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The Economy of Ancient Greece

Darel Tai Engen, California State University – San Marcos

Introduction 1

The ancient Greek economy is somewhat of an enigma. Given the remoteness of ancient Greek civilization, the evidence is minimal and difficulties of interpretation abound. Ancient Greek civilization flourished from around 776 to 30 B.C. in what are called the Archaic (776-480), Classical (480-323), and Hellenistic (323-30) periods.2 During this time, Greek civilization was very different from our own in a variety of ways. In the Archaic and Classical periods, Greece was not unified but was comprised of hundreds of small, independent poleis or “city-states.” During the Hellenistic period, Greek civilization spread into the Near East and large kingdoms became the norm. Throughout these periods of ancient Greek civilization, the level of technology was nothing like it is today and values developed that shaped the economy in unique ways. Thus, despite over a century of investigation, scholars are still debating the nature of the ancient Greek economy.

Moreover, the evidence is insufficient to employ all but the most basic quantitative methods of modern economic analysis and has forced scholars to employ other more qualitative methods of investigation. This brief article, therefore, will not include any of the statistics, tables, charts, or graphs that normally accompany economic studies. Rather, it will attempt to set out the types of evidence available for studying the ancient Greek economy, to describe briefly the long-running debate about the ancient Greek economy and the most widely accepted model of it, and then to present a basic view of the various sectors of the ancient Greek economy during the three major phases of its history. In addition, reference will be made to some recent scholarly trends in the field.

Sources of Evidence

Although the ancient Greeks achieved a high degree of sophistication in their political, philosophical, and literary analyses and have, therefore, left us with a significant amount of evidence concerning these matters, few Greeks attempted what we would call sophisticated economic analysis. Nonetheless, the ancient Greeks did engage in economic activity. They produced and exchanged goods both in local and long distance trade and had monetary systems to facilitate their exchanges. These activities have left behind material remains and are described in various contexts scattered throughout the extant writings of the ancient Greeks.

Most of our evidence for the ancient Greek economy concerns Athens in the Classical period and includes literary works, such as legal speeches, philosophical dialogues and treatises, historical narratives, and dramas and other poetic writings. Demosthenes, Lysias, Isokrates, and other Attic Orators have left us with numerous speeches, several of which concern economic matters, usually within the context of a lawsuit. But although these speeches illuminate some aspects of ancient Greek contracts, loans, trade, and other economic activity, one must analyze them with care on account of the biases and distortions inherent in legal speeches.

Philosophical works, especially those of Xenophon, Plato, and Aristotle, provide us with an insight into how the ancient Greeks perceived and analyzed economic matters. We learn about the place of economic activities within the Greek city-state, value system, and social and political institutions. One drawback of such evidence, however, is that the authors of these works were without exception members of the elite, and their political perspective and disdain for day-to-day economic activity should not necessarily be taken to represent the views of all or even the majority of ancient Greeks.

The ancient Greek historians concerned themselves primarily with politics and warfare. But within these contexts, one can find bits of information here and there about public finance and other economic matters. Thucydides, for example, does takes care to describe the financial resources of Athens during the Peloponnesian War.

Poems and dramas also contain evidence concerning the ancient Greek economy. One can find random references to trade, manufacturing, the status of businessmen, and other economic matters. Of course, one must be careful to account for genre and audience in addition to the personal perspective of the author when using such sources for information about the economy. The plays of Aristophanes, for example, make many references to economic activities, but such references are often characterized by stereotyping and exaggeration for comedic purposes.

One of the most extensive collections of economic documents is the papyri from Greek-controlled Egypt during the Hellenistic period. The Ptolemaic dynasty that ruled Egypt developed an extensive bureaucracy to oversee numerous economic activities and like all bureaucracies, they kept detailed records of their administration. Thus, the papyri include information about such things as taxes, government-controlled lands and labor, and the unique numismatic policies of the Ptolemies.

Epigraphic evidence comes in the form of stone inscriptions from public and private institutions. Boundary markers placed on land used as security for loans, called horoi, were often inscribed with the terms of the loans. States such as Athens inscribed honorary decrees for those who had done outstanding services for the state, including economic ones. States also inscribed accounts for public building projects and leases of public lands or mines. In addition, religious sanctuaries frequently inscribed accounts of monies and other assets, such as produce, land, and buildings, under their control. Although accounts tend to be free of human biases, honorary decrees are much more complex and the historian must be careful to consider the perspective of their issuing institutions when interpreting them.

Archaeological evidence is free of some of the representational complexities of the literary and epigraphic evidence. Pottery finds can tell us about pottery manufacture and trade. The vase types indicate the goods they contained, such as olive oil, wine, or grain. The distribution of finds of ancient pottery can, therefore, tell us the extent of trade in various goods. Finds of hoarded coins are also invaluable for the information they reveal about the volume of coins minted by a given state at a given time and the extent to which a state’s coinage was distributed geographically. But such archaeological evidence is not without its drawbacks as well. The same “muteness” that frees such evidence from human biases also makes it incapable of telling us who traded the goods, why they were traded, how they were traded, how much they cost, and how many middlemen they went through before reaching their find spots. Furthermore, it is always dangerous to attempt to extrapolate broad conclusions about the economy from a small number of finds, since we can never be sure if those finds are representative of larger phenomena or merely exceptional cases that archaeologists happened to stumble upon.

Some of the most spectacular and informative finds in recent years have been made under the waters of the Mediterranean, Aegean, and Black Seas by what is known as marine (or nautical) archaeology. Ancient shipwrecks containing goods for trade have opened new doors to the study of ancient Greek merchant vessels, manufacturing, and trade. Although the field is relatively new, it has already yielded much new data and promises great things for the future.

The Debate about the Ancient Greek Economy

As stated above, the ancient Greek economy has been the subject of a long-running debate that continues to this day. Briefly stated, the debate began in the late nineteenth century and revolved around the issue of whether the economy was “primitive” or “modern.” These were a poor choice of terms with which to conceptualize the ancient Greek economy and are to a great extent responsible for the intractability of the debate. These terms are clearly normative in character so that essentially the argument was about whether the ancient Greek economy was like our “modern” economy, which was never carefully defined, but apparently assumed to be a free enterprise, capitalistic one with interconnected price-making markets. In addition, confusion arose over whether the ancient Greek economy was like a modern economy in quantity (scale) or quality (its organizing principles). Lastly, such terms clearly attempt to characterize the ancient Greek economy as a whole and do not distinguish differences among regions or city-states of Greece, time periods, or sectors of the economy (agriculture, banking, long distance trade, etc.).

Seeing extensive trade and use of money in Greece from the fifth century B.C. onward, the modernists extrapolated the existence of a market economy in Classical Greece. On the other hand, seeing traditional Greek social and political values that disdained the productive, impersonal, and industrial nature of modern market economies, the primitivists downplayed the existence of extensive trade and the use of money in the economy. Neither primitivists nor modernists could conceive of the existence of extensive trade and the use of money unless the ancient Greek economy was organized according to market principles. Moreover, neither side in the debate could call activities “economic” unless such activities were productive and aimed at growth.

Historical methods were also a factor in the debate. Traditional ancient historians who relied on philology and archaeology tended to side with the modernist interpretation, whereas historians who employed new methods drawn from sociology and anthropology tended to hold to the primitivist view. For example, Michael Rostovtzeff assembled a wealth of archaeological data to argue that the scale of the ancient Greek economy in the Hellenistic period was so great that it could not be considered primitive. On the other hand, Johannes Hasebroek used sociological methods developed by Max Weber to argue that the ancient Greek citizen was a homo politicus (“political man”) and not a homo economicus (“economic man”) – he disdained economic activities and subordinated them to traditional political interests.

A turning point in the debate came with the work of Karl Polanyi who drew on anthropological methods to argue that economies need not be organized according to the independent and self-regulating institutions of a market system. He distinguished between “substantivist” and “formalist” economic analysis. The latter, which is typical of economic analysis today, is appropriate only for market economies. Market economies operate independently of non-economic institutions and their most characteristic feature is that prices are set according to an aggregate derived from the impersonal forces of supply and demand among a group of interconnected markets. But material goods may be produced, exchanged, and valued by means other than market institutions. Such means may be tied to non-economic social and political institutions, including gift exchange or state-controlled redistribution and price-setting. Hence, other tools of analysis, namely “substantivist” economics, must be employed to understand them. Polanyi concluded that ancient Greece did not have a developed market system until the Hellenistic period. Before that time, the economy of ancient Greece did not comprise an independent sphere of institutions, but rather was “embedded” in other social and political institutions. Thus, Polanyi opened the door through which scholars could begin to examine the ancient Greek economy free from the normative parameters originally imposed on the debate. Unfortunately, the grip of the old parameters has been very strong and the debate has never completely freed itself from their influence.

The Finley Model and Its Aftermath

At present the most widely accepted model of the ancient Greek economy is that which was first set forth by Moses Finley in 1973. This view owes much to the Weber-Hasebroek-Polanyi line of analysis and holds that the ancient Greek economy was fundamentally different from the market economy that predominates in most of the world today. Not only was the ancient Greek economy much smaller in scale than economies today, it also differed greatly in quality.

Although the ancient Greek word oikonomia is the root of our modern English word “economy,” the two words are not synonymous. Whereas today “economy” refers to a distinct sphere of human interactions involving the production, distribution, and consumption of goods and services, oikonomia meant “household management,” a familial activity that was subsumed or “embedded” in traditional social and political institutions. True, the Greeks produced and consumed goods, engaged in various forms of exchanges including long-distance trade, and developed monetary systems employing coinage, but they did not see such activities as being part of a distinct institution which we call the “economy.”

According to Finley’s model, the subordination of economic activities to social and political ones was a byproduct of a Greek value system that emphasized the wellbeing of the community over that of the individual. Economic activity was necessary in this system only in so far as the individual male citizen had to provide sustenance for himself and his family. This could be accomplished simply by farming a small plot of land. Beyond that, the male citizen was expected to devote himself to the wellbeing of the community by participating in the public religious, political, and military life of the polis.

On the other hand, ancient Greek values held in low esteem economic activities that were not subordinated to the traditional activities of managing the family farm and obtaining goods for necessary consumption. So-called banausic work, which included manufacturing, business, and trade (which were not tied to the land and the family farm), and what we would call “capitalism” (investing money to make more money) were considered to be incompatible with active participation in the affairs of the polis and even as unnatural and morally corrupting. A life on the land, farming to produce only so much as was needed for consumption and leaving enough leisure time for active participation in the public life of the polis, was the social ideal. Production and exchange were to be undertaken only for personal need, to help out friends, or to benefit the community as a whole. Such activities were not to be undertaken simply to make a profit and certainly not to obtain capital for future investment and economic growth.

