Justice, Temperance, and Unearned Income

In Aristotle’s Politics and Nicomachean Ethics, he details the roles of currency and exchange in the Greek commercial economy of his time, while exploring the virtues necessary to live a good life. He explores their intersections—how people’s financial responsibilities are rooted in virtues, and vice versa. One must keep in mind, however, that his analysis is contemporary to a commercial state with fundamentally different economic circumstances, when compared to the modern, complex, global, capitalist economy. Thus, his ideations are impacted by different constraints: Aristotle did not, for example, factor in the ethical ramifications of stock exchanges, as those just didn’t exist in the fourth century before Jesus Christ. So, the repercussions of his conclusions about wealth acquisition and usury may also be different when considering the modern economy. Thus, in today’s world, a reasonable, intensive planning of one’s own wealth acquisition may not necessarily be detestable, from an Aristotelian perspective. Indeed, saving and investing one’s excess income may lead to capital gains that would allow one more financial resources to effect positive social change. However, such behavior only works with a disciplined attempt at temperance and material satiability.


To better comprehend how a modern interpretation of Aristotle’s analysis might, under specific circumstances, approve of allowing money to work for itself, it is critical to first note why his objection to popular money usage and usury is so damning in the first place. He explains that currency simplifies trade in a complex economy: Money is “the unit and limit of exchange” (Politics 17), with which people “exchange useful things for other useful things, but nothing beyond that” (16). The original—albeit unnatural (15)—development of currency is meant for no more than “to fill a lack in a natural self-sufficiency” (16). However, to Aristotle, money possesses no inherent utility. Unlike a useful material good, currency cannot nourish or satisfy its owner: “It is [merely] useful, [choiceworthy only] for some other end” (16). This is because “money itself is nonsense and wholly conventional,” and, if altered or untraded, absolutely worthless (16). And yet, currency has transitioned from being seen as a means, which would not hold inherent utility for the owner, to an end in itself (16). The belief that money is inherently useful is, to Aristotle, a complete denial of money’s true purpose. As such, saving money just for the sake of excess wealth acquisition is pointless, and unlikely to lead anyone toward a good life (17-18). With this in mind, usury is “very justifiably detested” (19). Usury denies currency’s true purpose by treating it as a good to be sold, all for the purpose of unneeded, and likely meaningless, wealth acquisition.

And yet, within the contemporary global economy, individual wealth acquisition may significantly assist an investor in pursuing justice—the virtue Aristotle just happens to value the most (87). This is because saving one’s excess income in the short-run is often the only effective method to have enough capital for sound purchases later on. Moreover, responsible investments with one’s saved earnings may bring about strong capital gains later on, which one can leverage in bringing forth positive social change. To understand why saving and investing unused income might be beneficial, consider someone who decides to purchase useful material goods with all of her income, immediately upon receiving her paycheck. She avoids any pile-up of unused money, because, according to Aristotle, it holds no inherent utility. However, in doing so, she harshly limits her own financial autonomy. This is because so many critical purchases and investments require saving money, or at least having lots of it. This argument directly refutes the idea that saved money is necessarily perceived as a personal good: She who saves money sees it as something which cannot always be effectively spent immediately. This is why parents can afford to send their children to expensive colleges and universities, to pursue a “life of study,” as Aristotle very much adores (5). It is because they have held onto, and likely invested, a significant portion of their income for so long, that their wealth has grown to a point where they actually can finance such a venture. Moreover, one must consider that, while many usurers still exist today, a much more widespread technique of increasing one’s unearned income is to invest money in the stock market, or in bonds. In this case, businesses and organizations leverage the capital they gain from selling their stock, in order to purchase goods. Thus, one could certainly hold onto wealth in the form of physical bills, which would be both unused and perpetually lowering in value, according to rates of inflation. Alternatively, one could invest the currency, allowing it to be used in the exchange of goods more immediately. In this case, the investor acknowledges that money is meant for material goods exchange, and she allows for that to take place. Aristotle’s only qualm would be that such an investment is intended for her own wealth acquisition. However, if she spends all excess unearned income on useful material goods in the pursuit of justice (e.g. books and computers for a library in a poorly funded school), then Aristotle might argue that such behavior “is not contrary to nature, nor is it any kind of wealth acquisition” (16). Indeed, it both affirms the money’s purpose and her own temperance, given that such material goods wouldn’t even be for the investor, but for other people. Thus, saving and investing one’s income is not solely a method to hold onto money just for the sake of wealth acquisition. It is typically a necessary practice meant to augment one’s financial autonomy, which greatly impacts how an investor may pursue justice.

