IV: The Problem of Potentiality

The metaphysical problem of money in Aristotle

Aristotle offers his most thoroughgoing treatment of the relationship between potentiality and act in Book IX of the Metaphysics. There, he distinguishes between two forms of potentiality, or δύναμις [dunamis], and two forms actuality, or ἐνέργεια [enérgeia]. His first pairing of potentiality and act concerns κίνησις [kínēsis] or movement—although in the context of Aristotle’s philosophy, movement might better be understood as change. A change that has yet to be completed, he tells us, remains merely potential; it becomes actual only after it has already taken place. But Aristotle quickly moves on, informing us that this first form of potentiality is not the one that interests him. What interests him is the form of potentiality that corresponds to an actuality properly so called—the ‘capacity’ for an ‘activity’ as Aryeh Kosman has convincingly argued we should render Aristotle’s δύναμις and ἐνέργεια. Activities in the proper sense are acts that are accomplished in the very act of performing them; they are means that are their own ends. “Every motion is incomplete,” Aristotle writes; it is not the same thing to be building a building and to have built one. Conversely, living and living well are completed actions even when we are still performing them; “we are living well and have lived well, we are happy and have been happy, at the same time […] we both are living and have lived.” When one is performing an activity, in other words, one need not know the future to know whether they will have done what they set out to do. An activity, unlike a change, can be interrupted at any moment; this will not mean its end has not been accomplished.

The distinction between κίνησις [kínēsis] and ἐνέργεια [enérgeia] provides a first clue to the way Aristotle understands both the power and problem of money. If money was made to facilitate exchange, this means it was made to facilitate an act that falls squarely under the category of κίνησις [kínēsis]. A transaction that is interrupted before goods and services change hands is a failed one; no actual exchange has taken place. According to the terms of Aristotle’s ethical theory, this means that exchange must be a means to an end; its τέλος [télos] must necessarily be an ἐνέργεια [enérgeia] other than itself. On one level, then, it might be true that Aristotle imagines that money is used perversely when its use fails to facilitate the making of equivalence in an exchange—but exchange itself is a motion or change whose functional significance must be explained in terms of the activities it furnishes the means to perform.

When Aristotle writes that Book IX of the Metaphysics is concerned with the capacity for activity in the proper sense, he also clarifies that this means it is concerned with what he refers to as “active,” as opposed to “passive” capacities. He explains the meaning of this distinction more fully in De anima. There, Aristotle argues that there are two senses in which someone could be said to possess the capacity to understand someone else’s words. On the one hand, we might say that someone is capable of understanding someone else in virtue of the kind of being they are. As human beings, each person possesses the common human capacity to learn the languages spoken by other human beings. But on the other hand, we might say that someone is capable of understanding in virtue of already having already learned the language they need to make sense of what was said. To illustrate the difference, Kosman gives the helpful example of a sentence spoken aloud in French; a non-French speaker could understand if they were to take the time to learn, but a French speaker can understand in a way the non-French speaker as yet cannot. “Each of these two has capacity,” Aristotle insists, but each one has it “in a different sense.” The former has the capacity for understanding only passively; the latter has it actively. Only the latter can hear someone speak and actually understand. If actuality, properly speaking, refers to activity, then capacity, properly speaking, refers to this active form of the capacity to act. In a sense, passive capacities are merely capacities for capacity itself.

The opening of Book IX contains one further distinction directly relevant to Aristotle’s treatment of money and morality in the Politics and the Nichomachean Ethics. What Aristotle takes to be the specifically human dimension of capacity manifests itself in the distinction he makes between “rational” and “irrational” capacities. Capacities, after all, are principles of change. The capacities specific to rational beings, Aristotle tells us, differ from their irrational counterparts in that they are capable of producing “contrary results.” “Heat,” he writes, “can only produce heat, but medical science can produce [both] disease and health.” Irrational capacities, in other words, explain only changes that coincide with the specific way they actualize themselves. But rational capacities are explanatory whether they produce their corresponding effect or its opposite. If I am a rational being, then the principle that explains my actions is me and my capacities; they are not explained by something other than myself, something that acts on me or through me.

Aristotle is explicit that this means that every art—including χρηματιστική [chrēmatistikḗ]—is best understood as a rational capacity, because every art is a principle of change in either its artist or its object. Notably, his discussion is shot through with terms borrowed from finance. This is by no means unique to Aristotle. As Thomas Hobbes points out, and as more recent writers like Richard Seaford and Marc Shell have reminded us, the terminological distinction between reason and unreason that animates so much of Greek philosophy—between λόγος [lógos] and ἄλογος [álogos]—essentially amounts to an accounting metaphor. Like the Latin word ratio, λόγος [lógos] means, most basically, a financial report. Moreover, the word Aristotle uses when he says that every capacity is a principle of change is “μεταβλητική” [metablêtikê], a word that can mean both “change” in the sense of alteration and “exchange” in the sense of a swap of goods and services. To say that my capacities are “rational” means that I can make them the object of an account; it means that unlike an animal or a slave, I can be held accountable for what I do with them because my acts are in my possession and under my control.