Given the limits put on economic activity by traditional values and the absence of a modern conception of the economy, agriculture comprised the bulk of production and exchange. Most production, therefore, was carried out in the countryside and cities were net consumers rather than producers, living off the surplus of the countryside. With limited technology and no understanding of economies of scale, cities were not hubs of industry, and manufacturing existed only on a small scale. Cities were mainly places for people to live as well as religious and governmental centers. Their contribution to the economy was only to demand the surplus produce of the countryside, manufacture limited amounts of goods, and provide market places and ports of trade for the exchange of goods.

Since the bulk of economic wealth was produced from the land and banausic occupations were not esteemed, the elite of ancient Greek society were landowners who consequently dominated politics, even in democratic poleis like Athens. Such men had little interest in manufacturing, business, and trade and, like their society as a whole, did not consider the economy as a distinct sphere separate from social and political concerns. Thus, their official policies with regard to the economy were much different from that of modern states.

Modern states undertake policies with specifically economic goals, desiring in particular to make their national economy more productive, to expand or grow, thereby increasing the per capita wealth of the state. Ancient Greek city-states, on the other hand, had an interest and involvement in what we would call economic activities (trade, minting coins, production, etc.) that, like oikonomia on the household level, were consumptive in nature and fulfilled traditional social and political needs, not strictly economic ones.

Finley’s model also holds that there was neither a “market mentality” nor interconnected markets that could operate according to impersonal price-setting market mechanisms. Individual city-states certainly had “market places” (agorai), but such markets existed largely in isolation with minimal connections among them. Thus, prices were set according to local conditions and personal relationships rather than in accordance with the impersonal forces of supply and demand. This was so in part because of the Greek socio-political emphasis on self-sufficiency (autarkeia), but also because the physical environment and industry of the eastern Mediterranean tended to produce similar goods, so that there were few items that a city-state needed which could not be obtained from within its own boundaries.

Moreover, according to Finley’s model, the interests of Greek city-states in trade were likewise limited by traditional political concerns to the consumptive goals of ensuring the import of adequate supplies of “material wants,” such as food at reasonable prices for their citizens, and revenue which could be obtained from taxes on trade. The former goal could be fulfilled by making laws that required or provided incentives for traders to bring grain into the city. Laws such as these were merely extensions of traditional political policies, like conquest and plunder, but in which a less violent form of acquisition would now be undertaken. But though the means had changed, the ends were still political; there was no interest in the economy per se. The same holds true for the traditional need of city-states for revenue to pay for public projects, such as temple building and road maintenance. Here again, old and often violent methods of obtaining revenue were augmented through such things as taxes on trade.

Finley’s model has had a great impact on those who study the ancient Greek economy and is still widely accepted today. But although the general picture it presents of the ancient Greek economy has not been superceded, the model is not without flaws. It was inevitable that Finley would overstate his model, since it attempted to encompass the general character of the ancient Greek economy as a whole. Thus, the model makes little distinction between different regions or city-states of Greece, even though it is clear that the economies of Athens and Sparta, for example, were quite different in many respects. Finley also treats the various sectors of the economy (agriculture, labor, manufacturing, long-distance trade, banking, etc.) as if they were all governed equally in accordance with the general tenets of the model, despite the fact that, for example, there were significant differences between the values that applied in the landed economy and those that prevailed in overseas trade. Lastly, Finley’s model is synchronic and hardly acknowledges changes in both the quantity and the quality of the economy over time.

Some close examinations of the various sectors of the ancient Greek economy in different places and at different times have supported Finley’s model in its general outlines. But they have been matched by just as many studies that have revealed exceptions to the model. Thus, one recent trend in the scholarship has been to try to revise the Finley model in light of focused studies of particular sectors of the economy at specific times and places. Another trend has been simply to ignore the Finley model and bypass the old debate altogether by examining the ancient Greek economy in ways that make them irrelevant. Basically, given the quantity and the quality of the available evidence, our attempts to understand the ancient Greek economy are greatly affected by the perspective from which we approach it. We can choose to try to characterize the entire ancient Greek economy in general, to see the forest as it were, and debate whether it was more or less similar to our own. Or we can focus in on the trees and undertake narrow studies of particular sectors of the ancient Greek economy at specific times and places. Both approaches are useful and not necessarily mutually exclusive.

The Archaic Period

Finley’s model holds most true for the Archaic period (c. 776-480 B.C.) of ancient Greek history. Archaeological evidence and literary references from such works as the epic poems of Homer (the Iliad and the Odyssey), the Works and Days of Hesiod, and the works of the lyric poets attest to an economy that was generally small in scale and centered on household production and consumption. This is not surprising, since it was during the Archaic period that Greek civilization was re-emerging from a “Dark Age” of upheaval and forming its basic social, legal, political, and economic institutions. The fundamental political unit, the polis or independent city-state, appears at this time as do non-monarchal governments allowing for at least some degree of political participation among a broad swath of citizens.

For the most part, governments did not actively involve themselves in economic matters, except during the occasional political upheavals between “haves” and “have-nots” in which land might be confiscated from the few and redistributed to the many. Despite the fact that much of the Greek mainland is mountainous and the rivers generally small, there was enough fertile land and winter rainfall so that agriculture could account for the bulk of economic production, as it would in all civilizations before the modern industrial era. But unlike the large kingdoms of the Near East, Greece had a free-enterprise economy and most land was privately owned. Agriculture was carried out primarily on small family farms, though the Homeric epics indicate that there were also some larger estates controlled by the elite and worked with the help of free landless thetes whose labor would be needed especially at harvest time. Slaves existed, but not in such large numbers as to make the economy and society dependent on them.

As the populations of cities were fairly small, crafts and manufacturing were largely carried out within households for internal consumption. Both literary accounts and material remains, however, indicate that there was a certain amount of specialization. Artisans are referred to in the Homeric epics and the level of craftsmanship seen on items, such as metal work and painted pottery, was not likely to have been accomplished by non-specialists. Nevertheless, without large-scale manufacturing, safety from brigands on land and pirates at sea, and a monetary system employing coinage (until late in the sixth century), markets were necessarily small, devoted to local products, and certainly not interconnected into a price-setting market economy. Trade was limited mostly to local exchanges between the countryside and the urban center of city-states. Farmers might load up their surplus goods on a small ship to sell them in a neighboring city, as Hesiod attests, but long-distance sea-borne trade was devoted almost exclusively to luxury items, such as precious metals, jewelry, and finely-painted pottery. Moreover, gift exchanges in accordance with social traditions were as prominent if not more so than impersonal exchanges for profit. In general, those who engaged in banausic occupations on more than a part-time basis and sought profit from such activities were looked down on and did not hold positions of prestige in society or government.

Nevertheless, it cannot be denied that the scale of the Greek economy grew during the Archaic period and if not per capita, at least in proportion to the clear growth in population. Population increases and the desire for more land were the primary impetuses for a colonizing movement that established Greek poleis throughout the Mediterranean and Black Sea regions during this period. These new city-states put more land under cultivation, thereby providing the agriculture necessary to sustain the growing population. Moreover, archaeological evidence for the dispersal of Greek products (particularly pottery) over a wide area indicate that trade and manufacturing had also expanded greatly since the Dark Age. It is probably no coincidence that the end of the Archaic period witnessed for the first time a divergence between the designs of merchant vessels and warships, a distinction that would become permanent. Also, after the invention of coinage in Asia Minor in the early sixth century B.C., even though various other forms of money and barter continued to be employed throughout the course of ancient Greek history, the Greeks were quick to adopt coinage and it became the predominant means of exchange from the end of the sixth century onward. The aforementioned economic trends are traced in an important recent book by David Tandy, who argues that they had a fundamental impact on the development of the social and political organization and values of the Archaic polis.

Key Economic Sectors of the Classical Period

During the Classical period of ancient Greek history (480-323 B.C.), continued increases in population as well as political developments influenced various sectors of the economy to the extent that one can see a growing number of deviations from the Finley model. Evidence concerning the economy also becomes more abundant and informative. Thus, a more detailed description of the economy during the Classical period is possible and more attention to the distinctions between its various sectors is also desirable.

In light of the cautionary statements made earlier in this article about overgeneralization, it is important to note that great variation existed among the regions and city-states of the ancient Greek world, especially during the Classical period. Athens and Sparta are famous examples of two almost polar opposites in their social and political organizations and this is no less true with regard to their economic institutions. Given, however, the fact that Athens is the best documented and most studied place in ancient Greek history, the various sectors of the ancient Greek economy during the Classical period will be discussed primarily as they existed in Athens, despite the fact that it was in many ways exceptional. Significant variations from the Athenian example will be noted, however, as will some recent trends in scholarship.

Public and Private Economic Sectors

It is first necessary to distinguish between the public and private sectors of the economy. Throughout most of ancient Greek history before the Hellenistic period, a free enterprise economy with private property and limited government intervention predominated. This places Greece in sharp contrast to most other ancient civilizations, in which governmental or religious institutions tended to dominate the economy. The main economic concerns of the governments of the Greek city-states were to maintain harmony within the private economy (make laws, adjudicate disputes, and protect private property rights), make sure that food was available to their citizenries at reasonable prices, and obtain revenue from economic activities (through taxes) to pay for government expenses.

Athens had numerous laws to protect private property rights and had officials and law courts to enforce them. In addition, there were officials who oversaw such things as weights, measures, and coinage to make sure that people were not cheated in the market place. Athens also had laws to ensure an adequate supply of grain for its citizens, such as a law against the export of grain and laws to encourage traders to import grain. Athens even had agreements with other states in which the latter gave favorable treatment to traders bound for Athens with grain.

On the other hand, Athens did not tax its citizens directly except in cases of state emergencies (eisphorai) and in requiring the wealthiest citizens to perform public services (liturgies). Most taxes were indirect: market taxes, port taxes, import-export taxes, and taxes on foreigners who took up long-term residence in Athens. Taxes were collected by companies of private tax farmers who bid on contracts issued by the state. In addition to taxes, Athens obtained revenue from leases of publicly owned lands and mines. Revenue was necessary for various government expenditures, including administrative costs, public festivals, and maintenance of widows and orphans of soldiers who died in battle as well as building ships’ hulls for the navy, walls for the city, and temples for the gods. Such state expenditures could have a significant impact on the economy, as is clear from the large quantities of money and labor that appear in the inscribed accounts of the building projects on the Athenian acropolis.

