A History of Greek Economic ThoughtTrever, Albert Augustus
History
A History of Greek Economic Thought
Trever, Albert Augustus
Economics -- Greece -- History; Thesis (Ph. D.)
The common element in diverse products that makes them commensurable is
need, or demand (ἡ χρεία), for reciprocal services.[724] But on the
basis of the need of the moment, or under the régime of barter, just
exchange would be practically impossible, since the concrete needs of A
and B, at any given moment, are not likely to correspond. In such a
case, exchange would be a gross disregard of the cost of production.
This has been avoided by the introduction of money as a substitute for
demand,[725] a symbol of general, rather than specific need. Thus just
exchange becomes possible, for money, as the representative of general
need, is always equally in demand by all, and, as the common denominator
of value, it alone renders it possible for proportional amounts of each
product to be exchanged.[726]
Aristotle’s basal premise in this theory of fair exchange, that unless
an equal quantum of value is received by each party, one must lose what
the other gains, has been severely criticized by Menger.[727] He objects
that the determining consideration in exchange is not the equal value of
exchanged goods. On the contrary, men trade only when they expect to
better their economic condition. “Um ihres economischen Vortheils
willen, nicht um gleiches gegen gleiches hinzugeben; sondern um ihre
Bedürfnisse so vollständig als unter den gegebenen Verhältnissen dies
zulässig ist zu befriedigen.” Each gives the other only so much of his
own goods as is necessary to secure this end, and it is this competition
in open market that fixes prices. Barker[728] also criticizes Aristotle
on the ground that he takes no account of demand in his theory of just
price. He states that if the cost of production were the only element to
be considered, the doctrine might be correct, but with the entrance of
demand, one may buy at a low price and sell at an advance without
injustice.
Public-domain text, read in full here on John Shaqi.
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