purposes, like cleaning or hunting. He uses it to illustrate the distinction between females and slaves. Each tool works best when it is intended for one purpose. However, the Delphian knife was created for performing numerous tasks. However, the person who creates the Delphian knife (the Delphian smith) uses it with one function and does not want to use this precious knife for making many other useful things. On the contrary, the barbarians use one instrument for plenty of applications, similar to how they distinguish between females and slaves. This artistic technique recognizes the necessity of nature. Aristotle uses this metaphor to demonstrate the contrast with nature, which creates everything having a certain practical and unique use in mind. Therefore, it is not the Delphian smith but rather nature, which serves as the creator. The Delphian knife is a metaphor showing an object used for many purposes. Besides, Aristotle could possibly use this comparison to emphasize the effectiveness of the principle of the division of labor. Hence, if many functions are simultaneously performed by a single part, the labor will be slower and less effective. As a consequence, the Delphian knife is represents the multipurpose entity, while each tool operates best when it is intended for the implementation of only one activity.