The invention of coins brought about a commercial revolution as a new market economy began to develop in the midst of more primitive means of distributing production across consumers. However, money also had negative side effects. It provided a new way of storing wealth that served no productive end in itself; unlike an estate, a chest full of coins produced nothing that satisfied human wants. The wealth tied up in money form was deadweight. Yet, its relative convenience and the fact all other wealth could be measured in terms of coined money meant it was sought by those engaged in commerce, perhaps excessively. This is what Aristotle thought of those engaged in the new market economy. Thankfully, money has moved on and today better fills the role Aristotle sought for it.


           According to Aristotle, the ethics of actions should be judged by their ends, or telos. The different means by which an end can be obtained is not given the same consideration as the end itself. Also, the same action, undertaken for different ends, has different ethical consequences. Since what mattered was not the action itself but its purpose, actions are of indeterminate moral worth until one considers the ends in sight. Aristotle believed that achieving happiness was the purpose of human life, a final end because, unlike other ends, happiness is not sought to advance other goals but for its own sake. Not everything we chase after actually makes us happy and this is critical to understanding Aristotle’s theory of money.

“Every art, and every science reduced to a teachable form, and in like manner every action and moral choice, aims, it is thought, at some good: for which reason a common and by no means a bad description of the Chief Good is, ‘that which all things aim at.’ … in all such, the Ends of the master-arts are more choice-worthy than those ranging under them, because it is with a view to the former that the latter are pursued. … Since then of all things which may be done there is some one End which we desire for its own sake, and with a view to which we desire everything else; and since we do not choose in all instances with a further End in view (for then men would go on without limit, and so the desire would be unsatisfied and fruitless), this plainly must be the Chief Good, i.e. the best thing of all.”

Aristotle, Nicomachean Ethics, Book I, Chapter I

           Aristotle’s ideas about money and the market economy are contained in tracts like the Nicomachean Ethics and Politics but as a fraction of his total output, what he had to say directly about these matters is quite small. Still, they are sufficient to reflect the nature of money and trade in his era and also mark a notable waypoint in the development of our thoughts about these subjects.

           Of course, the role of money and trade in an economy has changed substantially over human history, so has our relationship with these things, and therefore so too have the way we think of money and trade. Greece in the 4th century B.C. had largely a sustenance economy rather than a market economy, or at least the latter was less significant than it is today. People produced things for themselves and their households and traded little, at least compared to today. Coined money itself only dated to the mid-to-late 7th century B.C. so even this, in the span of human history since then, was a relatively new creation in Aristotle’s day.


           Aristotle understood the positive effects of coined money on the economy. Money provided an alternative to inconvenient barter and established money prices for all products, enabling fairer trade. Indeed, it became difficult to even determine fairness in trade without thinking in terms of money. However, Aristotle respected money only as an expedient for trade, namely as a means to an end. The end objective is obtaining precisely what one needs to satisfy his natural wants and needs. This is good and money should only be used as a means to satisfying that end.

Greek silver coins dating to as far back as the 6th century B.C., Source: Cartwright, Mark. “Ancient Greek Silver coins.” World History Encyclopedia

           By contrast, Aristotle frowned upon the pursuit of money as an end in itself. He thought it irrational, a mistake perhaps resulting from the fact that as a common unit of account, all wealth could be expressed in money. In this way, the nature of money caused people to treat it as an end in itself. Of course, unlike true wealth, you can’t eat money.

“… he who is rich in coin may often be in want of necessary food. But how can that be wealth of which a man may have a great abundance and yet perish with hunger, like Midas in the fable, whose insatiable prayer turned everything that was set before him into gold?”

Aristotle’s Politics, Book I, Chapter 9


           Money made trade more convenient but there was far less trade, whether internal or foreign, in Aristotle’s day than we are accustomed to today; indeed, trade was even controversial. For his part, Aristotle approved of trade and thought it important that people gave what they had surpluses of to acquire what they lacked.

           However, only trade to secure needed commodities was appropriate while trade for the pursuit of money itself was not. The former is required to satisfy man’s wants whereas the latter, which Aristotle called the ‘retail trade’, essentially reselling an article for a profit, was a transaction which only produced more money but did not satisfy any natural want. Unlike ‘trade for commodities’, which naturally ends when one has enough of that commodity, ‘trade for money’ is limitless and as Aristotle noted in the first quote above “for then men would go on without limit, and so the desire would be unsatisfied and fruitless”.

“For natural riches and the natural art of wealth-getting are a different thing; in their true form they are part of the management of a household; whereas retail trade is the art of producing wealth, not in every way, but by exchange. And it is thought to be concerned with coin; for coin is the unit of exchange and the measure or limit of it. And there is no bound to the riches which spring from this art of wealth getting.”

Aristotle’s Politics, Book I, Chapter 9

           Clearly, Aristotle was not too fond of merchants. In this respect he was like many other contemporary Greeks. Commercial activity garnered suspicion and was generally a disreputable way to earn a living at the time. Trading for money profits was thought to harm industry because the merchant did not care about the quality of his wares since he didn’t intend to use them himself but only intended to sell them.

           Today, such thinking seems strange because we find it hard to believe that a knife-maker, to use an example from Aristotle’s Politics, really cares much less about profit and much more about quality than a knife-seller. Aren’t both just out to become wealthy in their respective trades? Though we may wish the quality of products were better, it is difficult to relate to Aristotle’s thinking on the subject because we are so far removed from the sustenance economy Aristotle knew, where products often were used by those who made them rather than sold. We think of all production today as destined for the market and that was not the reality in Aristotle’s time.

