Chapter 3. Demography, Walter Scheidel

Walter Scheidel's estimates of levels and trends in Roman population and urbanization, which rely on state of the art techniques, are the best available. My reservation concerns Scheidel's default Malthusian view of the consequences of population growth for economic development (pp. 51, 55, 64–66, and 72). Scheidel does discuss economic models wherein increases in population increase the number of inventions and, by increasing market size, encourage the adoption of previously uneconomic technologies (pp. 52–53). He suggests, however, that these kinds of effects are “at best dimly perceptible for ancient economies” (p. 53). Presently, this observation applies also to diminishing returns to labor.

Chapter 5. Law and Economic Institutions, Bruce W. Frier and Dennis P. Kehoe

Bruce W. Frier and Dennis P. Kehoe demonstrate with well-chosen examples the applicability of the New Institutional Economics to a wide range of problems in Greco-Roman law and economy. For example, they apply the Coase Theorem to the problem of the cheese factory described by a Roman jurist. They might also have analyzed a regulation attributed to Solon (archaic Athens) concerning the planting of trees close to a neighbor's field.

Chapter 7. The Aegean Bronze Age, John Bennet

John Bennet reaches several important conclusions from an analysis of clay tablets inscribed in an early form of Greek (“Linear B”). In 1400–1200 BCE “palaces” resembling those in contemporary Mesopotamia dominated the economies of mainland Greece and Crete. The leading decision maker in palatial production is titled wanax, which Bennet renders as “king.” This Mycenaean economy was characterized by “redistribution” in which goods flowed in to the palaces and then out again or more accurately by “mobilization” in the interests of “elites” (p. 190; Astrid Möller, p. 370). Palaces did not produce pottery, pulses, and fish and the grain produce registered in the tablets falls well short of the likely total production of the surrounding territories (p. 196). Individuals called “collectors” owned workshops for producing cloth and perfumed oil (p. 195). References to “land of the damos” (“community”?) prove that palaces did not own all the land (pp. 193–94). Bennet applies the term “command economy” to the palaces in view of their “dominance” and “the paucity of texts indicating equivalence transactions” (p. 206).

Several responses are in order. First, it is not self-evident that there were behavioral differences between Mycenaean palaces and profit-oriented firms. Mesopotamian palaces participated in markets and they look like they were motivated by profit (Stephanie Dalley, Mari and Karana: Two Old Babylonian Cities. London: Longman, 1984: 14.) Second, the share of a Mycenaean palace in total regional production might be small. If so, it is not clear what it means to speak of a palace as a “command economy.” Third, notwithstanding their “paucity” the inclusion of explicit notice to tablets suggesting market participation would have been helpful. (References are available from the reviewer upon request.) In judging the frequency of “equivalence transactions,” it is not clear whether Bennet has accounted for tablets showing that some/many producers were paid with plots of land and flocks of sheep for serving the palaces (pp. 194–95, 198–99). Finally, the palaces might be visualized as relatively large, vertically integrated firms (“command economies”). It would be interesting to examine the records of the old General Motors or Ford Motor Company to ascertain the proportion of transactions representing internal transfers of resources (“redistribution/mobilization”) and the proportion representing market transfers (“equivalence transactions”). The causes of the decline of the palaces and the ensuing economic recovery are unclear (Ian Morris).

Chapter 10. Archaic Greece, Robin Osborne

Robin Osborne draws out the implications of limited evidence, especially from surviving pottery. Perceptible differences in the decorations of Corinthian and Spartan pottery or in the shapes of Athenian at different sites are indicative of marketing decisions (pp. 285, 289, 290). Also, use of amphora markings (e.g., “SOS”) enable “brand recognition” of olive oil (pp. 285–86). The economic significance of the observed pattern in marketing pottery points to the spread of information, which enabled specialization and efficiency gains. “This applies not simply to manufactured goods, like pots, but also agricultural products and particularly to those which are processed” (p. 291).

