1a: government consumption

A tentative overview of Athenian public finance is provided in the Appendix. The upper limit for government consumption is normally public revenue (but see below). Around 340 BCE, public revenue amounted to 400 talents in Athens.Footnote ³ This is usually taken as a solid fact, and we treat it as such. This means that the calculations below, which involve considerable guesswork, are firmly anchored in ancient evidence at least in this dimension. Note that according to the Attic standard 6 obols equal 1 drachma, and 6,000 drachmas equal 1 talent.

The major expenditure items in Athens were military expenses, the costs of running the democracy (assembly pay, pay to councillors, and jurors), the great festivals (the City Dionysia, the Great Panathenaia), and some transfers. We do not know how much the Athenians spent on public buildings (temples, stoas, etc.), water supply, roads, etc.Footnote ⁴ In our baseline estimate, we assume 45 talents for investmentsFootnote ⁵ and that transfers amounted to c. 80 talents yearly (Item 1b), leaving c. 275 talents as government consumption. The lower limit for government consumption we take to be 158 talents (retaining the costs of the democratic institutions, and 65 of 111 talents of military expenditures). The upper limit for government consumption corresponds to a minimum level of transfers (39 talents, cf. Item 1b) and only 25 talents of investments for a total consumption of 336 talents.

It is, however, arguable that part of public expenditures never features in the public accounts. In classical Greece, it was considered a duty and an honor for rich citizens to contribute to the common good, to perform so called liturgies. Each normal year there were about 100 festival liturgies (Davies, Reference Davies1967), the most well-known being to stage a dramatic production (choregia). The trierarchy was a military liturgy – to commission and command a warship for a year. It remains an open question to what extent the liturgies should be seen as a tax. To some extent, the system was enforced by social norms, which would place it outside the Index, and there was always an honorific element. However, even if the system started as voluntary, it had largely ceased to be so by the fourth century. Liturgists could be nominated by others, and once they were appointed it was punishable to avoid the obligation.Footnote ⁶

Hence, as an alternative, we add the cost of liturgies to government consumption. A festival liturgy costs between 300 and 3,000 drachmas, while known costs of a trierarchy range from 4,000 to 6,000 drachmas.Footnote ⁷ To be added to government consumption are the costs of 100 festival liturgies and the trierarchies. We guess the former represented a total expenditure of 150,000 drachmas or 25 talents. When Athens was not at war, the expenditure of a trierarch was presumably modest: say 1,000 drachmas on average for 300 trierarchs, for a total of 50 talents, and an aggregate liturgical expenditure of 75 talents.

We need an estimate of overall consumption. This roughly equals GDP less investments and savings. The notion that there were no consciously made productive investments in classical Greece has been disproved.Footnote ⁸ In addition, individuals often resort to hoarding, placing money in temples for safekeeping, etc. However, we have no way of knowing the size of investments and savings. Our somewhat arbitrary baseline assumption of overall consumption is 85% of GDP, including both private and public consumption. We assume that the lower limit for overall consumption is 80% of GDP and the upper limit is 90%.

This brings us to an estimate of GDP, which is a difficult (read impossible) task if one hopes for accuracy. Goldsmith (Reference Goldsmith1987) suggests a GDP around 5,000 talents, a figure obtained by multiplying the labor force (140,000) with the average wage (1 drachma) and the number of working days (250). Note that slaves famously were paid just as much as free men (Loomis, Reference Loomis1998).Footnote ⁹ Given the problems involved when estimating GDP in today's developing countries, vividly described by Deaton (Reference Deaton, Behrman and Srinivasan1995), such a crude method may well be defended.

With the same method, but adjusting the population figures to that of Hansen (Reference Hansen1999), pp. 92–94, we estimate a baseline GDP of c. 5,900 talents. To arrive at this figure, we assume 30,000 free adult male citizens, 30,000 female citizens, 40,000 metics (i.e., resident foreigners, half of which were female), and 100,000 slaves. We assume that the number of working days is 195 (Hansen, op. cit., 186), but that slaves work 300 days.

