He is also more explicit than the other Greek theorists on the function of money. He clearly recognizes the two functions noted by Plato,681 but he deals with them in a much more detailed manner. His discussion grows out of his theory of distributive justice presented in the Ethics.682 Money was introduced as the exchangeable representative of demand (ὑπάλλαγμα τῆς χρείας),683 since diverse products must be reduced to some common denominator.684 It is thus a medium of exchange, acting as a measure of all inferior and superior values, by making them all commensurable (συμβλητά).685
The other important function of money recognized is as a guaranty (ἐγγυητής) of future exchange. It represents the abiding, rather than the temporary, need, and is thus a standard of deferred payments.686 The importance of money in the fulfilment of these functions is great, in the opinion of Aristotle. The possibility of fair exchange, or indeed the very existence of organized society depends upon it.687
He is also clearer than Plato and Xenophon in his definition of the relation between money and wealth. He severely criticizes the current mercantilistic theory of his day, which identified wealth with a quantity of current coin (νομίσματος πλῆθος).688 He immediately follows this, however, with a more extended presentation of the opposite error of the Cynics, that money is mere trash (λῆρος), depending for its value entirely upon convention (νόμῳ). This theory, he points out, is based on the fact that, if money ceased to be recognized as legal tender, it would be useless; that it satisfies no direct necessity; and that one might starve like Midas, though possessed of it in superabundance.689