Although the Finley model is right in many respects with regard to the limited interest and involvement of the state in the economy, one recent trend has been to show through carefully focused examinations of specific phenomena that Finley pressed his case too far. For example, Finley drew too sharp a distinction between the interests of non-citizen (and, therefore, non-landowning) traders and the landed citizens who dominated Athenian government. It is true that the latter might not have exactly the same economic interests as the former, but the interests of the two were nevertheless complementary, for how could Athens get the grain imports it required without making it in the interest of traders to bring it to Athens?. Moreover, it has been argued that the policies of Athens with regard to its coinage betray a state interest in the export of at least one locally produced commodity (namely silver), something completely discounted by the Finley model.

But again, Finley was probably right to argue that during the Archaic and Classical periods the vast majority of economic activity was left untouched by government and carried out by private individuals. On the other hand, by the Classical period a self-sufficient household economy was an ideal that was becoming increasingly difficult to maintain as the various sectors of economic activity became more specialized, more impersonal, and more profit oriented as well.

Land

As in the Archaic period, the most important economic sector was still tied to the land and the majority of agriculture continued to be carried out on the subsistence level by numerous small family farms, even though the distribution of land among the population was far from equal. Primary crops were grains, mostly barley but also some wheat, which were usually sown on a two-year fallowing cycle. Olives and grapes were also widely produced throughout Greece on land unsuitable for grains. Animal husbandry focused on sheep and goats, which could be moved from their winter lowland pasturage to the moister and cooler mountainous regions during the hot summer months. Cattle, horses, and donkeys, though less numerous, were also significant. While usually sufficient to support the population of ancient Greece, unpredictable rainfall made agriculture precarious and there is much evidence for periodic crop failures, shortages, and famines. Consequently, competition for fertile land was a hallmark of Greek history and the cause of much social and political strife within and between city-states.

One recent trend in the study of ancient Greek agriculture is the use of ethnoarchaeology, which attempts to understand the ancient economy through comparative data from better-documented modern peasant economies. In general, studies employing this method have supported the prevailing view of subsistence agriculture in ancient Greece. But caution is necessary, since there have been changes in the physical environment of and settlement patterns in Greece over time that can skew comparative analyses. Ethnoarchaeology has also been used to show that Greek farmers in both ancient and modern times have had to be flexible in their responses to wide variations in local topographical and climatic conditions and, thus, varied their crops and fallowing regimes to a significant degree. Rational exploitation of fluctuations in production brought on by such variations might have been the means by which some farmers were able to obtain enough wealth to rise above their peers and become members of a landed elite and this might point to a productive mentality at odds with the Finley model.

Metals were another important landed resource of Greece and so mining occupied an important place in the economy. Ancient Greeks typically used bronze and iron tools and weapons. There is little evidence that copper, the principal metal in bronze, was ever mined in abundance on mainland Greece. It had to be imported from the island of Cyprus, where it existed in large quantities, and other more distant regions. Tin, the other metal in bronze, was also rare in Greece and had to be imported from as far away as Britain. Iron is relatively plentiful throughout Greece and there is archaeological evidence of iron mining; however, literary references to it are few and so we know little about the process.

Precious metals were used in jewelry, art, and coinage. Athens had an abundance of silver and we know much about its mining industry from surviving inscriptions of government mine leases to private entrepreneurs. The mines were extremely productive, providing Athens with an income of 200 talents per year for twelve years from 338 B.C. onward. One talent was the equivalent of around nine year’s worth of wages for single skilled laborer working five days a week, 52 weeks a year, according to the wage rates we know from 377 B.C. Though productive in silver, ancient Greece was not as rich in gold, which was found primarily in Thrace and on the islands of Thasos and Siphnos.

Recent scholarship continues to focus on the silver mines of Athens, drawing not only on the inscribed mine leases, but also on extensive archaeological investigation of the mines themselves. They tend to indicate that, contrary to the Finley model, mining in Athens was specialized enough and extensive enough to constitute an “industry” in the modern sense of the word and one geared toward growth. In a study of mine-leasing records Kirsty Shipton has shown that the elite of Athens preferred mines leases, with their potential for greater profits, to land leases. Thus, the traditional preference of the elite for the consumptive acquisition of land and disdain for productive investments for profit postulated by the Finley model might be a characteristic feature of the ancient Greek world as a whole, but it does not entirely hold for Athens in the Classical period.

Stone for building and sculpture was another valuable natural resource of Greece. Limestone was available in abundance and fine marble could be found in Athens on the slopes of Mount Pentelikos and on the island of Paros. The former was used in building the Parthenon and the other structures of the Athenian acropolis while the latter was often used for the most famous ancient Greek free-standing and relief sculptures.

Labor

It is notoriously difficult to estimate the population of Athens or any other Greek city-state in ancient times. Generally accepted figures for Athens at the height of its power and prosperity in 431 B.C., though, are in the range of approximately 305,000 people, of which perhaps 160,000 were citizens (40,000 male, 40,000 female, 80,000 children), 25,000 were free resident foreigners (metics), and 120,000 were slaves. Athens was the largest polis and the populations of most city-states were probably much smaller. Citizens, metics, and slaves all performed labor in the economy. In addition, many city-states included forms of dependent labor somewhere in between slave and free.

As stated above, much of the agriculture of ancient Greece was carried out by small farmers who were exclusively free citizens, since non-citizens were barred from owning land. But although being a farmer was the social ideal, good land was scarce in Greece and it is estimated that in Athens about a quarter of the male citizens did not own land and had to take up other occupations for their livelihoods. Such occupations existed in the manufacturing, service, retail, and trade sectors. These “business” occupations were not only socially disesteemed, but they also tended to be small scale. Wage earning was very much looked down upon, since working for another person was thought of as an impingement on freedom and akin to slavery. Thus, free men doing the same work side by side with metics and slaves on the Acropolis building projects earned the same wages. Yet wages appear to have been adequate to make a living. In Athens the typical wage for a skilled laborer was one drachma per day at the end of the fifth century and two and a half drachmai in 377. In the fifth century a Greek soldier on campaign received a ration of 1 choinix of wheat per day. The price of wheat in Athens at the end of the fifth century was 3 drachmai per medimnos. There are 48 choinices in a medimnos. Thus, one drachma could buy enough food for 16 days for one person, four days for a family of four.

One thing that made up for the limited number of free citizens who were willing or had to become businessmen or wage earners was the existence of metics, foreign-born, free non-citizens who took up residence in a city-state. It is estimated that Athens had about 25,000 metics at its height and since they were barred from owning land, they engaged in banausic occupations that tended to be looked down upon by the free citizenry. The economic opportunities afforded by such occupations in Athens and other port cities where they were particularly abundant must have been significant. They attracted metics despite the fact that metics had to pay a special poll tax and serve in the military even though they could not own land or participate in politics and had to have a citizen represent them in legal matters. This is confirmed by the numerous metics in Athens who became wealthy and whose names we know, such as the bankers Pasion and Phormion and the shield-maker Cephalus, the father of the orator, Lysias.

Foreign-born, free non-citizen transients known as xenoi also played an important role in the ancient Greek economy, since it is apparent that many, though certainly not all, those who carried out long-distance trade were such men. Like metics, they too were subject to special taxes, but few rights.

Slaves comprised an undeniably large part of the labor force of ancient Greece. In fact, it is fair to say, as Finley did, that ancient Greece was a “slave dependent society.” There were so many slaves; they were so essential to the economy; and they became so thoroughly embedded into the every day life and values of the society that without slavery, ancient Greek civilization could not have existed in the manner it did. In Classical Athens it has been estimated that there were around 120,000 slaves. Thus, slaves comprised over a third of the total population and outnumbered adult male citizens by three to one.

The slaves of Athens were chattel, that is the private property of their owners, and had few, if any, rights. The demand for them was high as they performed almost every kind of work imaginable from agricultural labor to mining labor to shop assistants to domestic labor even to serving as the police force and secretaries for the government in Athens. About the only thing slaves did not normally do was military service, except in emergencies, when they did that too.

Slaves were supplied by a variety of sources. Many were war captives. Some were enslaved for failure to pay debts, though this was outlawed in Athens in the early sixth century B.C. Some were foundlings, abandoned children rescued and reared in return for their labor as slaves. Of course, the children of slaves would also be slaves. In addition, there was an extensive and regular slave trade that trafficked in people who had become slaves by all the means mentioned previously.

In part because of the diverse means by which slaves were supplied, there was no particular race that was singled out for enslavement. Anyone could become a slave if unfortunate enough, including Greeks. It does appear, however, that a large percentage of slaves in Greece originated in the Black Sea and Danubian regions. In most cases they were probably captives from internecine tribal wars and sold to slave traders who shipped them to various parts of the Greek world.

The treatment of chattel slaves varied, depending on the whims of individual slave owners and the types of jobs done by the slaves. Slaves who worked in the silver mines of Athens, for example, worked in dangerous conditions in large numbers (as many as 10,000 at a time) and had virtually no contact with their owners that could result in human bonds of affection (they were usually leased out). On the other hand, slaves who worked in households assisting the matron of the family in her household tasks were probably treated much better as a rule. Their labor was less strenuous and since they worked in close proximity with their owners’ families, at least some human bonds of affection were likely to form between them and their owners. Some slaves even lived on their own and ran their owners’ businesses largely unsupervised.

One aspect of ancient Greek slavery that is often cited as evidence for it being more “humane” than other slavery regimes is manumission. There is enough evidence for slaves being freed to make us believe that manumission was not uncommon and many slaves could probably hope for freedom, even if most of them never actually obtained it. But manumission was quite self-serving for slave owners, since it made slaves much less likely to risk rebellion in the hope that they might some day be given their freedom. As it turns out, there were only two noteworthy large-scale rebellions of chattel slaves in the history of ancient Greece. Moreover, inscriptions from the religious sanctuary of Delphi from the Hellenistic period show that slaves almost always had to compensate their owners for their freedom, either in the form of cash or some other valuable commodity, like their own children, who would also be slaves of the master and eventually replace their aging parents with young labor. So it is a dubious matter to say that the manumission of slaves is a testament to the humanity of ancient Greek slavery. Individual slaves might benefit, but the practice allowed the institution of slavery to flourish throughout Greek history.

When slaves were freed, they did not become citizens, but rather metics. Yet even though they still could not possess the full rights and privileges of citizens, they could prosper economically, just as other metics could. In Athens the prominent and wealthy metic banker, Pasion, for example, was originally a slave who assisted his masters Antisthenes and Archestratus. By the terms of his will, Pasion in turn manumitted his own slave assistant, Phormion, and not only left him his bank, but also stipulated that Phormion marry his widow and manage the inheritance of his son, Apollodorus.