With respect to the number of slaves, not much is known in reliable detail. We follow the salutary comment of Hansen (Reference Hansen1999, p. 93), that the Athenians themselves did not know the number of slaves, only that there were more slaves than free in Attica. Andreau and Descat (Reference Andreau and Descat2011) suggest that the number of slaves in Athens were around 200,000–250,000, but they note that this figure is in the higher range of the various proposals in the literature. Therefore, we use a more conservative estimate as our baseline case – 100,000 slaves. In the sensitivity analysis, we use 50,000 as a lower limit and 250,000 as an upper limit. We assume that 1/3 of the slaves do household work and therefore do not count in GDP.

We assume in our baseline that 5,000 (metic) women work outside the household (195 days). There must be such a group since the Athenians collected a metic tax (metoikion) that only applied to men and independent women (Andreades, Reference Andreades1979[1933], p. 278). We do not impute any income to the other women in Athenian society, presuming that they were engaged in household work, which traditionally is not included in the GDP measure.

We use 1 drachma as an average daily wage, which is conventional and seems reasonable. Loomis shows that after the Peloponnesian War wages (for publicly financed work) seem to settle around 1 drachma until they rise substantially in the period after 330. Obviously, there were some who did not produce anything (and perhaps received a dole from the government, cf. Item 1b), and some who earned more. We implicitly assume that the incomes of these groups cancel out.

Total labor income in our baseline amounts to [((30,000 + 20,000 + 5,000) × 195) + (100,000 × 300 × (2/3))] drachmas or 5,120 talents. Note that this method bypasses the problem of estimating income in the informal sector by imputing an income to self-sufficient farmers which is then counted in GDP. This makes Athens more comparable to industrialized current societies than if we had ignored self-sufficient production.Footnote ¹⁰

Then, there is return to capital. If you owned more than 3–4 talents, you belonged to the group of liturgists, and Hansen (Reference Hansen1999, p. 110ff) suggests that there were at least some 1,200 such persons. We assume that the liturgists on average possess a fortune of 8 talents, for a total of 9,600 talents. Assume further that the rate of return is 8%, which is conventional (Lyttkens, Reference Lyttkens1992; Ober, Reference Ober2010). The total income from capital then comes to 758 talents, which together with the labor income (5,120 talents) comprises Athenian baseline GDP. An alternative would be to use the figure that the Athenians arrived at when they assessed the wealth in Attica: 5,750 talents in 378 (cf. Hansen, Reference Hansen1999, p. 113). This is sure to be an underestimation of wealth, however, since it is based on self-reporting and the tax system encouraged holding wealth in ‘invisible forms’, which included depositing at a bank. For this reason, the figure 9,600 talents may also be considerably too low.

As mentioned earlier, our baseline estimate of GDP is thus 5,120 + 758 = 5,878 talents (we use 5,900 in the calculations). For a lower limit for GDP, we assume that there were 50,000 slaves (with again 1/3 doing household work), bringing GDP to 4,211 ≈ 4,200 talents. For the upper limit for GDP, we assume 250,000 slaves, and a GDP at 10,900, mutatis mutandis.

As a comparison, Ober (Reference Ober2010) provides estimates of the earnings of different groups in Athenian society in an analysis of the income distribution. He assumes that the subsistence level (S) corresponds to 100 drachmas per year (as a male income which equals household income), that a relatively comfortable middling status corresponds to 2.4 − 10 × S, and that the rich elite earned in excess of 10 × S. If we assume, given the earlier figures, that the income of the average middling family is 5 × S (500 drachmas/year), and that the average elite household has an income of 20 × S (2,000 drachmas/year), then the GDP of Athens falls between 5,590 and 6,660 talents depending on the assumed proportion of middling versus subsistence-living ordinary citizens. Note that Ober assumes only 80,000 slaves in Attica.

Our baseline measure of government consumption as share of total consumption is 5.5% with liturgies excluded and 7.0% liturgies included. Depending on how we treat the liturgies, this places ancient Athens just below or above the Central African Republic, which with 6.5% is given the score 9.8 in the Economic Freedom Index (cf. Table 1). This is our baseline score for Athens. In the sensitivity analysis, we combine the maximum level of government consumption (336 talents) with the lower limit for overall consumption (80% of a GDP of 4,200 talents) and vice versa. The upper limit for the share of public consumption is then 12.2% (liturgies included, score 8.2) and the lower limit is 1.6% (liturgies excluded, score 10).

