Aristotles Critique of Usury & The Natural Order • FarrosFR

In the modern era, the concept of charging interest on loans known as usury has become a standard aspect of financial systems worldwide. Banks, credit card companies, and lenders routinely charge interest as a means of generating profit. However, if we delve into the philosophical traditions of ancient Greece, we find a profound critique of this practice, particularly from one of history’s greatest thinkers: Aristotle. His views on usury offer a timeless reflection on the ethics of money, justice, and the natural order.

Aristotle’s Understanding of Money: A Means, Not an End#

To understand Aristotle’s critique of usury, it’s essential to first grasp his conception of money and its role in society. Aristotle, writing in the 4th century BCE, approached the topic of money within the broader context of his philosophical exploration of nature, purpose, and ethics.

For Aristotle, money was a human invention, a tool created to facilitate exchange within a community. In his seminal work “Politics,” he explains that money’s primary function is to act as a medium of exchange an agreed-upon measure that allows people to trade goods and services more easily. Aristotle saw money as inherently valuable not because of what it is, but because of what it represents: a means to acquire the things necessary for life.

Unlike tangible goods such as food, livestock, or land, which have intrinsic value and can produce more of themselves (crops grow, animals reproduce), money is “sterile.” It cannot, by its nature, create more money. Aristotle emphasized that money is meant to be used, not to be accumulated for its own sake. When money is stockpiled or used to make more money, it becomes an end in itself rather than a means to an end. This, according to Aristotle, is a fundamental distortion of its natural purpose.

The Unnatural Practice of Usury#

Aristotle’s concept of “natural” versus “unnatural” practices is central to his critique of usury. In his view, natural economic activities are those that align with the natural purposes of objects and contribute to human flourishing (eudaimonia). Farming, for instance, is natural because it produces food, which sustains life. Trade is natural because it enables people to obtain what they need by exchanging goods they have for goods they lack.

Usury, however, falls into the category of unnatural practices. When a person lends money and charges interest, they are using money to generate more money, without any productive activity occurring in between. Aristotle argues that this is contrary to the natural order because it attempts to make something (profit) from nothing (sterile money).

In his “Politics,” Aristotle writes, “Usury is most reasonably hated, because its gain comes from money itself, not from that for the sake of which money was invented. For money was intended to be used in exchange, but not to increase at interest.” This statement encapsulates his belief that usury is fundamentally unjust and contrary to the purpose for which money was created.

Justice and Fairness in Economic Transactions#

Aristotle’s ethical framework is built around the concept of justice, which he defines as giving each person their due. Justice, in Aristotle’s view, is about maintaining balance and fairness in relationships, whether they be social, political, or economic.

In the context of economic transactions, Aristotle believed that justice required equality and reciprocity. A fair transaction is one where both parties benefit proportionally from the exchange. For example, when a farmer sells wheat to a baker, both parties benefit the farmer gains money, and the baker gains raw material to produce bread.

Usury, however, disrupts this balance. When a lender charges interest on a loan, they receive more than what they originally provided, creating an unequal exchange. The borrower, in turn, ends up paying back more than they borrowed, often leading to hardship or even ruin. Aristotle saw this as a violation of justice because it allows the lender to profit without contributing anything of value to the transaction.

Moreover, Aristotle was concerned about the social implications of usury. He believed that practices like usury, which concentrate wealth in the hands of a few, lead to economic inequalities that can destabilize society. In a just society, wealth should be distributed in a way that supports the common good, rather than being hoarded by a small elite at the expense of the many.

The Pursuit of Eudaimonia: Economic Activity and the Good Life#

At the heart of Aristotle’s philosophy is the concept of eudaimonia, often translated as “flourishing” or “the good life.” For Aristotle, the ultimate goal of human life is to achieve eudaimonia a state of being that is realized through virtuous activity and the fulfillment of one’s potential.

Economic activity, in Aristotle’s view, should support this ultimate goal. The purpose of wealth and money is to provide the material conditions necessary for people to live well to have food, shelter, clothing, and the resources needed to participate in the life of the community. Economic practices should thus be oriented toward the common good and the well-being of all members of society.

Usury, by contrast, is seen as an obstacle to the achievement of eudaimonia. By prioritizing profit over human well-being, usury distorts the true purpose of economic activity. It encourages the accumulation of wealth for its own sake, rather than for the sake of living a good life. In Aristotle’s ethical framework, this is not only unnatural but also morally wrong.

Relevance of Aristotle’s Critique in the Modern World#

While Aristotle wrote in a very different economic context, his critique of usury remains relevant today, particularly in discussions about the ethics of finance and wealth distribution. In a world where debt and interest payments dominate many people’s lives, Aristotle’s concerns about the justice and fairness of economic practices resonate with modern debates about income inequality, predatory lending, and the moral responsibilities of financial institutions.

Aristotle challenges us to reconsider the role of money in our lives and to question whether our economic systems truly serve the common good. His emphasis on justice, fairness, and the natural purposes of money provides a framework for evaluating the ethical dimensions of financial practices that, despite their ubiquity, may not always contribute to the well-being of individuals and society as a whole.

As we navigate the complexities of modern finance, Aristotle’s insights remind us that the pursuit of wealth should never come at the expense of justice and human flourishing. Instead, economic practices should be guided by a commitment to fairness, reciprocity, and the common good principles that lie at the heart of Aristotle’s philosophy and continue to hold profound relevance today.

Photo by Pepi Stojanovski ↗ on Unsplash ↗