In addition to chattel slavery, there were other forms of dependent labor in the ancient Greek world. One famous example is helotry, known principally from the city-state of Sparta. The helots of Sparta were agricultural serfs, indigenous peoples conquered by the Spartans and forced to work their former lands for their Spartan overlords. They were not the private property of the individual Spartans, who were allotted the former lands of the helots, and could not be bought or sold. But their mobility was completely restricted; they had very few rights; they had to turn over a large percentage of their produce to their Spartan overlords; and they were routinely terrorized as a matter Spartan state policy. The one drawback for the Spartans of using helot labor, though, was that the helots, living still on their former homeland and having a sense of ethnic unity, were prone to revolt and did so on several occasions at great cost both to themselves and to the Spartans.

With the exception of Sparta and a few other city-states, women in ancient Greece, free citizens or otherwise, could not control land. They could own it in name only and were not allowed to dispose of it as they saw fit, but were legally obliged to yield control of it to a male representative. Since land was the chief source of wealth in the ancient Greek economy, the inability to control it severely constrained the economic role of women. The ideal was for women to get married, have children, raise them, and carry out the indoor tasks of the household, such as cooking and textile production.

Of course, not all women could live up to such an ideal at all times. Women undoubtedly helped outdoors on the farm during harvest time. Those of poorer families might by necessity have to sell in the market place what little surplus produce their households could generate or perform service-oriented jobs for others for wages. Female metics and slaves did similar work and also comprised the majority of the prostitutes of Athens, which was a legal profession. Prostitutes, though, ranged from lowly brothel workers to high-class call girls, the latter of which, such as Aspasia, sometimes obtained prominence in Athenian society.

Despite their disdain for certain types of work and their dependence on slave labor, most Greeks had to work hard to make a living. Yet they did not develop a “work ethic” and did not consider work to be ennobling, but simply necessary. Hence, if one could afford a slave to do one’s work, then one bought a slave. The availability of cheap slaves was a major factor in Greek attitudes toward labor and may also explain why there were no labor unions in Greece. For how could wage-earners pressure their employers for better conditions or wages when the latter could always replace them with slaves if necessary?

Manufacturing

Slavery also affected manufacturing in ancient Greece. It is often said that technology and industrial organization stagnated in ancient Greece because the availability of cheap slave labor obviated any imminent need to improve them. If one wanted to produce more, one merely bought a few more slaves. Thus, most manufactured products were literally hand-made with simple tools. There were no assembly lines and no big factories. The largest manufacturing establishment we know of was a shield factory owned by the metic, Cephalus, the father of the orator, Lysias, which employed 120 slaves. Most manufacturing was carried out in small shops or within households. Hence, in comparison with agriculture, manufacturing comprised a small part of the ancient Greek economy.

Nevertheless, documentary and archaeological evidence attests to a wide variety of manufactured items and some in large quantities. Among the most extensively manufactured products was clay pottery, the remains of which archaeologists have found scattered throughout the Mediterranean world. The wheel-made pots took many shapes appropriate for their contents and use, which ranged from hydria for water to amphorae for olive oil and wine to pithoi for grain to aryballoi for perfume to kylikes for drinking cups. Finely painted vases were also manufactured for decorative and ritual purposes. The finest, most numerous, and widely dispersed of these were made in Corinth, Aegina, Athens, and Rhodes.

Literary accounts as well as scenes from painted vases make it clear that the ancient Greeks left textile production largely to women. The principal material they worked with was wool, but linen from flax was also common. Textiles were used in turn in the manufacture of clothing. Again, women were largely responsible for this and it was done primarily within the household. Textiles were often dyed, the most desirable dye being a reddish purple color derived from aquatic murex snails. These had to be harvested, mashed into a jelly, and then boiled to extract the dye.

Although the trees of Greece were for the most part not particularly good for woodworking materials and especially not for large-scale building, the Greeks did use wood extensively and, therefore, had to import good timber from places like Macedonia, the Black Sea region, and Asia Minor. Given the countless islands of Greece, it is not surprising that shipbuilding was an important sector of manufacturing. Vessels were needed for commercial as well as military uses. In Athens the state obtained the necessary timber for the ships (and oars) of its navy, but it contracted with carpenters who worked under the supervision of state officials to craft the timber into the warships that were so vital for Athenian power in the Classical period.

Buildings ranged from private houses to monumental stone temples. The former tended to be rather humble, made of unbaked mud brick laid on a stone foundation and covered by a thatched or tiled roof. On the other hand, the great temples of ancient Greece required much organization, many resources, and incredible technical skill. As is evidenced by the extant accounts for the construction of the buildings of the Athenian acropolis, the work was normally contracted out in small units to private individuals who either worked alone or in charge of others to do anything from quarrying marble to transporting wooden beams to sculpting facades. The degree of specialization varied. In some cases we see contractors carrying out a variety of tasks, whereas in others we see them specializing in only one.

Metal crafts were highly specialized. The Greeks smelted iron, but only in wrought form. They were unable to achieve furnace temperatures high enough to make pig iron and did not have the technical know-how to add carbon to the smelting process with enough precision to make steel with any consistency. Blacksmiths crafted body armor, shields, spears, swords, farm implements, and household utensils. Bronze casting reached the level of fine art in Classical Greece. Sculptors used the lost-wax method, in which they first made a clay model of a statue, then covered the model with a layer of wax, which they then covered again with another layer of clay. Small openings were left in the outer clay covering, into which molten bronze was poured. The hot molten bronze melted the wax, which then flowed out another opening in the outer clay covering. After the bronze cooled the outer clay covering was broken off, leaving the cast bronze.

It is clear that in the Classical period in Athens there was much specialization in manufacturing and that the quantity of goods was far greater than that which could have been produced in a purely “household economy.” At the same time, however, the scale and organization of manufacturing was a far cry from those of industrialized civilizations of recent centuries.

Markets and Prices

According to the Finley model, there was no network of interconnected markets to form a price-setting market economy in the ancient Greek world. Although this is true for the most part, like other aspects of the Finley model, the case is overstated. There do, for example, appear to be connections between markets for some commodities, such as grain and probably precious metals as well. In the case of grain, it can be shown that supply and demand over long-distances did have an impact on prices and traders sought to take advantage of the lag-time between price adjustments in order to make a profit. Obviously, though, this is nothing like the modern world in which the price of crude oil changes instantly worldwide in reaction to a change in supply from one of the major producers. For the most part in ancient Greece, prices were set in accordance with local conditions, personal relationships, and haggling.

Government price-fixing was limited. Although there is evidence that Athens, for example, fixed the retail price of bread in proportion to the wholesale price of grain, there is no evidence that it fixed the price of the latter. Even in times of severe grain shortages, Athens was content to allow traders bringing grain to Athens to charge the going rate. In such cases, the state alleviated the crises for its citizens by paying the going rate for the grain and then reselling it to its citizenry at a lower price.

Despite the general absence of interconnected markets, however, there were market places. Each city-state had at least one market place (agora) in the heart of city and a port market (emporion) as well, if it had a good harbor. The agora was a place of much activity, serving not only as a center of economic exchange, but also as a political, religious, and social center. In the agora one could find law courts, offices for public officials, and coin mints as well as shrines and temples. In fact, agorai were considered sacred places to the degree that they were marked off with boundary stones across which no one who had the stain of religious pollution could cross. Within the agora economic activities were segregated by types of goods, services, and labor so that there were specific places where one could regularly find the fishmongers, blacksmiths, money changers, and so on.

Ancient Greek city-states regulated the economic activities that took place in their markets to a certain degree. Public officials oversaw weights, measures, scales, and coinage to limit and resolve disputes in exchanges as well as to ensure state interests. For example, Athens employed a publicly owned slave to check coins and guard against counterfeiters. In this way, Athens protected the integrity of its own coinage as well as the interests of buyers and sellers. The state ensured the affordability of key goods, such as bread, by fixing its retail prices relative to the wholesale price of grain. Various activities in the market place were also taxed by the state. Port and transit taxes affected exchanges in emporia like the Piraeus of Athens and xenoi had to pay a special tax for engaging in transactions in the agora.

Trade

Local trade between countryside and urban center and on the retail level within cities continued largely as it had in the Archaic period. But rather than producers transporting and selling their surplus goods directly in city markets, specialized retailers (kapeloi) who profited as middlemen between producers and consumers became more the norm. Local trade goods could be probably transported over short distances on land. But long-distance trade over land was difficult and time consuming, given the mountainous topography of Greece and the fact that the fragmented city-states of Greece never built an extensive system of paved roads that tied them together in the manner of the Roman Empire. Most “roads” between cities were single track and suitable only for pack animals, though there were some on which wheeled carts could be pulled by oxen, donkeys, or mules.

Long-distance trade was primarily done by merchant ships over the waters of the Aegean, Mediterranean, and Black Seas. Evidence from the Attic Orators indicates that during the Classical period overseas trade developed into a specialized and important sector of the economy. Trade was carried out by private individuals and not organized by the state. A typical trading venture involved a non-citizen trader (emporos) who either owned his own ship or rented space on a ship owned by another (naukleros). In most cases described by the orators, the traders typically borrowed money from a citizen lender to finance the venture. There is some dispute among scholars whether such loans constituted productive borrowing on the part of the traders or were just a type of insurance, because the loans would only have to be repaid if the ship and cargo reached their contracted destinations. From the perspective of the lenders, the loans were certainly productive, since they charged interest at a rate much higher than that which applied to loans on the security of land, anywhere from 12 to 30%.

Marine archaeology has recently increased our knowledge of merchant vessels and their cargoes tenfold by the discovery of several ancient shipwrecks. The ships appear to have been generally small by modern standards. In 1968 the well-preserved wreck of a merchant ship from c. 300 B.C. was found off the coast of Kyrenia in Cyprus. Being only 35 feet long and 15 feet wide with a capacity of 30 tons, it is probably the kind of merchant vessel that made short hauls and kept within sight of the coastline. But other shipwrecks as well as evidence from the Attic Orators seem to indicate that the typical capacity of merchant vessels that traveled over long distances on the open sea was some 80 tons.

Many of the goods traded throughout ancient Greek history were luxury goods, manufactured items, such as jewelry and finely painted vases, as well as specialty agricultural products like fine wine and honey. Necessities were also traded, however, for without long-distance trade, many Greek cities would not have been able to obtain metals, timber, wine, and slaves. One of the most extensively traded necessity items was grain, which came to Athens typically from the Black Sea region, Thrace, and Egypt. According to the orator, Demosthenes, Athens imported some 400,000 medimnoi (approximately 4,800,000 liters) of grain per year in the late fourth century from the Crimean kingdom of the Bosporus alone.

