The definition of trade

Chapter II The definition of trade In order to proceed in the natural order, we will first determine what trade is – as Cicero would prefer – because if we aim to have a true understanding of something, we must begin with a definition. Since our subject matter is trade, before anything else, we will clearly distinguish between the term “merchandise” and “trade” , in order to avoid any possible ambiguity that might arise on the part of the less educated traders involved in this discussion. The term “merchandise” is applied to everything that can be sold, bought or exchanged, or that can be bargained over in any way. The term “trade” refers to a skill, or better yet, a set of regulations, provisions and the organization within which all the business involving the above mentioned merchandise is conducted. Now that we have clarified that the term “merchandise” covers everything that can be the subject of a contract between traders, we will move on to the definition of trade: “T rade is a skill or a set of rules by which legal persons are to fairly abide by in trading affairs, with the purpose of preserving human kind and with the hope of personal gain.” This definition provides the fundamental notion around which this work is to be structured, and hence I believe this definition should be analyzed further, detail by detail. In addition, it should be noted that we believe this definition to be perfect because it describes trade in both general and

specific terms. The general aspect is mentioned as “a skill or a set of rules” , which indicates that there are established regulations with a single purpose. That which is specific to trade is contained in the remainder of the definition. The definition is to be analyzed as follows: Persons who are not legal persons are those who are forbidden by law to engage in trade. These are: Firstly, persons who are not allowed to practice this skill because of the harm that can be inflicted either on themselves or their reputations, or because they are forbidden to do so. The persons bound by this rule are kings, dukes, barons, knights and other nobility who are forbidden from trading based on civilian law which requires that: “Those bestowed the rank of a noble...” , according to Justinian code, as above. Those who are born into nobility, whose fortune is large and are reputable for their honor, are forbidden to engage in trading affairs for it would harm the towns. They are also banned in order to ensure that trade between the tradesman and the common man is carried out with no hindrance. Moreover, men of cloth are also bound by this rule. This is a teaching of Paul the Apostle in his Second Letter to Timothy: “No man that warreth entangleth himself with the affairs of this life; that he may please him who hath chosen him to be a soldier.” In addition, St. Jerome states in paragraph 91: “ A clergyman who engages in business, and who rises from poverty to wealth, and from obscurity to a high position, avoid as you would the plague.” People belonging to these ranks must not engage in trade because of the positions of dignity they hold.

Persons who are not of noble rank but are nevertheless not considered legal persons are those with a fault, either of character or body, or their merchandise has a flaw. Y oung boys who have not yet come of age or are orphans under somebody’s custody are considered inadequate and incompetent in terms of character; then there are those who have been deprived of their freedom, those who are frantic, spendthrifts, and other ignorant and simple folk. Others are unqualified in the sense that their merchandise is not faultless, as is the case with thieves, robbers, forgers, alchemists and others of a similar kind. By fairly we imply that the merchandise is bought and sold at a fair price or somewhere in the neighborhood of a fair amount. Generally, the contract is not binding by law, especially in the case when the set price exceeds the fair price by one half of the fair amount. The issue of fairness is broadly discussed later. X, question II. The term trading affairs does not refer to things that cannot be the subject of the trade agreement, such as sacred items, pledges, deposits or stolen items. The sale of poisonous substances, items intended for gambling activities and similar is prohibited to anyone and at any place. If something is bought for one’s personal use or for one’s family, or with the intention of being a gift for someone, this is not considered as trade. The words preserving human kind are not mentioned without a valid reason. Even though the initial purpose of trading was to mutually exchange those goods that some people lacked and some had in abundance, and as a consequence money was

introduced, that which has its source in Nature always has the purpose of preserving human kind. After this purpose was fulfilled, the traders’ goal was personal gain. A similar shift occurred in the way clothes have been used. Originally, clothes were basically thick, crude materials with the sole purpose of covering the body and protecting it from cold and heat, rain, snow, ice and anything else that could inflict harm on it. However, when this was no longer a priority because human needs in that respect were met, the manufacture of beautiful, ornamented clothes began. Luckily, this is still the case today. The same is seemingly true when we consider that trade evolved so that human needs could be met. As centuries went by, it became so beneficial for traders that they came up with numerous wonderful new things, which is hard to believe for someone who himself is not a good trader. This will be discussed in one of the following chapters. Hope of personal gain is also included to make it clear that even though the original purpose of trading was to meet certain needs of human kind, after money was introduced the traders’ profits increased. Consequently, this became the principal reason why most men became involved in trading, with the exception of those who sold items out of necessity, or purchased them for home use or for other purposes, and not for resale. Mind you, these were, in fact, the two main trading activities, but nevertheless, persons involved in such activities could not be referred to as traders because their goal was not the goal of trade, meaning, the profit for all those engaged in it. This is what Aristotle meant when he wrote in Economics that the goal of the trader is “making profit and amassing wealth” .