           Keeping with the topic of merchants, Aristotle also implied that some occupations, like the ‘retail trade’, encouraged an excessive want of money. Farmers, and others who produced material things, were less susceptible to this vice he thought. Again, to modern readers, it seems foreign to suggest that those engaged in ‘productive’ activities like farmers, craftsmen, or industrialists have a reduced appetite for money than those engaged in ‘exchange’ activities like shopkeepers or wholesalers.

           We think of all these occupations as equally engaged in the commercial world today; all are in the business of buying and selling. But Aristotle did not suggest his claims were contrarian or counterintuitive, so there must have been something to this in the world Aristotle inhabited. Recall that this was an era in which sustenance agriculture made up a far larger share of economic activity. As such, merchants would have been relatively unique in having to deal in money quite regularly. Merchants did seem to have a different relationship with money in this era when money was more novel.

Money vs. Wealth

           To further improve our understanding of where the Greeks are coming from, we should separate the concept of wealth and money. As mentioned earlier, because all other forms of material wealth can be expressed in money, the two are linked but money itself has no intrinsic use value, its value is found only in exchange.

           Aristotle had no issue with wealth generally, something that long predated the concept of money. It was the unnatural accumulation of wealth he criticized. He regarded true wealth as the use of productive things and not the hoarding of anything, especially coined money worthless by itself. Thus, to him, the problem with money was the hoarding of it without productive purpose and to Aristotle this was a problem plaguing the merchant in his time especially.

           One has to note though, unlike a farmer, a merchant back then had little choice but to store his wealth in money form and to keep ‘working’ that coined money in order to secure his legacy, retirement, or other objectives, much in the same manner a farmer does his land. There was no alternative means of saving that did put his coined money to productive use and divorce his trade from the hoarding of money. Now the issue becomes apparent.


           Aristotle thought chasing money was inappropriate because it was a defective proxy for true wealth, productive wealth. Of course, no storekeeper today thinks of the money in their till as the extent of their wealth. Money today is largely ‘bank money’, entries in accounts, an abstraction and little else. Because it is lent, spent, deposited, and lent, spent, and deposited again, over and over, where this ‘bank money’ even exists is an open question, but one largely irrelevant. It is an expedient to trade and little else.

           The introduction of coined money in Ancient Greece brought its own efficiencies in trade but the physical nature of the money they used meant that a great amount of wealth was being tied up in the strongboxes and purses of merchants. These merchants could appear to those outside the commercial sphere as irrationally and immorally covetous of something inert. They lacked a system where money could be conveniently put to productive use while being saved for future use.

           The merchant did not store his wealth in coined money because he wanted to but because, short of changing his occupation entirely, he had to. Of course, in the absence of a better alternative, the merchant’s habit of hoarding money seemed like a twisted desire and Aristotle took understandable issue with that. But, if their appetite for more money looked limitless, it was because working that money in trade themselves was the only way the merchant could keep it employed and preserve it for the future.

           Today, the surplus wealth of households or businesses alike can, and usually is, kept largely in banks or funds which are engaged in lending or investing this money and hardly any of it is kept in physical money form. All commercial activities, that of the ‘productive’ farmer included, make use of this modern system because of the convenience it offers. Such a system allows money to be kept in productive use while being saved. By moving on from coined money, we have devised ways of keeping our surpluses productively employed for future use even whether we are storing, transferring, or drawing on those surpluses. Thus, finance has provided in a more recent period of human history an easier way of satisfying our material wants and needs just as coined money had in Aristotle’s day.

           Perhaps more remarkably, because the need to store wealth in coined money has dissipated, so too has the concept of ownership of money altogether. Aristotle saw the value of money as an expedient for trade and warned against hoarding it. With the advent of banking, hoarding money has lost its distinction from chasing wealth generally, because exactly what hoarding money means is now unclear.

           Simply put, it has become difficult to say who really ‘owns’ money. If a bank uses the deposits of one customer to make a loan to another, does the money belong to the depositor, the bank, or the borrower whose account was credited with the loaned money? Does it belong to all three? Money, distinct from wealth, has become as close as it has ever been to being considered a social expedient, a ‘means’ that is, rather than an ‘end’ in itself. When one is said to chase money, it is usually taken to mean chasing wealth, and not the distinct vice Aristotle rejected.


           The transition from a sustenance economy to a market economy that money enabled was for the best, but it introduced problems. Aristotle believed people were now seeking money as its own end rather than using it only as a tool. In the absence of other ways of holding wealth in a freely transferable form, it seemed to observers that this was true, and it served no productive end. Coined money did suffer the defect that mining its metal, minting it, and tying up wealth in it, was seemingly unavoidable for those engaged with the new market economy. Not until the development of a banking system did money become purely the abstract means to an end Aristotle hoped it would be, making trade more efficient without locking up wealth for no productive purpose.

More from the Tontine Coffee-House

           Read about how the Bank of Amsterdam changed the way we think of money and how France’s government attempted to marshal the ‘coined’ wealth of Frenchmen for public purposes. Consider subscribing to this blog’s newsletter here.  

Further Reading

1.     Aristotle. Politics. Translated by Benjamin Jowett, Batoche Books, 1999.

2.     Aristotle. The Nicomachean Ethics of Aristotle. Translated by D.P. Chase. Introduction by J.A. Smith. Translated by Drummond P. Chase, J.M. Dent, 1925.

3.     Congleton, Roger D. “Chapter 9 – A Beginning: Aristotle on Ethics, Markets, and Politics.” Solving Social Dilemmas: Ethics, Politics, and Prosperity, Oxford University Press, New York, NY, 2022.

4.     Eich, Stefan. “Between Justice and Accumulation: Aristotle on Currency and Reciprocity.” Political Theory, vol. 47, no. 3, 2018, pp. 363–390.

5.     Meikle, Scott. “Aristotle on Money.” Phronesis, vol. 39, no. 1, 1994, pp. 26–44.

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