Table 1.

Size of government in Athens

Finally, an important feature of the Economic Freedom Index is that it captures modern economies in peace – not a war. For the last 60 years, peace has been the normal condition for high-income countries. Consequently, since we wish to compare the results for Athens with modern states, peaceful conditions must necessarily be assumed.

However, Athens was often at war: “From the end of the fifth century to the middle of the fourth, Athens is a society at war, relieved by occasional short periods of peace” (Hansen, Reference Hansen1999, p. 116).Footnote ¹¹ Since war was so frequent, our use of peacetime conditions will underestimate the size and economic influence of government in Athens relative to modern states.

Waging war was very expensive, but we lack exact figures. For example, according to Thukydides (2.70.2) a two-and-a-half year siege of Potidaia cost the public purse 2,000 talents. Pritchard (forthcoming) estimates that policing the Aegean in peace with a naval force during 6 months cost 67 talents in running expenses for the trierarch and the public purse combined. To finance military expenditure, the Athenians could reduce other government expenditures or raise extraordinary revenues: they could impose a special wealth tax (the eisphora), increase the burden on the trierarchs, and plunder their adversaries.

Pritchard (forthcoming) has provided careful estimates of the military expenditures in Athens in the 370s. We apply these to the 340s as the best approximation available.Footnote ¹² For the 370s, a decade dominated by war, Pritchard estimates that the annual average military expenditures (public and private) were 522 talents and that the increase compared to peace is 378 talents.Footnote ¹³ In order to estimate government consumption in war, we add this figure to our estimate of peacetime government consumption plus peacetime liturgies. This gives us 378 + 275 + 75 = 728 talents. We assume, however, that 100 talents could be raised for military spending by reducing other government consumption. Total government consumption in times of war would then be 628 talents, more than a doubling of the peacetime figure (275 talents). If we were to use this together with our baseline assumptions, the score for Athens in the first dimension (Size of government) would fall from 9.9 to 9.5 and the overall score would fall by 0.1.

1b: transfers and subsidies

The diobelia were payments of two obols per day to disabled citizens who could not support themselves, which is attested for the late fifth century and seems to have been replaced by a similar support in the fourth century (Hansen, Reference Hansen1999, p. 98; Loomis, Reference Loomis1998, p. 231). If 2% of the citizen population were recipients (600 males) and the support was paid every day of the year, then the yearly expenditure was 12 talents (baseline and upper limit).

The theorika was a payment of two obols per day (Loomis, Reference Loomis1998, pp. 225–226), introduced in the middle of the fourth century originally as “theatre money” to allow all citizens to afford entry to the theatre on those festival days when tragedies and comedies were performed. It was gradually extended to other festivals. With 30,000 citizens, and assuming everybody received the payment, the cost was 1.7 talents for each day it was paid. We assume as baseline that it was paid 40 days in a year with a total expenditure of 67 talents.

The theorika could be paid frequently, effectively exhausting the public budget. In the latter case, a reasonable maximum (allowing for some unspecified consumption and investments) seems to be 100 talents (a quarter of the revenues). As a minimum for the theorika, given that it is seen as “the glue of democracy” (Hansen, Reference Hansen1999, p. 316), we assume 20 days of payment or 33 talents. The lower limit for the diobelia that we use is 6 talents (300 recipients). We allow GDP to vary as described above for Item 1a. To get a maximum range for our sensitivity analysis, we combine high GDP with small subsidies and vice versa.

When there was a food crisis, the Athenians sometimes used public means to subsidize grain. However, this only marginally affects the Athenian score. The reason is that transfers plus subsidies cannot increase substantially beyond the highest figure assumed for the theorika above. A reasonable maximum for transfers and subsidies together is 250 talents (no investments and consumption at a minimum), some 4.2% of baseline GDP. Note, however, that this entails a reduction in government consumption and hence a higher score on Item 1a.Footnote ¹⁴