Chapter 11. The Persian Near East, Peter R. Bedford

Peter R. Bedford surveys research on (the absence) of deposit banking, the innovative role of private firms such as the Egibis, new contractual forms, and taxation/tax rates. Bedford suggests: “The price of labor, for example, was not determined by the market…. Hired labor in Babylonia entered into a contract with an employer and for laborers compensation seems to have been tied to daily food needs. Specialized craftsmen could receive higher payments. It is likely that we should understand hired labor in the context of the redistributive economy rather than the market economy” (p. 325). It may be doubted that specialized craftsmen had greater daily food needs than unskilled workers. If they did not and markets were absent it is difficult to understand why payments to the skilled were higher than to the unskilled. Elsewhere, Bedford remarks: “With respect to land, it could be sold if privately owned…but there is no evidence of a speculative land market or borrowing in order to invest in land” (pp. 325–26). This finding is rather surprising. Did lenders monitor borrowers and refuse to grant loans to those whom they thought might purchase land and later resell it? Or had the idea to engage in this kind of speculative transaction simply not occurred even to experienced businessmen such as the Egibis? Xenophon, of course, tells of an individual who purchased uncultivated farms, improved them, and then sold them (Oecononomicus 20.22–6; cited by John K. Davies, p. 361). But this is classical Athens not Persia and Xenophon does not say the individual used borrowed funds to implement his business plan. On the other hand, he does not say this businessperson relied entirely on his own funds.

Chapter 12. Classical Greece: Production, John K. Davies

John K. Davies concludes that in classical Greece (mainly Athens), a land market was a “normal” aspect of the economy and that a market for free labor, however “constrained” (pp. 351, 352) was present as well. Davies refers to “free movers” who comprised “a significant flow of skilled labor within Greece which came to concentrate especially in urban centers like Syracuse, Corinth, and Athens” (p. 359). With respect to crop specialization, Davies tells that land surveys suggest there was little cultivable land to spare (p. 379), that cereal production was “seriously inadequate requiring regular imports” (p. 343) and also that a “surplus” of olive oil was produced “which might be exported” (p. 343). Why did farmers produce olive oil when the grain supply is “seriously inadequate” and the two crops competed for the same soil? (Sitta Von Reden, p. 392). Davies does not answer that Greek cultivators raised their living standard by choosing to produce and market olive oil and then using the proceeds to purchase wheat from the Black Sea or Sicily (see explicitly Möller, pp. 362–63, 373 and Von Reden pp. 392–93, 404–05; cf. Robert Sallares, pp. 27–34 and Jean-Paul Morel, p. 506). Davies observes, “the extent to which the variety of interest-bearing and interest-free lending mechanisms facilitated gainful activity (as against lubricating social obligations) before the Hellenistic period remains an unresolved and contentious matter” (p. 355). This is an accurate summary. In the reviewer's judgment, much of the contention results because scholars have been more concerned with dividing total lending between “productive” and “unproductive” loans than in relating “productive” (nonconsumption) loans to capital formation. It may be suspected that much of Athens' overseas trade was financed by maritime loans (Davies, p. 360; Demosthenes 34.51).

Chapter 14. Classical Greece: Consumption, Sitta Von Reden

Sitta Von Reden examines land survey and other evidence for trends in housing, farm size, and gains in Athenian living standards from importing wheat (pp. 399–402, 403–05). Seeking to extract more information from limited evidence, she suggests: “Clothing, housing, and heating take up a much smaller proportion of the living costs of a preindustrial household than nutrition, but given they are more income elastic, they are a particularly good guide to standards of living” (pp. 396–97; for additional innovative uses of price data, see Robertus J. Van Der Spek). Also, Von Reden provides valuable evidence relevant for evaluating the economic status and prevalence of “peasants” in classical Athens. “Arguably…the average size of an Attic farm sufficed for a relatively prosperous life. It has been calculated that a family farm with a cultivable area of about six hectares afforded, even under a system of bare fallow, subsistence for a family of five. In Lohmann's survey of Atene [an Attic deme], farms of this size are among the smallest. Hence most farms had significantly more than six hectares of land and there is no evidence of farms operating below subsistence level” (p. 401). This evidence shows that most farms were operating well above the subsistence level.