Chiefly because of the need for certain imports, such as grain and timber, and for revenue drawn from taxes on trade, many cities did have an interest and involvement in overseas trade. Athens in particular made laws that prohibited the export of grain produced in Athens and required that loans on trading ventures be for cargoes of grain and that ships bringing grain into the Piraeus sell one-third of it on the spot and the remaining two-thirds in Athens. Athens also instituted special courts to expedite the adjudication of disputes involving traders, granted honors and privileges to anyone who performed extraordinary services relating to trade for the city, and made agreements with other states to obtain favorable conditions for those bringing grain to Athens.

In all the aforementioned examples Athens’ chief interest was to supply itself with imported grain so that its citizenry could obtain food at reasonable prices. Athens was not particularly concerned with helping traders and enhancing their profits per se or in obtaining a trade surplus or to protect home produced goods against imported foreign ones. To this extent, then, the Finley model holds true, even if it is clear that the Athenian state recognized that its interests were complementary with those of foreign traders and, thus, had to help them in order to help itself.

Moreover, it does appear that Athens had some concern about its home produced products as well, at least in the case of silver. Xenophon, an Athenian writer from the fourth century, noted that Athens could always be assured of traders bringing their goods into Athens, because traders knew they could always get a valuable trade commodity, namely silver in the form of Athenian coinage, in exchange. To ensure the demand for its silver, Athens took great care to maintain the reputation of its coinage for high quality and to associate that reputation with a familiar design that went unchanged for several centuries. Such a policy attests to a state interest in production and exports, at least in this sector of the economy.

Athens was also motivated to encourage trade to obtain revenue from taxes. Both transient and resident foreigner traders had to pay poll taxes in Athens that citizens did not. Athens also had various port, transit, and market taxes that would benefit by increased trade, including a two percent tax on all imports and exports.

Money and Banking

With few exceptions (Sparta being the most famous), the Greeks of the Classical period had a thoroughly monetized economy employing coinage whose value was based on precious metals, principally silver. The value of the coinage was commensurate to the value of the precious metal it contained with a small mark-up, since the value of the metal was guaranteed by its issuing state. The tie of the Greek monetary system to the supply of precious metals limited the ability of governments to influence their economies through the manipulation of their money supplies. However, we do know of cases when states debased their coinages for such purposes.

Ancient Greek coins are similar in appearance to modern ones. But like other manufactured products in ancient Greece, they were made by hand. A blank metal circular “flan” was placed on an obverse die that rested on an anvil and then was struck with a hammer bearing a reverse die. The nature of the process naturally produced coins in which the image was often poorly centered on the flan. Nevertheless, the issuing authority, usually a government, was clear as the designs or “types” of the coins expressed an image symbolic of the issuing authority and were often augmented by a “legend” of letters that spelled out an abbreviation of the issuing authority’s name.

Coinage was issued in a variety of denominations and weight standards by various city-states. The chief weight standards of the Classical period were the Attic, Aeginetan, Euboiic, and Corinthian. The basis of the Attic standard was the silver tetradrachm of 17.2 grams, which retained the design of the head of Athena on the obverse and her symbolic owl on the reverse throughout the Classical period. It was the most widely circulated coinage during this time and appears in large numbers of hoards found throughout the Greek world and beyond. This was due not only to the far reach of Athenian trade, but also to Athenian imperialism. Athens used its coinage to pay for its military operations abroad and even issued the “Standards Decree,” which for a few decades of the fifth century required the many cities of the Aegean Sea under its control to discontinue their local types and use only Athenian coinage. The local coinage had to be turned in, melted down, and re-struck as Athenian coinage for a fee. Unlike that of Athens, most city-states’ coinages circulated only locally. When such local issues were taken abroad, they were probably treated as bullion, as can be inferred from test-cuts often found on them.

A recent debate among scholars concerns the degree to which coinage was an economic or a political phenomenon in the ancient Greek world. Finley’s model, of course, holds that coinage had strictly political functions. Finley believed that coinage was merely a tool designed to reinforce and project a city-state’s civic identity. States minted coins not to facilitate economic transactions among their citizens, but merely for state purposes so that, for example, it had a convenient medium through which to collect taxes or make state expenditures. Athens’ “Standards Decree” was not undertaken for economic gain, but for political purposes to facilitate tribute payments and to show Athens’ subjects who was boss.

But here again Finley goes too far. Although the type of a Greek coin certainly expressed political symbols and could, therefore, serve as a political tool, such symbolism was largely lost on people who used the coins in places like Egypt, the Levant, Asia Minor, and Mesopotamia, where hoards of Greek coins have been found in abundance. The fact that they could use the coins independently of their original political context (and for what else besides economic purposes then?) is a good reason to believe that the Greeks could do so as well. Moreover, as Henry Kim has recently argued, the minting of large quantities of small-denomination coinage from the outset in Greece shows that the state did have a concern for the wide use of coinage at the micro-level by common people in day-to-day economic exchanges, not just for large-scale public and political purposes.

Nevertheless, one of the most active areas of research on ancient Greek money and coinage today concerns its representational nature and place within sectors other than the economy, including religion, society, and politics. Both Leslie Kurke and Sitta von Reden have argued that the advent of a monetized economy employing coinage need not have undermined traditional values or led to a disembedding of the economy. Rather, the symbolic aspect of coinage could be manipulated to reinforce traditional social and religious practices that were non-economic in the modern sense. In her analysis of the poetry of Pindar, for example, Kurke argues that the poet re-embedded money within traditional social values, thereby allowing the landed aristocratic elite to embrace money and its potential for de-personalizing social interactions without discarding the old social ties and values that bolstered their privileged place in society. Although von Reden believes that the use of coinage arose within an embedded economic context and, therefore, did not have to be re-embedded, she has argued that coinage and other forms of money did not have an intrinsically economic use or meaning in ancient Greece, but rather multiple meanings that were determined by the context within which they were used, which could be social, religious, or political as well as economic.

Given that the ancient Greeks did have a monetized economy, it is not surprising that they also developed banking and credit institutions. It is generally agreed that at the very least, bankers, who were metics as a rule (note Pasion and Phormion above), performed various functions from money-changing to securing deposits in cash and other assets. The question whether bankers lent out money deposited by others at interest, however, is the subject of some debate. Paul Millett, a student of Finley, not surprisingly argues in his book, Lending and Borrowing in Ancient Athens, that bankers did not loan out other peoples money for interest and he formulates a model in which lending and borrowing were predominantly done for consumptive purposes and, therefore, thoroughly embedded in traditional social relations. In contrast, Edward Cohen’s book, Athenian Economy and Society: A Banking Perspective, employs a close philological analysis of the evidence in his assertion that productive lending and borrowing, divorced from concerns for personal relationships, were common in Classical Athens and that bankers did indeed lend out deposited money at interest. Although Millett may be right that much of the lending and borrowing in Athens was for consumptive purposes, particularly those secured by landed property, it is hard to deny that the evidence of productive lending and borrowing from banking practices, numerous maritime loans, and even temple loans in the Classical period constitute something more than just exceptions to the rule.

Economic Changes during the Hellenistic Period

In large part owing to the Near Eastern conquests of Alexander the Great, but also because of social and economic changes that had already been occurring during the Classical period, the economy of the Hellenistic period (323-30 B.C.) grew immensely in scale. The Finley model is probably right in general to hold that the essentially consumptive nature of the economy in the traditional Greek homelands changed little during this time. But it is clear that there were significant innovations in some places and sectors on account of the collision and fusion of Greek notions of the economy with those of the newly won lands of the Near East. Thus, we see greatly increased government control over the economy, as evidenced most strikingly in the surviving papyrus records of the Greek Ptolemaic dynasty that ruled Egypt.

A large percentage of the land and, therefore, agriculture, was controlled by the Greek royal dynasties that ran the Hellenistic kingdoms. Peasants whose status lay somewhere between slave and free not only worked the king’s lands, but were also often required to labor on other royal projects. The Ptolemies of Egypt dominated agriculture to such an extent that they instituted an official planting schedule for various crops and even loaned out the tools used by farmers on state-owned lands. Almost all produce from these estates was turned over to the government and redistributed for sale to the population. Some crown lands, however, were assigned to government officials or soldiers and though technically still the property of the state, they often came to be treated as de facto private property.

The Ptolemaic state also involved itself in various manufacturing processes, such as olive oil production. Not only were the olives cultivated on state-controlled lands by peasant labor, but the oil was extracted by contracted labor and sold at the retail level by licensed dealers at fixed prices. However, the state probably had no intention to improve efficiency or to provide better quality olive oil at lower prices to its citizens. The Ptolemies instituted a tax on imported olive oil of 50 percent that was essentially a protective tariff. The goal of the government seems to have been to protect the profits of its state-run business.

Yet for all its interference in the economy, the Ptolemaic government did not assemble a state merchant fleet and instead contracted with private traders to transport grain to and from public granaries. It also left it up to private traders to import the few goods that Egypt needed from abroad, including various metals, timber, horses, and elephants, all of which were essential for the Ptolemies’ standing mercenary army and fleet. But although the Ptolemies also exported wheat and papyrus, for the most part, the economy of Egypt was a closed one. Unlike the other Hellenistic kingdoms, Egypt minted coins on a lighter standard than the Attic one universalized by Alexander the Great. Moreover, in 285, the Ptolemies barred the use of foreign coins in Egypt and required them to be turned in to government officials, melted down, and re-minted as Egyptian coinage for a fee. Although Egypt controlled gold mines in Nubia, it did not produce silver and had chronic shortages of silver coins for daily transactions. Thus, many exchanges were performed in kind rather than in cash, even though value was always expressed in cash equivalents.

Despite its chronic shortages of silver coins and its closed coinage system, Egypt still had a coin-based economy largely because of Alexander the Great, who flooded the economies of the eastern Mediterranean with coins and monetized some places in the Near East for the first time. Along with coinage, Greek banking practices also made their way into these areas. Thus, the general scale of economic activities increased as large kingdoms of the Near East and the Greek mainland and islands became more interconnected. Although this was offset to some degree by political instability and warfare during the Hellenistic period, in general we do see economic activity on a larger scale and increased specialization as some places, such as Tyre and Sidon in Phoenicia, became renowned for particular products, in this case purple dye and glassware respectively. Moreover, thousands of amphorae whose handles were stamped with names of issuing magistrates have been found that, if nothing else, reveal a very high volume of pottery production and may also allow scholars some day to reconstruct in more detail other aspects of the economy, such as agricultural production, land tenure, and trade patterns.

The Hellenistic period is known for its technological innovation and some new technologies did have an impact on the economy. Archimedes’ screw-like pump was used to remove water from mines and to improve irrigation for agriculture. In addition, new varieties of wheat and the increased use of iron ploughs improved yield while better grape and olive presses facilitated wine and oil production. Unfortunately, some of the most impressive technological innovations of the Hellenistic period, such as Heron’s steam engine, were never applied in any significant way. Thus, most production continued to be low tech and labor intensive.