1c: government enterprises and investments

Despite low transfers and low public consumption, there was some significant government involvement in the Athenian economy. The Athenian state owned the silver mines in Attica. They were leased out and the revenue per contract was 200–1,500 drachmas per year. In 340, when the mining operations were at their peak, between 420 and 980 leases were in operation at the same time, because there were 140 new leases per year and each lease lasted three or seven years (cf. Isager and Hansen, Reference Isager and Hansen1975, pp. 42ff and 105ff). For our baseline, we assume that half the leases were for three years and half for seven years, so that the number of mining operations at any specific time is 210 + 490 = 700. We also assume that the price for the average lease is 850 drachmas, which brings the total revenue to 99 talents. In the sensitivity analysis, we use revenues of 64–142 talents. We assume that the revenue from leasing ‘other government property’ is one third of the baseline mining revenue (33 talents). Our baseline estimate for government investments is 45 talents (to correspond with the baseline in 1a).Footnote ¹⁵ GDP varies as in the previous cases.

1d: marginal tax rates

Finally, we note that there were no personal income taxes in Athens. The Athenians certainly used taxes to raise revenue, but these taxes were on wealth (e.g., the eisphora, cf. above), trade, and persons (e.g., resident foreigners paid a lump-sum per capita tax). Thus, focusing exclusively on income taxes tends to underestimate government intervention. On the other hand, since landed property is more difficult to conceal than coins, a side-effect of taxes on wealth may have been to encourage market activities and specialization rather than causing a deadweight loss (Lyttkens, Reference Lyttkens2013, Ch. 6).

2a: independence of judiciary

There was essentially no government to be independent of in Athens, as it was a direct democracy with decisions taken in the Assembly where all citizens could attend and vote. The first 6,000 to show up in the Assembly received 3 obols, so almost everybody could actually afford to attend. The public sector was run by magistrates selected by lottery. In theory, the lowest property class could still be excluded from some magistracies; however, in practice, that rule ceased to function already in the fifth century.

Decisions on legislation were taken by boards of jurors, where the members were selected by lottery from among a yearly appointed panel of 6,000 citizens, where the members once again were selected by lottery. The rest of the courts were also manned by jurors selected by lot (using a lottery machine), making, for example, bribery very difficult. Jurors were paid like assemblymen and members of the Council.

2b: impartial courts

From 594, it was possible to challenge the decision of a magistrate. There were established procedures for such challenges and for bringing a complaint to the Council which notably also was filled with citizens appointed by lot (Hansen, Reference Hansen1999, p. 221).

In the second half of the fourth century, changes in legislation were undertaken in order to facilitate commercial activity, in particular for foreigners. The procedures for hearing commercial disputes now allowed adjudication within a month, and individuals were admitted into courts without regard to their nationality (Burke, Reference Burke1992; Cohen, Reference Cohen1992).

As regards impartiality in general, the relevant divide was between the rich and poor. Judging by the speeches delivered in courts, if you were rich, it was expected that you contributed to the common good (liturgies) and paid your taxes. So you may have had an advantage if you had been generous, but you may equally be at a disadvantage if your opponent could show that you had been stingy. Note that the jurors were selected by lot and were ordinary citizens.Footnote ¹⁶

The only real problem with regard to the impartiality of courts was the repeated complaint that the poor in a democracy might exploit the rich in political trials. A trial could lead to heavy fines or outright confiscation of property. The revenue from the courts could make a large contribution to state revenue, but as argued by Ober (Reference Ober1989, pp. 200–202), it is not known to what extent rich persons actually suffered in the courts. In an oration spoken after 338, ‘There were three examples of how the Athenian courts did not fall into the temptation of condemning a number of rich mining-concessionaires. On the other hand […] in those very same years, the richest of all […] Diphilos, is condemned […] and his fortune of 160 talents distributed among the citizens’ (Hansen, Reference Hansen1999, p. 315).

Probably the best interpretation is that this was not a problem in normal times, but in crises it could perhaps be somewhat risky being rich if you ended up in a court (cf. Hornblower, Reference Hornblower1983, p. 172, citing Lysias 30.22). In modern societies, the problem is usually the opposite, namely that the rich have an advantage in the courts.

