Book IV begins with an extremely long chapter that I will break into two parts. It has to do with the first of the 'spending virtues,' liberality. Now the word implies that one is bountiful and generous, but of course for Aristotle it is meant to be the mean between the extremes. Thus, the normal, natural position of a person should be generosity:
Let us speak next of liberality. It seems to be the mean with regard to wealth; for the liberal man is praised not in respect of military matters, nor of those in respect of which the temrate man is praised, nor of judicial decisions, but with regard to the giving and taking of wealth, and especially in respect of giving. Now by 'wealth' we mean all the things whose value is measured by money.
This might be surprising, especially for those who were raised to think of thrift as a virtue. However, it is the magic of the spirit behind capitalism that free exchange causes a flourishing that increases the wealth of all. Hoarded wealth does nothing, like the dragon's gold in the Beowulf that simply laid hidden in the earth for generations, doing no one any good. It's the exchanging that creates flourishing. If I take some of that wealth and spend it to hire an artist, my world now has beauty; if I pay for a meal, it has good food. The artist and the cook now have money they can spend to improve their lives and to yield to others the ability to improve theirs also.
This is a fecund understanding to have come from the ancient world, which was in positive terms much poorer than we are today. Even so, they already had the spirit of it: generosity is the natural position, the mean for which we should strive.
It is also surprising to hear prodigality discussed outside the Biblical context: the story of 'the prodigal son,' which frames our understanding for more than two centuries, was not available to Aristotle.
Further, prodigality and meanness are excesses and defects with regard to wealth; and meanness we always impute to those who care more than they ought for wealth, but we sometimes apply the word 'prodigality' in a complex sense; for we call those men prodigals who are incontinent and spend money on self-indulgence. Hence also they are thought the poorest characters; for they combine more vices than one. Therefore the application of the word to them is not its proper use; for a 'prodigal' means a man who has a single evil quality, that of wasting his substance; since a prodigal is one who is being ruined by his own fault, and the wasting of substance is thought to be a sort of ruining of oneself, life being held to depend on possession of substance.
This, then, is the sense in which we take the word 'prodigality'.
Thus prodigality is properly wasting one's substance, which means spending beyond what one can continue to support. It is not spending generously, but excessively.
Now the things that have a use may be used either well or badly; and riches is a useful thing; and everything is used best by the man who has the virtue concerned with it; riches, therefore, will be used best by the man who has the virtue concerned with wealth; and this is the liberal man.
Next Aristotle assigns responsibility in a way that may seem surprising. The payer is the virtuous one, he says; giving well is what is covered.
Now spending and giving seem to be the using of wealth; taking and keeping rather the possession of it. Hence it is more the mark of the liberal man to give to the right people than to take from the right sources and not to take from the wrong. For it is more characteristic of virtue to do good than to have good done to one, and more characteristic to do what is noble than not to do what is base; and it is not hard to see that giving implies doing good and doing what is noble, and taking implies having good done to one or not acting basely. And gratitude is felt towards him who gives, not towards him who does not take, and praise also is bestowed more on him. It is easier, also, not to take than to give; for men are apter to give away their own too little than to take what is another's. Givers, too, are called liberal; but those who do not take are not praised for liberality but rather for justice; while those who take are hardly praised at all. And the liberal are almost the most loved of all virtuous characters, since they are useful; and this depends on their giving.
Certainly a great deal of poetry has been written for 'the generous prince!' who bestows with a glad hand. Whether or not they are truly beloved, they are certainly greatly appreciated: generous tippers are always well-received in their favorite watering hole.
That said, taking is also an action that should have a mean and extremes. It's easy to imagine what one of those latter might be when Aristotle says, "not to take from the wrong [sources]." Avoiding corruption or extortion is surely some kind of a virtue, even if it is not the one presently under discussion. Even organized crime sometimes protects widows and orphans, or at least forbears to extract wealth from them given their weakened position; and even if they don't, we tell stories about them that show that we would honor it if they did. The Godfather II has such a tale in one of its flashback sequences. The Robin Hood stories are full of tales like that; the Bible has parallel verses. Aristotle will fold it into the virtue later, but briefly and as a small matter; I think it probably deserves greater and independent consideration.