All in all, then, although the scale of the economy increased during the Hellenistic period, consumption still seems to have been the primary goal. Technology was not applied as much as it might have been to increase production. States were much more involved in economic affairs, both in controlling production and in collecting taxes on countless items and activities, but mostly just to extract as much revenue from them as possible. The revenue was spent in turn in royal benefactions (euergetism), but mostly only for ostentatious display that threw money into non-productive sink holes.

Conclusion

The foregoing survey shows that the Finley model provides a reasonable, if simplified, general picture of the ancient Greek economy. Overall, the ancient Greek economy was very different from our own. It was much smaller in scale and differed in quality as well, since it generally lacked the productive growth mentality and the interconnected markets that are so characteristic of most of the world economy today. With regard to the details, however, recent studies are showing that the Finley model does at least need to be revised. As more research is done, it may even be necessary to replace the Finley model altogether in favor of one that fits the evidence better. In the meantime, though, we can still use Finley’s model as a basic description while being careful to acknowledge the contradictory evidence provided by recent studies and continuing to investigate the various sectors of the ancient Greek economy at various times and places.

Select Annotated Bibliography

The bibliography on the ancient Greek economy is enormous and it would be counterproductive to list all works here. Therefore, I list only a selection of the essential primary and secondary works, preferring more recent works in English for the sake of students. Further and more specialized works may be found within the bibliographies of the works listed below.

Primary Sources

Literary Works

Many of the literary works listed below are available in the Loeb Classical Library and Penguin Classics series in English translations.

Aristotle, Politics (particularly 1.1258b37-1.1259a5)

In his study of the polis, Aristotle devotes this section to modes of acquisition and criticizes what we would call “capitalism.”

[Aristotle], Oikonomikos (Economics – “household management”)

Book 2 shows how states obtain revenues. The methods are largely coercive, not productive, such as cornering the market in grain during a famine, debasing coinage, etc.

Demosthenes and [Demosthenes], speeches

Especially useful are several speeches for lawsuits involving economic matters.

Hesiod, Works and Days

A poem containing advice and attitudes about farming in the early Archaic period, c 700 B.C.

Homer, Iliad and Odyssey

Two great epic poems with much information about economic practices at the outset of the Archaic period, c. 800-750 B.C.

Isokrates, speeches (especially Trapezitikos and On the Peace)

On the Peace argues for economic activity rather than warfare as a means of obtaining revenues for the state. Trapezitikos concerns a lawsuit involving trade and banking.

Lysias, speeches (especially On the Grain Retailers)

Plato, Republic and Laws

These two dialogues concern the organization of the polis. Although the Republic represents the ideal city-state and the Laws presents a more realistic picture, both betray an elitist disdain for non-landed economic activities.

Xenophon, Oikonomikos (Economics – “household management”) and Poroi (Revenues)

Two extended essays on household management and the means by which the state may obtain more revenues, respectively. The latter is one of the most important documents concerning state interests in trade and mining.

[Xenophon] “The Old Oligarch” (or “Constitution of the Athenians”)

This is an anonymous mid-fifth-century B.C. political pamphlet that argues that the life-blood of Athenian democracy is the economic exploitation of the so-called “allies” of Athens.

Collections of Primary Sources: Documentary, Epigraphic, and Material

Burstein, S.M. The Hellenistic Age from the Battle of Ipsos to the Death of Kleopatra VII. Cambridge: Cambridge University Press, 1985.

A collection of documents, including inscriptions, translated into English.

Fornara, C.W. From Archaic Times to the End of the Peloponnesian War, second edition. Cambridge: Cambridge University Press, 1983.

A collection of documents, including inscriptions, translated into English.

Harding, P. From the End of the Peloponnesian War to the Battle of Ipsus. Cambridge: Cambridge University Press, 1985.

A collection of documents, including inscriptions, translated into English.

Meijer, F. and O. van Nijf. Trade, Transport, and Society in the Ancient World. New York and London: Routledge, 1992.

A sourcebook of documents translated into English.

Thompson, M., O. Mørkholm, and C.M. Kraay, editors. An Inventory of Greek Coin Hoards. New York: American Numismatic Society, 1973.

Essential listing of all discovered hoards of ancient Greek coins up to 1973.

Wiedemann, T. Greek and Roman Slavery. Baltimore: Johns Hopkins University Press, 1981.

Excellent collection of documents on Greek and Roman slavery translated into English.

Secondary Sources

General Works and Surveys

Austin, M.M. and P. Vidal-Naquet. Economic and Social History of Ancient Greece. Berkeley: University of California Press, 1977.

Provides both a survey of the subject and excerpts from the primary sources of evidence. It adheres to the Finley model in general.

Austin, M.M. 1988. “Greek Trade, Industry, and Labor.” In Civilization of the Ancient Mediterranean: Greece and Rome, volume 2, edited by M. Grant and R. Kitzinger, 723-51. New York: Scribner’s.

Often insightful overview of the ancient Greek economy primarily from the Finley perspective.

Cambridge Ancient History (CAH), second edition. Several volumes. Cambridge: Cambridge University Press.

The standard encyclopedia of ancient history with entries on various subjects, including the ancient Greek economy at different periods, by leading scholars.

Finley, M. I. The Ancient Economy, second edition. Berkeley: University of California Press. 1985. (Now available in an “Updated Edition” with a foreword by Ian Morris. Berkeley: University of California Press, 1999.)

The most influential book on the subject since its initial publication in 1973. It takes a synchronic approach to the Greek and Roman economies and argues that they cannot be analyzed or understood in terms appropriate for modern economic analysis. In general, the ancient Greek economy was “embedded” in “non-economic” social and political values and institutions. Heavily influenced by Weber, Hasebroek, and Polanyi.

Hasebroek, J. Trade and Politics in Ancient Greece. Translated by L.M. Fraser and D.C. MacGregor. Reprint. London, 1933. (Originally published as Staat und Handel im alten Griechenland [Tübingen, 1928].)

A classic that greatly influenced Finley.

Hopper, R.J. Trade and Industry in Classical Greece. London: Thames and Hudson, 1979.

Survey of various aspects of the ancient Greek economy in the Classical period.

Humphreys, S.C. “Economy and Society in Classical Athens.” Annali della Scuola Normale Superiore di Pisa 39 (1970):1-26.

An important survey that also argues for focused studies on individual sectors of the ancient Greek economy at particular times and places.

Lowry, S.T. “Recent Literature on Ancient Greek Economic Thought.” Journal of Economic Literature 17 (1979): 65-86.

Michell, H. The Economics of Ancient Greece, second edition. Cambridge: W. Heffer, 1963.

Slightly dated, but useful survey.

Morris, Ian. “The Ancient Economy Twenty Years after The Ancient Economy.” Classical Philology 89 (1994): 351-366.

Excellent survey of new approaches to the study of the ancient Greek and Roman economies since Finley, to whose model the author is generally sympathetic.

Oxford Classical Dictionary (OCD), third revised edition, edited by S. Hornblower and A. Spawforth. Oxford: Oxford University Press, 2003.

Includes brief entries by leading scholars on various aspects of the ancient Greek economy.

Pearson, H.W. “The Secular Debate on Economic Primitivism.” In Trade and Market in the Early Empires, edited by K. Polanyi, C.M. Arensberg, and H.W. Pearson, 3-11. Glencoe, IL: Free Press, 1957.

A concise statement of the influential ideas of Karl Polyani about the ancient Greek economy.

Rostovtzeff, M. The Social and Economic History of the Hellenistic World. Oxford: Oxford University Press, 1941.

Monumental “modernist” approach to a wealth of archaeological evidence about the economy during the Hellenistic period.

Samuel, A.E. From Athens to Alexandria: Hellenism and Social Goals in Ptolemaic Egypt. Lovanii, 1983.

A good survey with an important discussion of ancient Greek attitudes toward economic growth.

Starr, C.G. The Economic and Social Growth of Early Greece, 800-500 B.C. Oxford: Oxford University Press, 1977.

Modernist survey.

Weber, M. Economy and Society. Translated by E. Fischoff et al. Edited by G. Roth and C.

Wittich. Berkeley: University of California Press, 1968. (Originally published as Wirtschaft und Gesellschaft [Tübingen, 1956].)

A classic that greatly influenced Hasebroek and Finley.

Collections

Archibald, Z.H., J. Davies, and G. Oliver. Hellenistic Economies. London: Routledge, 2001.

Collection of articles that take the study of the economy in the Hellenistic period beyond Rostovtzeff.

Cartledge, P., E.E. Cohen, and L. Foxhall. Money, Labour, and Land: Approaches to the Economies of Ancient Greece. London: Routledge, 2002.

Finley, M.I. Economy and Society in Ancient Greece. Edited by B.D. Shaw and R.P. Saller. New York: Viking, 1982.

Garnsey, P. Non-Slave Labour in the Graeco-Roman World. Cambridge: Cambridge Philological Society, 1980.

Garnsey, P., K. Hopkins, and C.R. Whittaker. Trade in the Ancient Economy. Berkeley: University of California Press, 1983.

A collection of articles along Finley lines.

Mattingly, D.J. and J. Salmon. Economies beyond Agriculture in the Classical World. London: Routledge, 2001.

A collection of articles that focuses on the non-agrarian sectors of the ancient Greek and Roman economies with a mind to revising the Finley model.

Meadows, A. and K. Shipton. Money and Its Uses in the Ancient Greek World. Oxford: Oxford University Press, 2001.

A collection of articles on the use of money and coinage in ancient Greece.

Parkins, H. and C. Smith. Trade, Traders, and the Ancient City. London: Routledge, 1998.

Scheidel, W. and S. von Reden. The Ancient Economy. London: Routledge, 2002.

An excellent collection of some of the most important articles on the ancient Greek and Roman economy from the last 30 years with a helpful introduction, notes, and glossary. Especially useful is their “Guide to Further Reading,” pp. 272-278.

Specialized Works

Brock, R. “The Labour of Women in Classical Athens.” Classical Quarterly 44 (1994): 336-346.

Burke, E.M. “The Economy of Athens in the Classical Era: Some Adjustments to the Primitivist Model.” Transactions of the American Philological Association 122 (1992): 199-226.

A good argument that attempts to adjust the Finley model.

Carradice, I. and M. Price. Coinage in the Greek World. London: Seaby, 1988.

A brief, accessible survey.

Cohen, E. E. Athenian Economy and Society: A Banking Perspective. Princeton: Princeton University Press, 1992.

A close philological study of the evidence for banking practices in Classical Athens that argues for a disembedded economy with productive credit transactions.