2c: intellectual property

There were no formal laws protecting intellectual property rights. Ancient Greece, however, witnessed a tremendous surge in recognizing the origin of intellectual accomplishment. For the first time in history, we find artists known by name, and also signing their works with their name (for example, some of the artists behind the black-figured ceramic in Athens, in the second half of the sixth century BCE), reputedly we find artists adding their self-portrait to public works of art (Pheidias), authors and play writers are known to us by name, and the speeches of famous orators have been preserved under their own names.

All of this must represent a major leap in the perception of intellectual property rights (it provides incentives to engage in such work). If informal rules and social norms were at least to some degree a substitute for formal institutions, these improvements may be important. Still, as far as formal institutions go, the score must be 0. We note as an important characteristic of the index that it only quantifies formal institutions.

2e-f. integrity of the legal system and legal enforcement of contracts

Property rights were in general very well protected. The first action of an archon when he took up office was to swear that ‘all men shall hold until the end of his office those possessions and powers that they held before his entry into office’ (Aristotle, Athenian Constitution 56.2). In other words, the importance of protecting property rights was established yearly by the highest ranked official. In 403/2, a rule was established that only written law was admissible in court.

Slaves did not have exclusive rights to their own body (and no political rights). However, their legal personality at least began to be defined in the fourth century. They were now allowed to give evidence like free men. They could enter into contracts on their own behalf and be personally prosecuted. Freedmen (manumitted slaves) were included with the resident foreigners (metics). They could not own landed property.

This seems also to be the most appropriate place to consider the restricted judicial and political rights of women. Women could not appear in court, and were for many purposes treated as the property of their husbands. They could, however, divorce their husbands whenever they wanted, with the restriction that they needed a male relative to act on their behalf. In case of divorce, the woman took her dowry with her, as it was always her own property. Women had no political rights.

How much weight the restricted position of women and slaves should be given in this particular context is not altogether obvious. Perhaps, South Africa is illuminating, as it scores 2.9 in 1990, which increases to 6.1 in 1995. Contrary to the South African racial regime, slaves in Athens could rise socially and in their rights, as they could be manumitted and their children could become citizens. In special cases, this privilege was conferred also upon first-generation freedmen.

2g. regulatory restrictions on the sale of real property

There are no documented restrictions on the sale of real property, suggesting the score (10). It is worth noting, however, that from 594 BCE Athenian citizens could no longer be enslaved in Attica and consequently you were no longer allowed to put your own body up as security for a loan. Strictly speaking, you were thus not allowed to sell yourself – arguably a restriction on the sale of property compared to the previous practice. Additionally, a male citizen who sold the use of his body (prostitution) lost his citizen rights (Aeschines 1.160).

2: total score

Though we arrive at the score 6.1, the Athenian score on Item 2 is a field open for suggestions. In a modern perspective, Athens scores very high on Items 2a, 2b, and 2d, and very low on 2c. The main downside is the treatment of women and being a slave society. However, as we understand from the index, these disadvantages can only appear under Item 2e and therefore have a limited influence on the total score.

3a: growth of money supply less growth in GDP

If and when there was a major change in the money supply in Athens (in Athenian coinage), the main source would have been the Athenian silver mines. The output from these mines declined in the fifth century (Cohen, p. 194), but increased again from around 355, and probably peaked roughly at the time we are dealing with (Isager and Hansen Reference Isager and Hansen1975). The Athenians leased the mining concessions to contractors, who could take the silver ore to the mint, where they paid a minting charge. In this context, the important fact is that an increase in money supply at the same time was equivalent to an increase in GDP of the same magnitude since silver was also a valued good. In this setting, it seems unlikely that growth of the money supply in terms of coinage would outpace growth of GDP. In fact, the presence of a minting charge suggests that GDP increased more than the money supply. To this we should add that the Athenian banks (cf. below) provided credit of various sorts thereby expanding the money supply (Cohen, Reference Cohen1992, pp. 14–18). In view of this, we score Athens on level with modern economies where growth of money supply slightly exceeds GDP growth (Table 3).

Table 3.

Access to sound money in Athens

3b and 3c: variation in the inflation rate and recent inflation rate

Once again, the nature of money as silver coinage is important. Inflation could occur for two reasons. One possibility is that the silver content of the coinage in question is manipulated. This did not happen with Athenian coinage in our period. The other possibility is that the relative price of silver changed. However, the relative price of silver was arguably determined in the ‘international’ market and the increase in Attic mining would have had a limited effect.