Now virtuous actions are noble and done for the sake of the noble. Therefore the liberal man, like other virtuous men, will give for the sake of the noble, and rightly; for he will give to the right people, the right amounts, and at the right time, with all the other qualifications that accompany right giving; and that too with pleasure or without pain; for that which is virtuous is pleasant or free from pain-least of all will it be painful.
"A workman is worthy of his hire," as we are told, and it does feel good to pay a family-owned business in such a way that will enable the flourishing of the family. It feels good to tip generously. It is part of what it is to have a noble character. In America, where social equality has some purchase, we expect the tipped worker to tip generously too -- and they probably do! Nobody tips better than a bartender visiting his friend's bar.
But he who gives to the wrong people or not for the sake of the noble but for some other cause, will be called not liberal but by some other name. Nor is he liberal who gives with pain; for he would prefer the wealth to the noble act, and this is not characteristic of a liberal man.
As mentioned, Aristotle folds 'not taking wrongly' back into the virtue to some degree.
But no more will the liberal man take from wrong sources; for such taking is not characteristic of the man who sets no store by wealth. Nor will he be a ready asker; for it is not characteristic of a man who confers benefits to accept them lightly. But he will take from the right sources, e.g. from his own possessions, not as something noble but as a necessity, that he may have something to give.
Also, some degree of thriftiness gets folded back in -- not for the wrong reasons, but just in order to preserve one's capacity to give generously in the right cases.
Nor will he neglect his own property, since he wishes by means of this to help others. And he will refrain from giving to anybody and everybody, that he may have something to give to the right people, at the right time, and where it is noble to do so. It is highly characteristic of a liberal man also to go to excess in giving, so that he leaves too little for himself; for it is the nature of a liberal man not to look to himself.
Relative wealth is also considered.
The term 'liberality' is used relatively to a man's substance; for liberality resides not in the multitude of the gifts but in the state of character of the giver, and this is relative to the giver's substance. There is therefore nothing to prevent the man who gives less from being the more liberal man, if he has less to give those are thought to be more liberal who have not made their wealth but inherited it; for in the first place they have no experience of want, and secondly all men are fonder of their own productions, as are parents and poets.
Here also as we have seen throughout this session, there are Biblical parallels even though there are not ties between Aristotle and the Bible; that section above might make one think of the parable of the Widow's Mite. The independence of the systems suggests the value of such lessons, which were arrived at through different means yet the conclusions are often the same.
It is not easy for the liberal man to be rich, since he is not apt either at taking or at keeping, but at giving away, and does not value wealth for its own sake but as a means to giving. Hence comes the charge that is brought against fortune, that those who deserve riches most get it least. But it is not unreasonable that it should turn out so; for he cannot have wealth, any more than anything else, if he does not take pains to have it. Yet he will not give to the wrong people nor at the wrong time, and so on; for he would no longer be acting in accordance with liberality, and if he spent on these objects he would have nothing to spend on the right objects. For, as has been said, he is liberal who spends according to his substance and on the right objects; and he who exceeds is prodigal.
There is also a small political point here:
Hence we do not call despots prodigal; for it is thought not easy for them to give and spend beyond the amount of their possessions.
By the same token, socialist systems cannot be liberal in this sense of the word. They do not easily spend beyond their grasp because their grasping hands seize whatever they think they want to spend.
Liberality, then, being a mean with regard to giving and taking of wealth, the liberal man will both give and spend the right amounts and on the right objects, alike in small things and in great, and that with pleasure; he will also take the right amounts and from the right sources. For, the virtue being a mean with regard to both, he will do both as he ought; since this sort of taking accompanies proper giving, and that which is not of this sort is contrary to it, and accordingly the giving and taking that accompany each other are present together in the same man, while the contrary kinds evidently are not. But if he happens to spend in a manner contrary to what is right and noble, he will be pained, but moderately and as he ought; for it is the mark of virtue both to be pleased and to be pained at the right objects and in the right way. Further, the liberal man is easy to deal with in money matters; for he can be got the better of, since he sets no store by money, and is more annoyed if he has not spent something that he ought than pained if he has spent something that he ought not, and does not agree with the saying of Simonides.
"Alike in small things and in great," but there is a separate virtue for the really great expenditures ("magnificence," which we will come to directly). This is only half of chapter 1, so there remains quite a bit more to be said about liberality.
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