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Economic Ideology of Aristotle; A Brief Note

Updated on January 23, 2016
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IRSHAD CV has been a student in Economics. Now he is doing Masters in Economics. He completed B.A. Economics from the University of Calicut.

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Introduction

Aristotle is the world renowned ancient philosopher representing the Greek civilization. Even in this 21st century, Aristotle’s ideology claims much popularity. When considering the history of economic thought, Greek civilization gives us the ancient thought of economics. Actually Aristotle was one of the students of Plato and was the tutor of Alexander the Great. His teacher, Plato written very well about the economic ideas of that time. But the Plato’s economic thought was different in the writings of Aristotle. Any way the ideology of Aristotle too got much popularity as like the ideology of Plato. The main ideologies of Aristotle are found from his two books “Ethics” and “Politics”. This hub is aimed to explain the economic thought of Aristotle and his contributions to the field of history of economic thought in a brief manner.

Aristotle’s Idea on the Economy or State

According to Aristotle a social system or the state come into reality by incorporating many villages. Villages are formed out of many households. The main reason for the origination of the state is the existence of households or families. Because the root cause of wants are comes from households. So, in simple words, the idea of Aristotle about the state is that, it is the composition of families and villages. Further, he also says that, the ultimate purpose of the state is to lead a good life and for that develop a better society or state. Similar to the ideology of Plato, he says that, there are two classes in a society like the rulers and the ruled. The ruled people consist of common people who engaged in economic activities like farming, making of craft products etc. On the other side the ruler class consists of four different categories like soldiers, statesmen, magistrates and priests. The ruler classes will functions all the administrative matters of the state. At the young age, the rulers will function as the soldiers and gradually they will function other roles as statesmen, magistrates and priests respectively.

During the period of Aristotle, the slavery system was existed. It was generally recognized that some of the people are born as slaves by birth. So, Aristotle supported the slavery system, since it was the social belief of that time.

According to Aristotle a social system or the state come into reality by incorporating many villages. Villages are formed out of many households. The main reason for the origination of the state is the households or families. Because the root cause of wants are come from households.

Aristotle’s View on the Institution of Private Property

Aristotle and Plato were different in their philosophy, mainly on the ground of private property. Plato emphasis on the establishment of communal property while Aristotle is completely attacks this Plato’s ideology. Aristotle’s emphasis on the institution of private property is mainly by influencing in five factors. They are philanthropy, practice, peace, progress and pleasure. Each of them is described below.

Philanthropy: Philanthropy means love of mankind. When people own private property, it can be used for helping others. That is through the practice of mutual helping of private property. So, there will be inspiration the sharing of love among people.

Practice: If communal property practice is exists, the people may not manage the resources effectively. At the same time people will use their own private property in a good way. So, institution of private property will helps to better practice of resources.

Peace: When institution of private property exists, it will ensure peace in the state. According to Aristotle, in a communist system, everyone will enjoy equal benefits even their contribution to the state is not equally. So, institution of private property will enable to use the resources in an optimum manner. That is, if the person works more, he can enjoy the benefits. So, it will lead to ensure the establishment of peace among households.

Progress: Since the institution of private property increases the efficiency of the managing of resources, it will be more productive and progressive. The reason is concentration in the maximum utilization of private property will ensure the progress.

Even though Aristotle gives more importance for the institution of private property, he was also supported the social and moral values. He says that private property must be used for helping others, which will enrich a mind of humanism among people.

Aristotle’s View on Money and Interest

Aristotle discloses his idea about money with additional modification of the idea put forwarded by Plato. Aristotle’s concept on money is based on three major functions of money like money as a medium of exchange, money as a measure of value and money as a store of value. On the other hand, Plato’s concept of money was restricted to the medium of exchange function of money. Even there existed ‘barter’ system, money was started to use in the form of metallic money like gold, silver etc.

Aristotle was against the practice of interest. This is because most of the money borrowers are taking loans for meeting consumption expenditure. So, Aristotle supported the poor people by prohibiting the practice of interest. He says that, a piece of money cannot be get another piece. That means, it is unjust that making of money with money.

Conclusion

Aristotle is considering as one of the ancient analytical economists. He gave more and more advanced ideas than the ideas of his tutor Plato. For example, he clearly mentioned what is money and what money does. The Greek civilization disclosed by Aristotle is featured with many things like slavery system, prohibition of interest etc. The most important idea of Aristotle is the institution of private property. He gives more importance to the institution private property while Plato supports communal property. In short Aristotle gave many valuable ideas to the branch of economics and its history.

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    • icv profile image
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      IRSHAD CV 3 years ago from India, Kerala

      Tjanks hackslap for responding to the hub

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      Harry 3 years ago from Sydney, Australia

      Interesting insight into one of the most famous thinkers of mankind ...

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