On January 15th, 2010 there was an article in the CNN about JPMorgan Chase earning profits in its 4th quarter. The company’s books showed $3.3 billion in profit. The company said it earned a good amount of profit in the last 3 months of the year 2009, an earning .74 cents per share, which was much better than the expected 61 cents per share. This shows how the banking sector is regaining from the harsh recession that the world saw. Large profits of the company were obtained from the investment banking business, which earned $ 1.9 billion.
The main idea for the company was to invest money and lend money. They are using money to make money. The main motive of the company is to earn profits for the investment and lending. This shows how the banking sector after touching the ground is rising up.
Aristotle here is against the ideology of money making money which the company does by investing and lending. Aristotle thinks of it as an unnatural art of acquisition which is usury. Banks invest money and lend money as loan at a fixed amount of interest which is the money making money concept. Aristotle thinks that the company should have a limit on the profit that it makes and to earn only the amount that would help the company to fulfill its basic necessities. Aristotle thinks that the concepts the banks are using to earn profit is wrong and have made profit earning and money making their top priority and they are devoted to money. Aristotle thinks that the banks forgotten the meaning of money.
I think Aristotle's ideologies cannot work in the current world we live in. He is against the money making money concept which the banks are following. Which I think is incorrect. The banks that lend the people money on interest are providing a service to the people and through which the people can fulfill their requirements. I believe that the banks or any other sector should acquire as much as they can, so that when there are bad times the accumulated wealth can help them survive. There is nothing wrong in acquiring money ethically. The banks on the other hand are providing services of loaning money to people which helps keep a flow of money in the market which helps the economy to rise. I disagree with Aristotle's ideology of Money because it limits growth which is necessary to survive.
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I find it quite interesting that while our economic recovery is still on its knees so to speak, JP Morgan and other banks profits continue to increase. I do agree with you that in the company investing money to lend money, there are some money making money practices in play. In this case I would actually argue on the defense of Aristotle. I think Aristotle would take exception to "acquiring as much as you can to accumulate wealth" because money should only be used as an instrument to assist in acquiring the things you need to live a suitable or good life. I don't agree that trying to get as much as you can for "bad times" is a good idea. I do however believe that this way of thinking has led to the deficit and recession of our country today. If individuals whom acquired wealth actually shared the excess of what they didn't need, instead of greedily holding it for their own personal interest, our economy as a whole would be in a better position.
ReplyDeleteI do agree with your disagreement of Aristotle's ideology of money, but for different reasons. I think that just calling Aristotle's ideas outdated is not sufficient in arguing against them. The idea of usury or the idea of making as much profit as possible is not unnatural. I do not believe that there is a limit to how much money a person should make. Just because someone focuses on the art of acquisition of making as much money as they can doesn't mean that they are fetishizing money. I believe that striving to make as much profit as possible is only securing your ability to provide necessities to yourself and creating opportunities in which you can live well.
ReplyDeleteI also agree with your disagreement of Aristotle's ideas about money. I actually posted the same story on my blog. I focused mostly on the fact that a ton of money is going to be used for bonuses. I agree that the money should be used as a reward toward the employees that created such a large profit so far this year. However, I agree with you that Aristotle would not agree.
ReplyDeleteI agree with you when you argue Aristotle's belief of usury, or money making money. If money did not make money, then we would not have the sophisticated monetary systems we have in the modern times. For example, shareholders would not exist and therefore large companies and corporations (ethical and unethical) would not have investors to help support their businesses. So if money could not make money, we as a capitalist society would never have come to happen. But would that have been a good thing or a bad thing?
ReplyDeleteI agree with that the fact that this is against Aristotles model of a perfect society of more primative transactions. The case of these banks making money now is there they are the small exception, or they have written off the large ammounts of debt that had incurred through the bad mortgage erra. It also helps when the Fed has lowered there interst rates and when americans and the internation community is finally regaining a bit of confidence in the financial institutions.
ReplyDeleteI agree that times have changed and that Aristotle's ideas do not completely apply to modern times. Money making money is in the best interest of all people. If money didn't make money there wouldn't be enough money to go around. The creation of wealth is imperative to the growth of economy and as a result individual success. Wealth creating wealth creates opportunities for all, its when too much wealth is controlled by certain individuals.
ReplyDeleteI do agree with you that Aristotle's ideologies would not work in today's society. Banks in order to work need money to make money. I was also thinking about the bonuses that people complain about so much. Should there be bonuses or not for bankers? I think that they should be given. Bonuses act as an incentive. People need incentives to work. If there were no incentives then people will not work hard to achieve more pay, more opportunities, etc. With that said, I believe that bonuses should be given based on productivity and not on expetation.
ReplyDeleteI think Aristotle should be more practical and less ideological when talking about usury. I don't see anything wrong with usury. To me, it's just paying a fee for someone who borrowed you money so that you can invest in something else. And in return, you can make money too. I think this is how business works and how money should circulate.
ReplyDeleteHi Bridjesh, Yes you and i have very similar topic about banks concept of money making money. I agree with you that Aristotle's ideology cannot work in the world we live in today. The only way a bank can earn its profits is by interest from lending loans. if this process was not possible then there would be no such thing as a "bank" nor would there be anything for us to look forward to because without loans many people cant do much.
ReplyDeleteThe example of today's banking system that you use to present Aristotle's ideology in contrast with the evolution of society, is a classical example.
ReplyDeleteOf course banks make money from money, because that's what they do for a living. I agree though, that in Aristotle's view, banks should just make enough money to satisfact their needs, and not have an unlimited amount of cash pouring in.
The truth is, as you said, that in today's society, Aristotle's point of view is not the most effective form of conducting business, especially if you own a bank.
I do agree that the banks should be allowed to make as much money as it can, which obviously goes against Aristotle's ideology. But I also believe that the greater good is still not being served in respect to the lending of money to those individuals needing to sustain their every day living needs. Most Americans are not afforded the opportunity or are not in the position to receive a loan that possibly could help the overall process of restoring the economony.
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