What is the basis for this specifically human capacity that undergirds the more general capacity to hold myself accountable? What enables me to insist that I can claim ownership over my acts? Aristotle insists that this uniquely human capacity—the capacity that transforms my relationship to my capacities more generally—is none other than than the capacity for προαίρεσις [prohaíresis]: decision, or choice. In the Politics, he insists that we act in a way that distinguishes us from animals and slaves only when we act “κατὰ προαίρεσιν” [katà prohaíresin], or “according to deliberate decision;” likewise, in the Nichomachean Ethics, it is the “προαιρούμενον” [prohairoúmenon], or “deciding” part of ourselves that enables us to stand for the “ἀρχή” [archē] or “origin” of our actions. In keeping with its incorporation of the prefix ‘προ-,’ meaning ‘over,’ or ‘above,’ προαίρεσις [prohaíresis] specifically connotes a binding choice or a mutually exclusive decision. The humanizing power of choice, as Aristotle frames it, not only requires deliberation, it requires choosing ‘this’ over ‘that,’ selecting one possibility and foregoing another. Not unlike Hegel’s criticism of the “beautiful soul” in the Phenomenology of Spirit, it is as if Aristotle is implying that an action can be ‘mine’ just to the extent that I am capable of assuming responsibility for the price I pay to perform it.

Giorgio Agamben has called attention to the implicit tension involved in Aristotle’s claim that human freedom consists not only in the capacity to act, but the capacity to refrain from acting. “[I]t is never clear,” Agamben writes, “to a reader freed from the prejudices of tradition, whether Book IX of the Metaphysics in fact gives primacy to actuality or to potentiality.” On one level, Aristotle insists that activity is both logically and ontologically prior to capacity—that it is prior in terms of both λόγος [lógos] and οὐσία [ousía], the order of accounts and the order of things accounted for. Activity is logically prior to capacity, he argues, because any account of capacity involves an account of activity. “By ‘capable of building,’” he writes, “I mean that which can build; by ‘capable of seeing,’ that which can see; and by ‘capable of being seen,’ that which is visible.” Activity is ontologically prior to capacity, he argues, because activity is the end or τέλος [télos] to which all capacity is a means. “Men possess the art of building,” he writes, “in order that they may build, and the power of speculation that they may speculate; they do not speculate in order that they may have the power of speculation.” Aristotle is committed to the claim that capacity, or potentiality, exists—this is what distinguishes his position from a necessitarian one—but it exists only in and for the sake of the activity, or the actual.

On another level, however, Aristotle’s position commits him to the existence of capacities that will never be activated—capacities that in some sense precede their corresponding activities. In order to say that I can do something it must be the case that I can also not do it; I must be able to refrain from acting, or else what I have is not so much a capacity as a compulsion. This capacity for abstinence that accompanies every rational capacity is what Agamben will sometimes refer to as “impotentiality” in a positive register; this is his way of rendering Aristotle’s ἀδύναμια [ádúnamia], or “incapacity.” But according to Aristotle, acting on one’s capacities involves foregoing or setting aside ἀδύναμια [ádúnamia], by definition. In response to his opponents, the Megarians, Aristotle writes that “a thing is said to be capable [δυνατὸν] if it will not be incapable [ἀδύνατον] when the activity [ἐνέργεια] that corresponds to the capacity [δύναμιν] it is said to possess is realized.” As Agamben points out, this entails that the question Aristotle’s discussion forecloses is how to speak about the use we make of the very impotentiality that activity sets aside. To put it another way: Aristotle treats it as almost oxymoronic to talk about the cultivation of capacity for its own sake, a use of capacity that differs from the use of capacity as a means to act—one that may even be at odds with the latter. If my capacity to count my capacities as ‘my own’ coincides with my capacity for προαίρεσις [prohaíresis]—decision—there can be no accounting for my decision not to decide.

This subordination of capacity to act is sometimes referred to as Aristotle’s actualism. Its concrete significance becomes clearer once the problem is restated in monetary terms. If money is a means to procure things other than itself, then the pursuit of money as an end consists in deferring decisions about what, precisely, to procure with it. After all, the power of money consists in its liquidity—its promise to procure more useful things at a later date. Aristotle’s examples of unnatural wealth throughout the Politics are linked by the fact that they embody a preference for indecision over decisiveness. Midas’ gold, for instance, is useless to him because anything he spends it on will simply turn into more gold the moment he tries to make use of it; the Delphian knife is good for nothing because it is made for too many uses to excel at any one of them. If the essence of money is liquidity, then the use of money to make more money means nothing if not the use of capacity to procure capacity, diverting capacity from its τέλος [télos] in act. Aristotle’s special hostility toward usury is thus no particular mystery. In every other transaction he treats, something useful changes hands—something other than money—even if one party hopes to defer the passage from potentiality to act. In usury, “use value,” as Marx would put it, has yet to even enter the equation.