Engen, D.T. Athenian Trade Policy, 415-307 B.C.: Honors and Privileges for Trade-Related Services. Ph.D. dissertation, UCLA, 1996. (This dissertation is currently being revised for publication as a book tentatively entitled, Honor and Profit: Athenian Trade Policy, 415-307 B.C.E.)

Examines Athenian state honors for those performing services relating to trade and argues for a revision of some aspects of the Finley model.

Engen, D.T. “Trade, Traders, and the Economy of Athens in the Fourth Century B.C.E.” In Prehistory and History: Ethnicity, Class, and Political Economy, edited by David W. Tandy, 179-202. Montreal: Black Rose, 2001.

Argues for the diversity of those responsible for trade involving Classical Athens.

Engen, D.T. “Ancient Greenbacks: Athenian Owls, the Law of Nikophon, and the Ancient Greek Economy.” Historia, forthcoming(a).

Argues that the numismatic policies of Athens may indicate a state interest in exports.

­­­­­Engen, D.T. “Seeing the Forest for the Trees of the Ancient Economy.” Ancient History Bulletin, forthcoming(b).

A review article of Meadows and Shipton, 2001, and Scheidel and von Reden, 2002, that argues for the mutual compatibility of broad and detailed studies of the ancient Greek and Roman economies.

Finley, M.I. The World of Odysseus, revised edition. Harmondsworth: Penguin, 1965.

A brief and highly readable survey of the early Archaic period.

Fisher, N.R.E. Slavery in Classical Greece. London: Bristol Classical Press, 1993.

A brief survey.

Garlan, Y. Slavery in Ancient Greece, revised edition. Ithaca: Cornell University Press, 1988.

The standard survey of slavery in ancient Greece.

Garnsey, P. Famine and Food Supply in the Greco-Roman World. Cambridge: Cambridge University Press, 1988.

Examines private and public strategies to ensure food supplies.

Isager, S. and J.E. Skydsgaard. Ancient Greek Agriculture: An Introduction. London: Routledge, 1992.

Kim, H.S. “Archaic Coinage as Evidence for the Use of Money.” In Money and Its Uses in the Ancient Greek World, edited by A. Meadows and K. Shipton, 7-21. Oxford: Oxford University Press, 2001.

Argues that the existence of large quantities of small-denomination coins from the earliest of coinage in ancient Greece is evidence of the economic use of coinage.

Kraay, C.M. Archaic and Classical Greek Coins. Berkeley: University of California Press, 1976.

Long the standard survey of ancient Greek coinage.

Kurke, L. The Traffic in Praise: Pindar and the Poetics of Social Economy. Ithaca: Cornell University Press, 1991.

Takes the new cultural history approach to analyzing the poetry of Pindar and how it represents money within the social and political value system of ancient Greece.

Kurke, L. Coins, Bodies, Games, and Gold: The Politics of Meaning in Archaic Greece, 1999. Princeton: Princeton University Press.

Millett, P. Lending and Borrowing in Ancient Athens. Cambridge: Cambridge University Press, 1991.

Reinforces the Finley model by arguing that lending and borrowing was primarily for consumptive purposes and embedded among traditional communal values in Athens.

Osborne, R. Classical Landscape with Figures: The Ancient Greek City and Its Countryside. London: George Philip, 1987.

Explores rural production and exchange within political and religious contexts.

Sallares, R. The Ecology of the Ancient Greek World. London: Duckworth, 1991.

Interdisciplinary analysis of a massive amount of information on a wide variety of aspects of the ecology of ancient Greece.

Schaps, David M. The Invention of Coinage and the Monetization of Ancient Greece. Ann Arbor: University of Michigan Press, 2004.

Shipton, K. “Money and the Elite in Classical Athens.” In Money and Its Uses in the Ancient Greek World, edited by A. Meadows and K. Shipton, 129-44. Oxford: Oxford University Press, 2001.

Argues that the elite of Athens preferred leasing high-profit silver mines to public land.

Tandy, D. Warriors into Traders: The Power of the Market in Early Greece. Berkeley: University of California Press, 1997.

Traces developments in the economy of the Archaic period and argues that they had an important impact in the formation of the basic social and political institutions of the polis.

Von Reden, S. Exchange in Ancient Greece. London: Duckworth. 1995.

Employs the methods of new cultural history to argue that exchange in ancient Greece was thoroughly embedded in non-economic social, religious, and political institutions and practices.

Von Reden, S. “Money, Law, and Exchange: Coinage in the Greek Polis.” Journal of Hellenic Studies 107 (1997): 154-176.

A cultural historical study of the representational uses of coinage in the social, political, and economic life of ancient Greece at the advent of the use of coinage.

White, K.D. Greek and Roman Technology. London: Thames and Hudson, 1984.

1 Portions of this article have or will appear in other forms in Engen, 1996, Engen, 2001, Engen, Forthcoming(a), and Engen, Forthcoming(b).

2 This article will not discuss the preceding Mycenaean period (c. 1700-1100 B.C.) and “Dark Age” (c. 1100-776 B.C.E.). During the Mycenaean period, the ancient Greeks had primarily a Near Eastern style palace-controlled, redistributive economy, but this crumbled on account of violent disruptions and population movements, leaving Greece largely in the “dark” and the economy depressed for most of the next 300 years.

Citation: Engen, Darel. “The Economy of Ancient Greece”. EH.Net Encyclopedia, edited by Robert Whaples. July 31, 2004. URL http://eh.net/encyclopedia/the-economy-of-ancient-greece/

Agricultural Tenures and Tithes

David R. Stead, University of York

The Tenurial Ladder

Agricultural land tenures, the arrangements under which farmers occupied farmland, continue to be the subject of extensive study by agricultural historians and economists. They have identified a “ladder” of tenures broadly classified by the degree of independence each type offered the farmer. Some of the key features of the main forms of tenurial agreements are briefly described below. In practice, though, the characteristics of these different tenures shaded into one another and they often had their own particular local features, ensuring that the distinctions among them were frequently blurred.

At the top of the tenurial ladder was owner occupation, where the farmer owned and farmed his property as a peasant proprietor or capitalist producer. All other types of tenure involved a separation between the ownership and the use of land. On the next rung were hereditary tenures, which gave the occupant quasi-ownership of the farm. The hereditary tenant had a lifelong right to cultivate the holding, and was allowed to bequeath it to his direct heirs. However, his freedom of action was subject to various restrictions imposed by the superior landowner, whose permission may have been needed to adopt a new course of husbandry, for example, and who might have levied a payment when the farm changed hands. Under some circumstances the landlord could also possess the right to evict the hereditary tenant, for instance if the property was not kept in a good state of maintenance.

After owner occupation and hereditary tenures was leasehold, where the tenant occupied under a lease either lasting until a number of persons named in the contract had died, or for some certain term of years (for example, “tacks” for nineteen years were prevalent in Scotland around the turn of the nineteenth century). In the former case the names stated were often those of the farmer, his wife and son, and thus this kind of lease approached hereditary tenure. The typical leaseholder for years was charged a fixed cash rent per annum which was equal or close to the yearly economic value of the land (a rack rent). In contrast, the typical leaseholder for lives paid a small annual rent that was well below the rack rent, together with a much larger “fine” levied when the landlord granted a new lease or when the sitting tenant wished to add another name to the contract after an existing life had ended.

On a lower rung of the tenurial ladder was sharecropping (the modern preference is for “cropsharing”). Here, the landlord took the rent in kind, instead of in cash, as some share of the farm’s annual produce (predominately one half). The sharecropping landlord tended to be closely involved in the management of farming operations, and met part of the production costs. Tenancy-at-will was the next broad category of tenure. The farmer did not have a written lease but instead held from year to year at the will of the landowner, who in theory could evict the occupant at short notice for no reason. In practice, however, many landlords tended to leave tenants-at-will undisturbed so long as their husbandry was satisfactory. Changing tenants was costly for the landowner if only because the incumbent occupier possessed specialist knowledge of the idiosyncrasies of the farm’s soil, which would take a newcomer time to learn.

Serfdom and slavery were on the lowest rungs of the tenurial ladder because under these tenures the farmer was compelled to till the soil and often received little of the returns from his labors. In the feudal system in medieval Europe, even servile peasants were not the property of their manorial lord (unlike slaves), but they were – to varying degrees – bound to the land because they usually could not move (or marry) without their lord’s permission. Feudal tenants were generally required to pay some form of rent and also render personal labor services to their lord, most commonly working on his land a few days a week. Over time, these labor services were gradually commuted to a money payment. Finally, it is probably not unreasonable to include most communal forms of land tenure near the bottom of the tenurial ladder. Where land was owned or used by multiple persons, as on the village common and under Soviet collectivization, the communal nature of decision-making must have curbed the freedom of action of the enterprising farmer.

Tenurial Choice

It is possible to identify, as a very rough worldwide generalization, at least three main changes over the centuries in the types of tenure employed. First, with the gradual decline or abolition of communism, feudalism and slavery, there has been a shift towards tenurial systems based on market relations rather than collectivism or coercion. The second change has been the progressive substitution of leases for lives with leases for years, and the third has been a move towards owner occupation and fixed rent leasing at the expense of sharecropping. These shifts have occurred at different rates in different regions, and the progression has not always been linear, but sometimes characterized by reversals. This has produced enormous variation in the popularity of the various tenures. For example, in the eighteenth century sharecropping was common throughout much of the European Continent but was almost unknown in England and Ireland. Indeed, it was not uncommon for multiple forms of tenure to co-exist in the same village at the same time. After the emancipation of slaves in the American South, for instance, a diverse mix of tenures was employed: the traditional assertion that sharecropping replaced slavery in the postbellum countryside is an oversimplification.

Of the tenures listed above, it is the choice of sharecropping that has most fascinated agricultural economists. Its popularity appeared puzzling after many eighteenth and nineteenth century writers argued that this arrangement acted as a check on agrarian improvement because the farmer did not receive the full amount of any increase in farm output. More recently, however, the benefits of share tenancy have been recognised. For example, by dividing the crop, the sharecropping landlord shared the risks of a bad harvest with the tenant, thereby providing partial insurance to farmers who disliked being exposed to risk whilst still preserving some incentive for the occupier to undertake improvements. (By contrast, the fixed rent tenant contracted to pay the same amount irrespective of whether the harvest was profitable or poor.) Another sharecropping puzzle was why the output split was predominately 50/50 – indeed the French and Italian words for share tenancy, metayage and mezzadria respectively, mean splitting in half – when it might be expected that the landlord’s cut would have varied far more from farm to farm. This “easy” and “fair” fraction appears to have been a natural focal point that landlords and tenants were drawn to, thereby avoiding potentially protracted haggling that might have scarred their subsequent relationship.

