Saturday, October 8, 2011

Just price and human autonomy

This is based on a comment I made here.

In any discussion of “just price”, one should not blame the Romans, even by implication, for any notion that extends beyond fair bargaining. They had no truck with notions of intrinsic value, as we can see in this quote from Servius Sulpicius Rufus, writing in the first century BC here:
All buying and selling has its origin in exchange or barter; there was once a time when money did not exist and terms like ‘merchandise’ or ‘price’ were unknown. Rather, each person bartered what was useless to him for that which was useful, according to the exigencies of his current needs; it often happens that what one man has in plenty another lacks. However, since it did not always and easily happen that when you had something that I wanted, I, for my part, had something that you were willing to accept, a material was selected which, being given a stable value by the state, avoided the problems of barter by providing a consistent medium of exchange. This material, struck in due form by the mint, demonstrates its utility and title not by its substance but by its quantity, so that no longer are the things exchanged both examples of wares, but rather one of them is termed the ‘price’ [Praetorian Edict: D.18.1.1pr].
Medieval “just price” thinking had other origins, including that development of Aristotelian natural law philosophy known as Scholastic philosophy.

At the heart of natural law theory is a notion of things having defining purposes (their final cause). So, interest on money was verboten since the purpose of money was exchange and interest charged for what was not the purpose of money. There was also argument that money—remembering their only form of money was coins—was sterile, so it "growing" of itself was against nature. Hence Aristotle’s denunciation:
There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of an modes of getting wealth this is the most unnatural (Politics, Book One, Part X).
Once you have a notion of proper (indeed defining) purpose, that puts limits (sometimes severe limits) on where bargaining can go. This is particularly clear in sexual ethics: the "defining purpose" of sex and genitals is procreation, so there is no permitted "sexual bargaining" that allows sex outside marriage (the vehicle for raising children) or sex that does not permit the possibility of conception (no masturbation, no oral or anal sex to point of ejaculation; no artificial blocks to conception, all of which is use of defined-to-be-procreative organs against their nature). Which is the same sort of reasoning as "money is round bits of metal the purpose of which is exchange, so charging interest is against its nature".

So, in Scholastic thinking, a just price has to fit within the defining uses, the final cause, of things. Such as, the purpose of economic activity is to sustain life. Which has all sorts of implications, such as limitations on return; on what you can charge for.

One can have notions of fairness, or even of commonality, which do not rely on notions of "just price" grounded in intrinsic nature of things. There are good reasons to have rationing in a besieged city, for example.

But there is a difference between "this is a violation of our sense of fair play/common life" and "this is a use of something outside its nature/proper purpose". Between "this is not just behaviour to fellow citizens" and "this is an against-its-nature use of x". The latter involves potentially quite serious limitations on human autonomy, the former is paying a particular form of attention to it.

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