Aristotle, Nicomachean Ethics
H. Rackham, Ed.

if they cannot, they feel they are in the position of slaves—and to repay good with good— failing which, no exchange takes place, and it is exchange that binds them together. [7] This is why we set up a shrine of the Graces in a public place, to remind men to return a kindness; for that is a special characteristic of grace, since it is a duty not only to repay a service done one, but another time to take the initiative in doing a service oneself. [8]

Now proportionate requital is effected by diagonal conjunction. For example, let A be a builder, B a shoemaker, C a house, and D a shoe. It is required that the builder shall receive from the shoemaker a portion of the product of his labor, and give him a portion of the product of his own. Now¹ if proportionate equality between the products be first established, and then reciprocation take place, the requirement indicated will have been achieved; but if this is not done, the bargain is not equal, and intercourse does not continue. For it may happen that the product of one of the parties is worth more than that of the other, and in that case therefore they have to be equalized. [9] This holds good with the other arts as well; for they would have passed out of existence if the active element did not produce, and did not receive the equivalent in quantity and quality of what the passive element receives.² For an association for interchange of services is not formed between two physicians, but between a physician and a farmer, and generally between persons who are different, and who may be unequal, though in that case they have to be equalized. [10] Hence all commodities exchanged must be able to be compared in some way. It is to meet this requirement that men have introduced money; money constitutes in a manner a middle term, for it is a measure of all things, and so of their superior or inferior value, that is to say, how many shoes are equivalent to a house or to a given quantity of food. As therefore a builder is to a shoemaker,³ so must such and such a number of shoes be to a house, [or to a given quantity of food]⁴; for without this reciprocal proportion, there can be no exchange and no association; and it cannot be secured unless the commodities in question be equal in a sense. [11]

It is therefore necessary that all commodities shall be measured by some one standard, as was said before. And this standard is in reality demand, which is what holds everything together, since if men cease to have wants or if their wants alter, exchange will go on no longer, or will be on different lines. But demand has come to be conventionally represented by money; this is why money is called nomisma （customary currency）, because it does not exist by nature but by custom （nomos）, and can be altered and rendered useless⁵ at will. [12]

There will therefore be reciprocal proportion when the products have been equated, so that as farmer is to shoemaker,⁶ so may the shoemaker's product be to the farmer's product.