What concerns Aristotle, in other words, is what Randy Martin and Robert Meister call the “option form” of liquidity. While ‘options’ and ‘choices’ are synonyms in colloquial English, the financial instruments contemporary brokers refer to as options are valuable precisely because they allow their owners to defer decisions about whether or not to buy or sell an underlying security. In their most common form, options are promises made by one party to hold an offer open to another party until an expiration date specified by the contract arrives. This could be an offer to let the other party sell something for a specific price—a ‘put’ option—or it could be an offer to let the other party buy something for a specific price—a ‘call’ option. Either way, an option opens up a period of time—a term—in which its holder possesses, in Aristotle’s terminology, the active and rational capacity to exercise the option alongside the capacity to abstain from doing so. In legal terms, an option gives its holder the right to buy or sell something at a specific price, but not the obligation to do so. Conversely, the counterparty contracts an obligation that corresponds to the holder’s right. The holder, in other words, can exercise the option or not; as long as the option has yet to expire, the holder has yet to be confronted with the need to decide. Crucially, one can hold options even when there is no explicit contract calling them by that name, a phenomenon sometimes referred to in contemporary finance as “embedded” or “implicit” options. What Agamben calls ‘impotentiality,’ then, might better be referred to as ‘optionality.’

It is no coincidence that when Aristotle describes the mechanisms of wealth acquisition, his example is just this: an implicit option. Famously, Aristotle relates the story of the philosopher Thales of Miletus. Thales, he tells us:

was taunted with the uselessness of philosophy; but from his knowledge of astronomy he had observed while it was still winter that there was going to be a large crop of olives, so he raised a small sum of money and paid round deposits for the whole of the olive-presses in Miletus and Chios, which he hired at a low rent as nobody was running him up.¹

In other words: Thales had secured the right to make use of olive presses the following year at a price he locked in by paying the deposit—a right he also secured the right to resell. Effectively, Thales had purchased a call option on exclusive use of the presses. Notably, the value of this option lies precisely in the fact that it enables Thales to acquire a capacity he does not yet have to decide whether to act upon. If he were forced to commit to paying not only the deposit but the prearranged price in full, he would be exposing himself to substantially greater risk if his astronomical predictions were to fail to come to fruition. And if he were to wait until the following year to buy and resell the use of the presses, he could not have so easily secured a favorable price. For Thales, the value of the option, at least until it expires, is tied to the value of indecision; it is tied to the value of having capacities he may never enact.

There is a limit to indecision, of course. Eventually, an option expires. If its bearer cannot find a way to roll it over and buy more time, it will collapse into a choice. Thales, in this example, must either purchase the use of the presses or let go of his deposit. And in context, this is precisely Aristotle’s point. The value of an option, his example implies, coincides entirely with that of its underlying security. Options, like money, promise the power to procure things other than themselves. Their value is uncertain until they expire and the promise embedded within them bears fruit. Only then does one learn what one can get by exercising them, because only then does one discover what the underlying has turned out to be worth.

Aristotle’s objection, in other words, is not that unnatural forms of χρηματιστική [chrēmatistikḗ] aim at acquiring things intended to be sold and resold, dissociating what Marx would call “exchange values” from “use values”—at least not directly. His more fundamental objection is that they embody a preference for liquidity. What the forms of wealth-getting he deems unnatural have in common is that they all aim at accumulating the capacity to defer any decision that would commit one to use their money to purchase one thing at the expense of another. 

Hegel, for his part, has a term for this as well: he calls it a “bad infinity.” Both insist that a preference for indecision promises freedom, but delivers only its opposite. For Aristotle, to make oneself too familiar with the art of acquiring wealth is to cultivate expertise in means over ends and to allow one’s ends to be dictated by the pursuit of means—a process of habituation, he warns his readers, that risks altering one’s own nature and making oneself fit for slavery. For Hegel, the will that associates indeterminacy with its freedom is itself a one-sided and unfree will; it is a will that has yet to comprehend that its freedom consists not only in the capacity to withdraw from determinate ends, but in the capacity to determine its ends as its own. Aristotle, of course, could not have agreed with Hegel that time—a metaphor for labor—is what is ‘counted’ by money, because he was not seeking an absolute ground for value in the first place. The ends-oriented character of use, for Aristotle, renders it irreducibly positional. Nevertheless, he is committed to the idea that money buys its bearers time. People pursue money for its own sake because they hope to keep their options open. They take this capacity—this optionality—to be worth something irreducible to the goods and services money can buy. By distinguishing between real and illusory forms of wealth, Aristotle seeks to demonstrate that there is no use delaying the inevitable; the pursuit of money for its own sake offers only false promises.

1. Aristotle, Politics 1259a9-13.