2. We owe to Aristotle the fundamental distinction
between value in use and value in exchange (Politics
1257a). Less known is the fact that both his Politics
and Topics contain many other first thoughts on utility.
We find, for example, the idea that “the more con-
spicuous good” is the more desirable and also the
concept of complementarity among commodities,
which F. Y. Edgeworth was to introduce in economics
more than two thousand years later. Also, the observa-
tion that wants satisfied by material consumption alone
are subject to satiety was made again in 1855 by
Richard Jennings. On the other hand, Aristotle's analy-
sis becomes cumbersome as he forces upon it his
strongly ethical views. While recognizing that the
number of human wants is normally unlimited, he
contends that a good household should aim at setting
a limit to the satisfaction of these wants (Politics I.
9-10). He also denounces the craving for money on
the part of money-making people as abnormal and the
practice of “money-breeding” (money-lending) as the
most obnoxious of all. So set was Aristotle on this point
that he invoked the legend of King Midas in its support
without realizing that the legend illustrates only the
principle of want irreducibility. Even if everything
Midas touched had turned into bread, he still would
have died—of thirst.
Unfortunately, the most fateful of Aristotle's
thoughts on value are crowded in a few pages of
Nicomachean Ethics (1132a-1133b) and more often
than not are off the mark. His argument that commodi-
ties could not be exchanged with one another if every
commodity did not possess one measurable quality
common to all, is the origin of commodity fetishism.
In a somewhat cryptic sentence Aristotle asserted that
what renders all commodities comparable is χρεία,
which means “need” and may mean also “demand.”
Most likely, all he wanted to say was that exchange
is possible because people, generally, have the same
wants. Aristotle was very clear on the point which
anticipates the teaching of classical economists: the
quality that endows commodities with value is labor,
and the value of a commodity is proportional to the
amount of labor embodied in it. But, like many after
him, he simply begged the question of whether every
kind of labor is reducible to the same unit of measure-
ment.
A logician of Aristotle's stature could not possibly
overlook the logical implication that, if value is in
things (in whatever form), then exchange cannot in-
crease it—an idea that Karl Marx, in particular, was
to defend in modern times. The point that after a just
exchange or a just remuneration everyone must come
out without gain or loss harmonized splendidly with
Aristotle's ethical views. But the fallacy, shielded by
such a high authority, constituted the sturdiest obstacle
for more than two millennia to a clarification of the
problem of utility.