There are indications that the wage of unskilled labor increased by a factor 2 from the end of the fifth century to the end of the fourth. This could be a sign of inflation, but Scheidel (Reference Scheidel2010b) sees this as an increase in the real wage. Inflation is also relatively unlikely since it is the wage of the whole trading region that matters, which means that variations in Athenian mining and minting have a limited impact. Note that Alexander has not yet conquered and released the Persian treasury – an act that probably affected the relative prices of both gold and silver. Furthermore, most of the Attic silver was exported (Isager and Hansen, Reference Isager and Hansen1975).

4bi: hidden trade barriers

Since the Athenians would have starved without the import of grain, several regulations applied. One law forbade anyone living in Athens or Attica (whether citizen or metic) to lend money to a ship importing grain into any other place than Athens. Another law forbade anyone living in Attica to transport grain to any other harbor than Peiraieus, and two thirds of the grain had to be disposed of in Athens. The grain trade was the only one regulated in this way (cf. also below Item 5ci). A modern day counterpart to this regulation is the export ban on rice introduced in India in 2008, which is noted in the index as a decrease in the score for non-tariff trade barriers by 0.4 (from 6.1 to 5.7), decreasing the total score for regulatory trade barriers by 0.2. In other words, the trade restrictions on grain seem prominent because trade was otherwise free in Athens. The effect of the regulation on the score for freedom to trade is marginal (around 0.1).

4c: size of trade sector

For modern economies, the score on this item in the index is based on a regression model that estimates the expected size of the trade sector given the size and location of the country. If a nation trades a lot more than the model predicts, then it is concluded that the policy regime must be favorable to trade and vice versa (Skipton and Lawson, Reference Skipton and Lawson2004). Without any ambition to enter Athens into such an exercise, we nevertheless suggest that the Athenians relied on trade to a considerably greater extent than could be expected, given the size, location, and time period.Footnote ¹⁷

Isager and Hansen (Reference Isager and Hansen1975, pp. 51–52) suggest that trade was important in the everyday life of the Athenians, and that at least half the population was engaged in trade (p. 51). Following their method, we know that in 401/0, the tax farmer who bought the contract for the collection of the import/export dues of 2% paid 36 talents for the contract and still made a ‘small’ profit (Andokides 1:133). This was shortly after the end of the Peloponnesian War, when the volume of trade probably was unusually low. If the profit rate was 5%, the total volume of trade implied is (1.05×36)/0.02 = 1,890 talents. Assuming that 50% of this was transit trade and that we should add 500 talents worth of grain imports (which was taxed separately), total imports plus exports amounted to 500 + (1890×0.5) = 1,445 talents or 8,670,000 drachmas. With 50,000 free adult males (citizens and metics), this corresponds to 173 drachmas per adult male or 89% of his income from his own work, assuming 195 working days at 1 drachma per day (as in Item 1a). Alternatively, if the grain tax is included in Andokides’ figure and people worked 225 days per year, imports represent 50% of yearly income. We believe this amounted to a much greater reliance upon trade than expected. The reliance on imports arguably increased during the course of the fourth century.

5ai: deposits in private banks

The major problem here is the fact that sanctuaries in ancient Greece (most notably in Athens and on Delos) sometimes performed banking functions (Chankowski, Reference Chankowski2005, Reference Chankowski2007; Davies Reference Davies2001). Both individuals and states deposited wealth for safe keeping with temples. City-states could sometimes borrow from temples. During the Peloponnesian War, the Athenians used the reserves built up on the Acropolis and this money was viewed as loans to the state. It appears however that in Athens the sacred loans were used exclusively for waging war (Gabrielsen, Reference Gabrielsen1994; Pritchard, forthcoming). We also hear of individuals borrowing from temple funds to finance their sacrifices at the temple (Cohen, Reference Cohen1992, p. 42 n. 2). In Athens, private individuals could borrow from Deme sanctuaries (Chankowski, Reference Chankowski2005; Davies, Reference Davies2001) and had to pay an interest on the loan. There were however important differences between the commercial banks and the sanctuaries. If you wanted to earn an interest on your deposit, you probably had to go to the private banks with your money. A famous scandal ensued in Athens in the first half of the fourth century when the Treasurers of the temples burned down a part of the sacred complex on the Acropolis in order to hide the fact that they had lent some of the sacred monies to a bank.Footnote ¹⁸ This implies that a private bank could be used to earn an interest on deposits, while this is not necessarily possible in the same way with money in the temples. For this reason, in our baseline scenario, we set the score to 7.5, but in the sensitivity analysis we use scores of 5 and 10 as alternatives.Footnote ¹⁹