The crux of this justification for saving and investing money rests on a stark willingness to temper one’s own material goods—temperance, of course, being one of Aristotle’s “virtues of character” (Nicomachean Ethics 18). While somewhat tangential to Aristotle’s discussion on the true purpose of money, temperance is at the heart of his opinions on wealth acquisition. Indeed, one of Aristotle’s primary objections with undue wealth acquisition is that, while wealth acquisition should have limits, as would befit his goals of temperance, “all wealth acquirers go on increasing their money without limit” (Politics 17). As such, the crisis of wealth is that money itself is the very “craft that produces the excess” necessary to gratify untempered wealth acquirers (17). This is where Aristotle’s objection with money and promotion of temperance intersect: Even though he sees not spending money as a bastardization of the very existence of currency, spending it on excess material goods is also detestable. This contradiction of sorts accentuates both the shallowness of investing one’s capital for excess material goods in the long-run and the ultimate virtue in devoting one’s wealth to just pursuits. On the one hand, Robert and Edward Skidelsky contend that the “economic insatiability” (qtd. in 17) embodied by consumers of excess material goods ultimately leads to dissatisfaction. Furthermore, they claim that the very abundance of material goods in many countries is, ironically, what drives people to become “incapable” of appreciating the goods at all (qtd. in 17). Aristotle calls consumers of excess goods “slavish” and equates them to “grazing animals” (Nicomachean Ethics 4). Gary Gunning argues that capitalism itself, more to blame than any material abundance, drives this false conception “that a good life is mainly a matter of accumulating material possessions” (17). However, if someone saves and invests excess money, while only purchasing for herself that which lends a sense of “self-sufficiency”—which Aristotle notes is a critical ingredient in the good life (Politics 14)—then she can leverage her excess unearned income later on in responsibly financing just pursuits. In this case, one’s temperance actually allows her to live a more just life. What follows is that the more excess wealth a tempered investor possesses, the more autonomy she has to bring forth positive, longstanding, and widespread social change. Therefore, because, in this case, temperance and justice are directly related, investing in that which yields the most profit would not only be acceptable, but encouraged, to render her philanthropy more effective. There are two caveats in this argument: First, one’s investments must be just in the first place, perhaps by bringing about positive externalities for the communities or environments surrounding the chosen businesses and organizations. The second caveat is that an investor must devote her excess resources to effective ethical causes. And yet, given the wide array of avenues for ethical investments and donations, these caveats can be easily overcome. Therefore, the case for sustainable investments and philanthropy is a reasonable one. So, ethical objections to such a practice, even from Aristotelian perspectives, deserve serious reconsideration, in the context of the present-day global economy.

Aristotle certainly presents an apt analysis of the close relationship among virtues and financial choices, in the context of the Greek commercial economy contemporary to him. However, it is critical to recognize that he leaves room for growth in his own analysis, by labeling usury from the perspective of the perceiver, not the action itself. He says that usury is “detested,” but not necessarily inherently vicious or wrong. Albeit subtle, this sentence structure allows for differences in opinion when interpreting the ethical ramifications of unearned income, because it makes no lasting judgment on the action itself—only his opinion of it. While some people, such as Aristotle, might rightly detest unearned income in certain contexts, others may find that it helps them to pursue justice, and they may appreciate it a lot more because of that. And yet, as time passes and the structure of the global economy shifts and grows, the contexts surrounding money lending and investments typically change, so their ethical ramifications should adjust accordingly. Now, given that unearned income does not necessarily result from exorbitant interest rates, and that effective philanthropy to people and organizations across the world is within any investor’s means, there is reason to believe that someone can justifiably save and invest her excess money in the short-run, so that she may pursue justice with her capital gains later on. Furthermore, such a choice may even be more ethical than merely spending one’s income immediately upon receiving the money, because the former option allows her to finance just pursuits with more resources. This argument is not intended to wholly reject Aristotle’s findings on usury, but to acknowledge that, as global economic contexts dramatically change, so too should our contentions about which choices are most ethical. However, if we continue to highlight the role of virtues in our decision-making methodologies, as Aristotle does in his own analysis, then we may reasonably find suitable ethical guidelines for any systematic change that may emerge in the years to come.