Chapter 16. Hellenistic Egypt, Joseph G. Manning

Joseph G. Manning's discussion of Ptolemaic taxation policies is detailed and informative. He confirms the presence of “widespread private holding of land in the south [of Egypt]” (p. 443). Ptolemaic land ownership was concentrated in the Fayyum depression, which was, “The one place in Egypt that was susceptible to reclamation and intensification on a significant scale…” (p. 447). Similarly, in the fourteenth century BCE when Akhenaten constructed the city of Amarna, the ruler justified his claim by noting simply that the territory was unowned and unused. (William J. Murnane and Charles C. van Siclen III. The Boundary Stelae of Akhenaten. London: Kegan Paul, 1993: 37–38.) Manning suggests, “The historically low price of land, a low multiple of the value of a year's harvest, is another indication of the limited ‘market alienability' of land—it was the rights to the income from the land (‘economic rights') rather than individualized ‘legal rights' to the land itself that were ‘owned'” (p. 449). However, there is clear evidence of legal alienation of land by means of an instrument called “house document.” (See, for example, Tom Logan, “The jmyt-pr Document: Form, Function, and Significance.” Journal of the American Research Center in Egypt 37 [2000]: 49–73). Further, the postulated connection between the “low price of land” and “limited market alienability” requires argument. If the price of arable land was “low,” one might look for an explanation in terms of an ample supply of land relative to labor power. Indeed, Manning believes, “The shortage of labor applied to the land was a serious long-term problem” (p. 449).

Chapter 18. Early Rome and Italy, Jean-Paul Morel

Jean-Paul Morel discusses central Italy's specialization in wine and oil and the export of these commodities mainly to the west in amphorae numbering in the “tens of millions” (p. 507). Another major Italian export is “mass-produced” utilitarian kitchenware (pp. 507–08). (Morel seems to deny that molds were used to mass-produce the exported pottery, but molds made in Arezzo are attested in Gaul. See Morris Silver “Historical Otherness, the Roman Bazaar, and Primitivism: P. F. Bang on the Roman Economy.” Journal of Roman Archaeology 22 [2009]: 421–43, at p. 423.) Morel disposes of the still widely prevalent notion of “surpluses”: Italian wines and kitchenware “were not sold because they had been produced; they were produced to be sold” (p. 508). The evidence for pottery exports “contradicts that ‘ancient transportation was too costly to make commerce in cheap wares profitable” (pp. 508–09; cf. William V. Harris, pp. 535–36).

Chapter 19. The Late Republic, William V. Harris

William V. Harris stresses the importance in Rome of cashless transfers (pp. 521–22). The “complexity and sophistication of late republican finance has been wilfully ignored by the Finley school” (p. 523). On the other hand, the deposit banking system operated “usually—one must suppose—with quite limited capital” (p. 523). It is not made clear why this needs to be assumed. Harris raises a most interesting problem: “In addition, we should not neglect the field of ‘public goods': it may be important to consider the effect of the Roman habit of allocating plentiful resources to some public ‘goods,' such as foreign wars and the water supply, and few to others, such as mass education” (pp. 511, 539; cf. Richard P. Saller, pp. 107–12). When an individual pays to educate himself, he confers a benefit (an “externality”) on everyone in the society for which he is not compensated in the market. Did Romans fail to recognize that this “market failure” must result in underinvestment in education? Or, alternatively, did they consider the “external” benefits from education too small relative to the costs to make subsidization profitable relative to other investments of scarce resources? Here is a research question.

Chapter 20. The Early Roman Empire: Production, Dennis P. Kehoe

The Roman state enforced property rights in land making it possible for large landowners to do quite well. Dennis P. Kehoe suggests that this “involved a redistribution of wealth that might otherwise have been invested in other more directly productive purposes” (p. 550). Thus, productive investment was apparently “crowded out” by the consumption choices of landowners (and other rentiers). A discordant note is that the owners of Roman villas “were able to generate substantial wealth by marketing wine in Rome, in other Italian cities, and, to a lesser extent in Gaul” (p. 554; cf. Susan E. Alcock, p. 692 on Damianus' combination of investment and consumption). This required substantial investment including for the development of higher quality wines to satisfy the demand of affluent rentiers. Kehoe also argues that for Roman estate owners “land represented a resource providing economic security rather than investment in the modern sense” (p. 549). It is true, for example, that some Roman landowners chose to shed risk by selling crops to negotiatores before they were harvested (Neville Morley, p. 582). But modern wheat farmers seeking to shed risk might do so by means of devices such as the forward contract. Possibly decisions by Roman agriculturalists were much more biased than now against wealth maximization (Andrea Giardina, pp. 752–53).

