Aristotle believes that money should not be saved. Gaining interest on money is wrong. Money was meant to be spent, used to buy property to build a household. Banks today take advantage of people's money. Making profit off of the money people put away to save to create a better life for their family and household is not what money was intended to be used for. Another big point made by Aristotle in his books is the idea of greed and how property should be common for the good of the community. This meaning that we should share our riches; use what we gain to help others less fortunate.
JP Morgan Chase is one the banks profiting higher this year then in previous years. This can be surprising considering the circumstances of the economy today. Where unemployment rates are high and many markets are in jeopardy, how are banks getting so much money? What are they doing with their high profits? JP Morgan Chase plans to pay out the money in bonuses. So the money they are gaining off of ordinary people they are giving it back to themselves. According to Aristotle this would be considered wrong. This is the wrong use for money and it is not helping the community. Aristotle believes that people should use their profits to better the community, what the banks are doing is not that. JP Morgan is just the first bank to report these profits. This is only the beginning but will any of the banks use their profits to better the community or will they all pay out their profits to themselves in bonuses?
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I believe when we begin looking at the issue of interest is a hard one to pin down in black and white. On one hand the bank is making money off of the people who deposit their money into a bank account, but on the other hand shouldn't they get paid for offering a service? Think about it. If banks didn't do their job, we would have to keep and walk around with money in order to do our transaction. Having a credit or a debit card through a bank, allows for convenience, and that convenience should be rewarded in my opinion. However with bonuses, is an entire different ball game. Banks have misused their power which put them at a huge disadvantage and caused our economy to go down severely, and ultimately having to be saved by the tax payer. At this time, all their resources should be focus on repaying some of that money, not fattening up even more the pockets of bankers. Aristotle would be disappointed to say the least, if he knew what goes on with the economy and the obsession with money.
ReplyDeleteI completely agree with you that Aristotle would find the whole concept of modern day banking sickening. Although banks do make a profit off the money that we contribute to our savings accounts with them, we also make money in the form of interest by agreeing to have a savings account with them in the first place. That is the exchange, and it seems like a pretty fair trade-off. But given that our economy, the whole world economy for that matter, is based on debt and loans and interest, does anything Aristotle have to say really even matter? What I mean is can any of his economic philosophy actually be applied today and expected to succeed.
ReplyDeleteMaybe in Aristotle’s time people worked until they died and never had any need for a savings account, and therefore the whole concept of banking was irrelevant, and it was possible to live in a world without usury. But today, people live longer and have to support themselves long after their careers are over. As Aristotle would argue, money exists as a symbolic form of exchange. Well, if you have no money, you cannot exchange anything. So where do you put it once you have it? A bank. Why? Your money is insured up to a certain amount and you can access it whenever you need to. It is safe and easy. However, it earns interest. So it seems the only way to get around making money off money seems to be stashing cash under your bed or burying it in your backyard. But because we as a society have deemed that those ideas are pretty stupid, banks exist. And as long as banks must exist, why should they not make a profit?
Now it appears the ethical issue is what the banks do with their immense profits. Is it really wrong that they pay those people who make lots of money for them lots of money in bonuses? Let’s not forget that J.P. Morgan Chase is paying probably close to 40% of their income to taxes, if not more; taxes that go to support everyone, especially the less fortunate, throughout the country. Now take the execs who receive the massive bonuses. They are taxed close to 40% on their income as well. For example, J.P. Morgan Chase makes $100 of which they only retain $60. Then let’s say they pay half of that out in bonuses. So the execs take home 60% of $30, or $18. This means that $40 plus $12, or $52 of every $100 that J.P. Morgan Chase makes is paid to the government in the form of taxes. So when you really think about the numbers, to say they are taking taxpayer’s money, absconding with it, and hiding it away in some tower never to be shared with anyone ever again seems somewhat silly. Though Aristotle would probably loathe big business, especially those entities in the financial sector, I think he might agree that they share plenty of their fortune with the less fortunate.
I agree that the idea of interest is problematic especially in times such as these. Increasing interest rates only hurt the community while banks are reaping the benefits off of people who really can't afford them.
ReplyDeleteI believe Aristotle has the right idea that people in the banking industry should not be profiting for the sake of profit.I also agree with Tatiane that banks often misuse their amount of power and I feel like it is the people that suffer because of it.