Aristotle, Adam Smith and the problem of exchange.

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Doctoral Dissertations 1896 - February 2014
1-1-2002
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Kimberly K. Sims
University of Massachusetts Amherst
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Sims, Kimberly K., "Political community and individual gain : Aristotle, Adam Smith and the problem of
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POLITICAL COMMUNITY AND INDIVIDUAL GAIN:
ARISTOTLE, ADAM SMITH AND THE PROBLEM OF EXCHANGE
A Dissertation Presented
by
KIMBERLY K. SIMS
Submitted to the Graduate School of the
University of Massachusetts Amherst in partial
fulfillment of the requirements for the degree of
DOCTOR OF PHILOSOPHY
September 2002
Department of Political Science
Digitized by the Internet Archive
2015
in
©Copyright by Kimberly K. Sims 2002
All Rights Reserved
https://archive.org/details/politicalcommuniOOsims
1
POLITICAL COMMUNITY AND INDIVIDUAL GAIN*
ARISTOTLE, ADAM SMITH AND THE PROBLEM OF EXCHANGE
A Dissertation Presented
by
KIMBERLY K. SIMS
Approved as to style and content by:
Nicholas Xenos/ Chair
Jambs Der Derian, Member
fh-j
A'
.
Carlin Barfton, Member
repome Mileur, Department Head
Political Science
ABSTRACT
POLITICAL COMMUNITY AND INDIVIDUAL GAIN-
ARISTOTLE, ADAM SMITH AND THE PROBLEM OF EXCHANGE
SEPTEMBER 2002
KIMBERLY K. SIMS, B.A., UNIVERSITY OF CALIFORNIA
LOS ANGELES
M A. SAN FRANCISCO STATE UNIVERSITY
• ,
Ph.D., UNIVERSITY OF MASSACHUSETTS AMHERST
Directed by: Professor Nicholas Xenos
As the central expression of the principle of
justice, the idea of exchange has deep roots in the
classical Greek constitution of political community.
In the writings of Aristotle, the just material
transaction is crucial to the constitution of political
community. Aristotle's analysis of exchange in the
Nichomachean Ethics and the Politics attempts to
investigate the ways in which exchange can be rendered
in accordance with the principle of justice as an
equalizing reciprocity. However, as I show in the
first chapter of this work, Aristotle's treatment of
exchange in the Ethics does not succeed in creating a
formula for equivalency. Nor, in the subsequent
attempt to approach the issue of exchange in the
Politics, is Aristotle able to decisively separate
transgressive and unequal modes of exchange from
beneficial and fair ones. In the end, as I argue,
IV
Aristotle has discovered an aporia pointing to the
fundamental ambiguity of exchange - one which points,
moreover, to a troubling ambiguity with regard to the
nature of the bonds maintaining the polis.
The second chapter explores Mercantilist and
Physiocratic attempts to solves the problem of the
excessive remainder of exchange. The resolution of
Aristotle’s aporia, as I argue in the third chapter, is
found in the Adam Smith's Wealth of Nations. Smith's
epochal work endures less for its formal analytical
contributions than for the ideological content it
offers to market economics. My argument is, in
essence, that the ideological portion of the Wealth of
Nations is premised on a characterization of exchange
as qualitative and distributive. This positing of
exchange effects a turn on the Aristotelian treatment
of beneficial and/or non-transgressive exchange forms
in order to repress the quantitative issue of exchange-
value and the attendant issue of individual profit.
The suspension of quantitativity is not only necessary
—
to the supression of profit but serves to formulate
a new characterization of exchange in which the
exchange transaction as disassociated from the
trappings of quantitativity now becomes a source for
ideological or "meta-economic" appropriations.
v
PREFACE
Material exchange presents a problem to theory.
Because exchange does not and can not effect a precise
-
substitution
similitude of objects transacted would
wholly negate the need for the activity - an essential
dissimilitude between exchangeable objects is reguisite
to any transaction. In the literature of the classical
Greeks, two competing representations of material
exchange evince this difficulty. In some instances,
the concept of economic exchange is cast as necessary,
natural and mutual, performing the reciprocal function
of provisioning and distributing goods. In a second
sense, exchange is presented as an adventitious
phenomenon which produces unfair gain -- and as such,
is a subversion of the bonds necessary to political
community.
The goal of this inquiry is to trace the
reverberations and implications of this classical
problem in the modern epoch; an epoch marked by the
transmogrification, both formally and ideologically, of
the paradox of exchange.
vi
.
TABLE OF CONTENTS
ABSTRACT.
iv
PREFACE.
vi
CHAPTER
INTRODUCTION
.1
I. THE PROBLEM OF EXCHANGE IN CLASSICAL GREEK
17
A. Aristotle: The Nichomachean Ethics
B. Aristotle: The Politics ^ ^ 17
C. Exchange and Political Community 37
49
II. EARLY MODERN APPROACHES TO THE PROBLEM OF
EXCHANGE
57
AB.. MTehrecaEnctliilpissem:ofExExcchhaannggee:andThAebsPohlyustieocrAadtvsantage .. 57
66
III. ADAM SMITH AND THE TRANSMOGRIFICATION OF
EXCHANGE
A. Production and "Universal Opulence": The Division
of Labor
g9
B. Exchange: "Of the Principle Which Gives Occasion
to the Division of Labor"
97
C. Barter and the Labor Theory of Value 109
IV. REVERBERATIONS AND ACCESSMENTS
120
A. Barter: "Need," Use and Ambiguity 120
B. The "Adam Smith Problem"
124
C. Conclusion
BIBLIOGRAPHY
140
) .
INTRODUCTION
mTaon.e.x.chdaindgetakgeoldnofporrofsiitlvefrr,om• msaokitnhagt no
such exchange.
Chaucer
beherielluisstrnaottehdinbgywphhiiclhosroepqhuyiretshanmore to
trade.
Samuel Johnson
The concept of exchange has roots in the classical
Greek idea of justice, dike, a harmonious association
m
which the law of measure is observed or enacted. As
a law of measure, dike provides a corrective which
counters disorder, a corrective enacted through
reparation. 1 According to the cosmology of
Anaximander, nature functions as a self-regulating
equilibrium, and the settlement of justice entails
compensation through which the naturally opposed
elements stoicheia are required to make reparations
(
{dike) to one another for their transgressions of the
order of the kosmos as they engage the process of
1 On early forms of Greek justice see Eric Havelock,
The Greek Concept of Justice From Its Shadow in Homer
:
To Its Substance in Plato (Cambridge: Harvard
University Press, 1978)
1