In assessing the scale of the Roman economy, Kehoe cites Hopkins' guess that actual GDP (AGDP) was perhaps 1.3–1.5 times his calculated estimate of subsistence GDP (SGDP) (pp. 546–47; cf. Elio Lo Cascio, pp. 622–23). This reviewer calculated AGDP by employing the “equation of exchange,” utilizing for M the estimated stock of Roman coinage and for V a value from preindustrial England. (Morris Silver, “Roman Economic Growth and Living Standards: Perceptions versus Evidence,” Ancient Society 37 [2007]: 191–252 at pp. 200–05). Assuming a total population of 60 million, AGDP is some nine times greater than SGDP. This finding has implications not only for scale but for income “distribution.” Even if a miniscule elite took most of the difference there would still remain more than a bare minimum for the many (compare Willem M. Jongman, p. 600 and David Cherry, pp. 725–26).

Chapter 21. The Early Roman Empire: Distribution, Neville Morley

Speaking of trade growth, Neville Morley suggests: “In part this reflects changes in habits of consumption in many regions, which created a significant demand for goods that could not (at least for the moment) be produced locally, or which were desirable precisely because they were not produced locally; the development of an appetite for Italian wine in Gaul, for example, and changing tastes for fine pottery” (p. 574). Morley does not explicitly consider a reason for trade that does not depend on traders being unable to produce traded goods locally: a difference between trading partners in the rate at which one good (say wine) can be transformed into the other (say cloth) by reallocating productive resources. Thus, long-distance trade in grain, which can be produced locally, must be understood by him as a response to the “unpredictability of the Mediterranean climate” (p. 579) and/or “poor harvests locally”/“local food crisis” (pp. 579, 580). Morley explains why “growth was in the end so limited” (relative to early modern Europe): “This reflects above all the relative environmental uniformity of the Mediterranean, the absence of technological developments that might give a region a comparative advantage in the production of a particular good, and the limits on the expansion of demand” (p. 589). Thus, Morley may be understood as follows: once existing technologies had been diffused the remaining regional differences in opportunity costs were too small to sustain growth or even previous aggregate levels of Roman trade (compare Lo Cascio, pp. 646–47, Sallares, pp. 23–27, and Phillipe Leveau, pp. 669–70, who stresses regional diversity as a growth factor in the Roman west). If differences in comparative advantage really became trivial, one wonders why Italy reoriented its agriculture to producing wine for local urban markets while, more and more, bearing the transport cost (and risks) of importing massive amounts of olive oil from Spain, not to mention for the continued import of wheat from Sicily and Egypt/Africa. Certainly, Italy was perfectly capable of producing both imports for itself.

Chapter 22. The Early Roman Empire: Consumption, Willem M. Jongman

Willem M. Jongman provides evidence (e.g., for diet and height) and arguments suggesting that Roman per capita incomes were rising and reasonably high for a preindustrial economy (pp. 616–17). “The tide seems to have turned in the late second century AD, possibly as a result of the Antonine Plague. Population declined, but contrary to expectations and unlike after the Black Death of the fourteenth century, this did not provide ordinary people with the bargaining power to improve their positions at the expense of the rich” (p. 616). However, the expected kind of effect seems to be visible in data for Roman Egypt analyzed by Walter Scheidel (“Roman Wellbeing and the Economic Consequences of the ‘Antonine Plague'.” Princeton/Stanford Working Papers in Classics, January 2010. Available for download at http://www.princeton.edu/~pswpc/pdfs/scheidel/011001.pdf).

