Aristotle’s beliefs on money lending had some extremely long-lasting effects on the way people view banks and money lenders. Throughout history, Western thought on the matter has been highly influenced by Aristotle’s view that money lending is “justly discredited” in his words.
Aristotle was a granular sort of person. He enjoyed breaking concepts down into smaller concepts, and would form his arguments slowly over the course of several agreed upon points. The first point in this particular debate is that all money was brought into existence to facilitate “exchange.”
It’s important to note that exchange in itself was not something Aristotle condemned. The idea that one gave something to get something viewed as equal in value was essential in some cases. Aristotle says that the act of trade “involves men’s taking things from one another” and seems to suggest a hostile approach to trade. This suggests, perhaps, that although trade is necessary it is also vulnerable to the evils of greed.
Still, something is being exchanged. Someone worked to produce a good that another worked to pay for. Yet money lending seemed to come from nothing. There are a few reasons why this could be the case. For one, Aristotle and philosophers of his ilk believed that unnecessary desires posed a grave threat to society. Money lending also led to goods moved, and foreigners coming to Greece. Greeks felt foreigners were a bad influence and Aristotle may have applied some of that thinking in his own work.
About the Author: Phineas Upham is an investor at a family office hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Phineas Upham website or Facebook page.