5aii: competition from foreign banks

The banks (bankers) in Athens were a mixed lot.Footnote ²⁰ We find among them not only freed slaves and metics (resident foreigners) but also Athenian citizens (Cohen, Reference Cohen1992, p. 174). The banking business relied on personal contacts, and so a foreign bank(er) would have had to go to Athens to compete with the banks already there, except possibly if they were based in a nearby polis. We note that we happen to know of the existence of at least one bank(er) in nearby Aegina (Cohen, Reference Cohen1992, p. 80).

The fact that we find resident foreigners among the bankers in Athens indicates that the banks in Athens were subject to competition, but perhaps we should think of this as a contestable market rather than a competitive one. Competition would be somewhat attenuated due to the need to travel (costs of entry). Foreigners as bankers would also suffer from the disadvantage that they could not own landed property, which could be offered as security for a loan. This disadvantage is relatively limited however, both because banking business was often part of the invisible (non-taxed) part of the economy (Cohen, Reference Cohen1992, Ch. 5–6) and hence avoided showing off landed property, and also because the problem with real estate was solved by using intermediaries (Cohen Reference Cohen1992, pp. 133–136 and 145). So, to conclude, the answer in this section is arguably ‘yes’, Athenian banks had to contend with competition from foreign banks.

5aiii: percentage of credit extended to private sector

Essentially, the commercial banks gave credit to the private sector, while some sanctuaries gave credit to cities and some gave credit to private individuals (cf. above item 5ai). We use a score of 7.5 in our baseline calculation and vary this in the sensitivity analysis.

5biv: social benefits and incentives to work

Citizens without any means to support themselves received 2 obols (it is unclear whether they had to be disabled.) The daily wage was probably 1 drachma (cf. Item 1a). Ober (Reference Ober2010) argues that the sustainable minimum for an adult male (with a family to support) was 3–3.5 obols.

5bv: military conscripts

Two years of military training and service (ephebic service) was compulsory by (at least) 336/5, and this practice may have originated early in the fourth century (Hansen, Reference Hansen1999, p. 109). However, the Athenians often needed the service of many more men than these two age cohorts could provide. It was expected of a citizen that he was willing to take part in military actions, whether as a foot soldier, sailor, and so on. In other words, participation was enforced by a social norm.

However, the fact that sailors and soldiers were paid both in the fifth and in the fourth centuries, and that payment continues even in periods of crises (Loomis, Reference Loomis1998) suggests strongly that there is also an element of voluntariness in military service. Furthermore, in the fourth century, Gabrielsen (Reference Gabrielsen1994) shows that trierarchs often paid others to do the actual captaining of a ship. The fourth century also witnessed the (renewed) use of mercenaries, now also in the wars between the poleis (Hornblower, Reference Hornblower1983), which may imply that military service was not compulsory. Gabrielsen (Reference Gabrielsen1994) notes that conscription was only used exceptionally. We suggest that Athens scores somewhere around Sweden. Currently, in Sweden, military training is in practice voluntary, but military (domestic) service is compulsory once you have trained.

5ci: price controls

Magistrates controlled that ‘unground corn in the market is on sale at a fair price, and next that millers sell barley-meal at a price corresponding with that of barely, and bakers loaves at a price corresponding with that of wheat’ (Aristotle, Athenian Constitution 51.3). Also, grain retailers were not allowed to buy more than a certain quantity of grain at a time in order to prevent speculation. Sometimes, individuals were lauded for selling at not much above usual price despite there being a shortage (Hansen, Reference Hansen1999, p. 98). This suggests that such benefaction was an unusual practice and a possibility. In other words, the price regulation was not very strict. It also implies that subsidies were not always available or adequate.