Chapter 23. The Early Roman Empire: The State and the Economy, Elio Lo Cascio

The creation of a single political entity in the Mediterranean lowered transaction costs, which enhanced economic performance (pp. 626–27). “Again, the ‘comparative advantage in violence,' which gives the state the authority to set—and the concrete possibility to enforce—the rules of the game in market transactions between economic actors, could add considerably to efficiency of contracting” (p. 627). These are important observations. However, Elio Lo Cascio does not consider that the Roman emperor, the manager of the “single political entity,” might use his monopoly of force to implement personal values and mistaken economic perspectives. This omission is perhaps understandable because the most blatant examples of antimarket policies are later than Lo Cascio's assigned chronological period (see Giardina). Still there are iconic examples of coercive policies squarely within the “Early Empire,” such as the drastic grain market intervention of the governor (Antistius Rusticus) in Anatolian Antioch (90–91 CE), Emperor Hadrian's (reigned 117–138 CE) olive oil law, and the same ruler's mindless fish law requiring fishermen to market fish themselves instead of through middlemen.

Chapter 1. Editor's Introduction

One editorial claim requires discussion: “Greek and Roman states on the whole stayed within a Jonesian optimality band, strong enough to protect property rights, but too weak to predate on their subjects so viciously that they smothered economic activity” (p. 11). This is not a summary of the current state of knowledge. The Roman state was not too weak to enforce a maximum rate of interest on loans, which certainly prevented some individuals from obtaining loans. The motive was to protect borrowers from exploitation by bankers and other lenders not to viciously predate on them. In order to protect urban consumers, the Roman state might use its strength to control grain prices, force sales, and limit exports. The intention was “to limit profiteering in times of dearth,” but the result was to discourage profit-motivated individuals from producing, selling, and storing grain. The rulers issued new constitutions regimenting farmers, artisans, and merchants with the objective of facilitating increased tax collections. They were not strong enough to prevent massive desertions from once productive older centers by the victims (taxpayers). The motive of the rulers was certainly not to reduce living standards by provoking migration to sparsely settled regions, but rather to be able to pay for national defense and also for large urban distributions of grain, pork, wine, cash, etc. What matters in judging economic policy is not its motivation or the state of mind of policymakers but whether it is helpful or harmful to economic activity. The editors' proposition prejudges a problem important to them: Why did the Greco-Roman economy break down? (p. 7). Similarly, with respect to the editors' choice to speak of “transition to late antiquity,” Giardina observes: “The process of transition was accompanied and characterized by a series of state interventions which led to its conclusion, exerting a decisive influence on the form of the new socioeconomic reality which we call ‘late antique'” (p. 755).

Part I. Determinants of Economic Performance: Missing Chapters

The volume includes no chapter dealing with economic motivations and preferences. This is probably a case of addition by subtraction as the orthodox view of a Greco-Roman population divided between “elites” motivated by status and “peasants” motivated by subsistence has begun to fade (Harris, pp. 535, 536–37). Many articles indicate that the Greco-Roman world knew considerable market activity despite what Douglass North (“Markets and Other Allocation Systems in History: The Challenge of Karl Polanyi.” Journal of European Economic History 6 [1977]: 703–16, at p. 710) once referred to as the “insuperable barrier” of high transaction costs. How was this possible? The volume does not include a chapter on the role of cultic oaths and rituals in lowering contract enforcement costs (mentioned by Morley, pp. 588–89). All-knowing supernatural beings provided “third-party” enforcement of contracts. At the limit, all that mattered was that the oath had been taken and the proper ritual performed. Harris wonders: “Should such ties [of extra-legal fides] be seen as backward substitutions or as a sophisticated way of doing without them?” (pp. 537–38). Whichever way they are viewed, the reliance on oaths and rituals facilitated market transactions and is arguably the factor that best distinguishes Greco-Roman and other ancient economies from modern economies.

Conclusion

The editors' state: “We have two goals in this book: to summarize the state of knowledge in ancient Greek and Roman economic history, and to contribute to shaping future research” (p. 1). My detailed reactions and complaint about insufficient coverage of the later empire should not mislead, they have admirably succeeded in achieving both objectives. Expert scholars who ably summarize and move forward to formulate general conclusions from very limited and difficult material write the articles. In this process, a number of new research opportunities are presented. The study of Greco-Roman economies is in the midst of a drastic transformation in which an economics orientation is displacing nineteenth-century stage theories of development and anthropologically based methodologies. Nevertheless, this volume will reward historical economists and economic historians for years to come. For this achievement, the editors and authors deserve our appreciation and applause.