Tenurial choice over the past century or so can be described using the (albeit imperfect) available body of statistics. Table 1 provides benchmarks of the percentage of agricultural land leased by farmers in several western European countries since the late nineteenth century (land not leased was owner occupied). Almost all farmland in England and Wales and Ireland at the beginning of the period covered by the table was owned by large landowners who divided their estates into farm-sized pieces which were rented out. The farm tenancy sectors of the three Continental countries in 1880 were noticeably smaller. One common factor among the various possible explanations for this was the 1804 Napoleonic Code, introduced in France and the then French empire which included Belgium and the Netherlands. The Code created inheritance laws that split the deceased’s landholdings equally among all heirs rather than, as elsewhere, the eldest son inheriting the whole property. This legal pressure for the fragmentation of landownership helped to produce a sizeable class of small owner occupying farmers on the Continent.

Table 1

Share of Land Leased by Tenant Farmers
in Selected Western European Countries, 1880-1997
(% of total agricultural land)

Belgium England & Wales France Ireland Netherlands
1880 64 85a 40 96b 40
1910 72 89 n/a 42 53
1930 62 63 40 6 49
1950 67 62 44 5 56
1980 71 47 51 8 41
1997 68 33 58 13 34

Source: Swinnen (2002), table 2.
Notes: a figure for 1885; b figure for 1870. Land not leased was owner occupied.

The most striking change since the late nineteenth century has been the rapid shrinkage of the English and Welsh, and especially Irish, tenancy sectors by 1930. In England and Wales, higher taxation (including increased death duties) combined with the legacy of an agricultural depression and the deaths of many landlords or their heirs in World War One to produce a situation where numerous owners were forced to sell to tenant farmers who had profited during the wartime agricultural boom. The even more dramatic decline of tenancy in Ireland was chiefly due to a series of state legislation beginning in 1870 that provided subsidized government loans – made on increasingly favorable terms – to help tenants purchase their holdings: the 1923 Land Act made such sales compulsory. Since the Second World War, most of the countries covered by Table 1 have enacted legal changes increasing rent controls and especially the security of leases. These restrictions have made tenancy more attractive for tenants but more importantly less so for landowners, which helps explain the post-war shrinkage of the tenancy sectors in England and Wales and the Netherlands. By contrast, in France the proportion of land leased has risen in recent years partly in response to government policies encouraging leasing, such as lower taxes on land rents.

The general prevalence of owner occupation in the second half of the twentieth century suggested by Table 1 is supported by Figure 1, which gives a snapshot of the global situation in 1970 using data from the world census of agriculture. The first of each pair of columns shows the percentage of all farmland in each region held under owner occupation. Usually the majority of land was cultivated by its owner, although in Africa communal tenures were more widespread. The second of each pair of columns shows the proportion of land in just the tenancy sector of each region that was let under a sharecropping contract. Despite its traditional association with poverty, sharecropping remains persistently popular even in modern advanced farming sectors, notably in North America where nearly a third of tenanted land in 1970 was occupied by sharecroppers.

Figure 1
Percentage of Total Farmland Held under Owner Cultivation, and the Percentage of Tenanted Land Held under Sharecropping, Various Regions, 1970

Source: Otsuka et al. (1992), table 1

The Historical Role of the Lease

A number of contemporaries and historians have suggested that the lease played an important role in influencing farming practices. Short leases, especially tenancies at will, were loudly criticized by the eighteenth-century English writers Arthur Young and William Marshall on the grounds that these contracts did not provide the tenant with sufficient security to make long-term investments to the farm, such as draining the land. If the benefits from these types of expenditures were not fully realized until after the original lease expired, then there was a danger that the tenant would lose part of his investment returns if the landlord acted opportunistically by evicting him, or by renewing his lease but at a higher rent. Tenants may therefore have been wary of making large expenditures for fear of the later consequences, inhibiting agricultural improvement. How serious a problem the potential insecurity of short leases was in practice is a moot point. Landlords not lessees undertook much of the long-term investments, and for those expenditures that were made by tenants, legal or customary rights existing outside the tenancy agreement might have provided at least some security. Outgoing farmers, for instance, could be due compensation for their “unexhausted improvements,” as under Ulster (Ireland) and English tenant right, and some landlords might have been able to establish a reputation for not unfairly treating their tenantry. Furthermore, when the economic conditions faced by farmers were depressed or uncertain, many tenants actually preferred a short lease because this ensured that they were not tied to the holding if it turned out to be unprofitable.

Leases could have promoted innovative, or at least best practice, farming if the landowner had used these documents to insist on the tenantry adopting certain types of crops and crop rotations. Evidence from England during the long eighteenth century, however, indicates that the husbandry clauses written into leases were primarily designed to restrict tenants from engaging in a course of farming that would be deleterious to long-term soil fertility, rather than stipulating that the latest agricultural methods be employed. Thus instead of demanding that (say) turnips be cultivated, popular covenants in English leases included those prohibiting the growing of more than two successive cereal crops on the same field or the plowing of pasture land without the landowner’s prior written consent.

Tithes

Landlords and tenants were not the only parties with a close interest in the produce of the soil. Farmers frequently had to pay tithe, a tax payable for the support of the church. Probably originating as a voluntary payment in early Christian communities, tithes became a legally enforced obligation in many countries – particularly in western Europe – during the Middle Ages. The tithe was supposedly levied at one tenth of the gross value of the farm’s annual produce and was traditionally paid in kind, whereby the clergyman would claim every tenth sheaf of corn (etc.). In practice, a complex combination of case law and custom exempted various types of land and products. Moreover, frequently the tithe owner was not actually a member of the clergy, often because a layperson had purchased church-owned land that had tithing rights attached to it. Many contemporary agricultural writers, not without some justification, criticized tithes in kind on the grounds that they acted as a disincentive to agrarian improvement because, as with a sharecropping agreement, the farmer did not receive the full amount of any rise in farm output. Payment of tithes in kind also offered substantial scope for friction between tithe payers and collectors, for example over whether new crops, such as potatoes, were titheable. To thwart those farmers who sought to under-report their produce, or give poor quality products as tithe (one milkmaid urinated in the tithe milk), the tithing man typically collected his due from the fields rather than allowing the payer to deliver it to the tithe barn.

On account of these disputes and inconveniences, tithes in kind were often commuted to a fixed or variable annual cash payment. Alternatively an allotment of land or a lump sum might be given in return for the church extinguishing tithes. Many of these substitutions were achieved under government legislation, such as the 1836 and 1936 Tithe Acts in England. Yet cash payment was far from being free from conflict arising, for instance, when the church attempted to annul a fixed money charge that, owing to inflation, had fallen to a trifling amount. The underlying friction peaked in so-called tithe wars, which were characterized by demonstrations by payers and varying degrees of violent clashes with collectors; examples include Ireland in the 1830s and England and Wales in the 1930s. In short, the multiplicity of tithing customs and seemingly endless disputes over payment suggest that some tithe owners at some times got closer to obtaining their tenth than others.

Bibliography

Alston, Lee J. and Robert Higgs. “Contractual Mix in Southern Agriculture since the Civil War: Facts, Hypotheses, and Tests.” Journal of Economic History 42 (1982): 327-53.

Blum, Jerome. The End of the Old Order in Rural Europe. Princeton: Princeton University Press, 1978.

Brinkman, Carl, Heinrich Cunow, Fritz Heichelheim, Robert H. Lowie, George McCutchen McBride, David Mitrany, Radha Kamal Mukerjee, Peter Struve and Yosaburo Takekoshi. “Land Tenure.” In The Encyclopaedia of the Social Sciences, Volume 9, 73-127. London: Macmillan, 1933.

Cameron, Rondo and Larry Neal. A Concise Economic History of the World: From Paleolithic Times to the Present. Oxford: Oxford University Press, fourth edition, 2003.

Carmona, Juan and James Simpson. “The ‘Rabassa Morta’ in Catalan Viticulture: The Rise and Decline of a Long-Term Sharecropping Contract, 1670s-1920s.” Journal of Economic History 59 (1999): 290-315.

Evans, Eric J. The Contentious Tithe: The Tithe Problem and English Agriculture, 1750-1850. London: Routledge and Kegan Paul, 1976.

Harvey, Barbara. “The Leasing of the Abbot of Westminster’s Demesnes in the Later Middle Ages.” Economic History Review 22 (1969): 17-27.

Le Roy Ladurie, Emmanuel and Joseph Goy. Tithe and Agrarian History from the Fourteenth to the Nineteenth Centuries. Cambridge: Cambridge University Press, 1982.

O Grada, Cormac. Ireland: A New Economic History, 1780-1939. Oxford: Oxford University Press, 1994.

Otsuka, Keijiro, Hiroyuki Chuma and Yujiro Hayami. “Land and Labor Contracts in Agrarian Economies: Theories and Facts.” Journal of Economic Literature 30 (1992): 1965-2018.

Overton, Mark. Agricultural Revolution in England: The Transformation of the Agrarian Economy, 1500-1850. Cambridge: Cambridge University Press, 1996.

Stead, David R. “Crops and Contracts: Land Tenure in England, c. 1700-1850.” D.Phil. thesis, University of Oxford, 2002.

Swinnen, Johan F. M. “Political Reforms, Rural Crises and Land Tenure in Western Europe.” Food Policy 27 (2002): 371-94.

Wade Martins, Susanna and Tom Williamson. “The Development of the Lease and Its Role in Agricultural Improvement in East Anglia, 1660-1870.” Agricultural History Review 46 (1998): 127-41.

Whyte, Ian D. “Written Leases and Their Impact on Scottish Agriculture in the Seventeenth Century.” Agricultural History Review 27 (1979): 1-9.

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Citation: Stead, David. “Agricultural Tenures and Tithes”. EH.Net Encyclopedia, edited by Robert Whaples. January 25, 2004. URL http://eh.net/encyclopedia/agricultural-tenures-and-tithes/

The Institutional Framework of Russian Serfdom

Author(s):Dennison, Tracy
Reviewer(s):Nafziger, Steven

Published by EH.Net (July 2013)
?
Tracy Dennison, The Institutional Framework of Russian Serfdom. Cambridge: Cambridge University Press, 2011. xx + 254 pp. $99 (hardcover), ISBN: 978-0-521-19448-8.

Reviewed for EH.Net by Steven Nafziger, Department of Economics, Williams College.

In late 2011, this reviewer completed an early analysis of Dennison?s important monograph on serfdom on one relatively large estate in a north-central province of European Russia (Nafziger 2012). Since then, roughly a dozen reviews of this book have been published in English in various historical journals by a number of prominent scholars of Russian history. Overall, these scholars applaud Dennison?s skilled employment of myriad archival sources to describe how the estate of Voshchazhnikovo functioned, and they are mostly sympathetic with her argument that the variation in serfdom was largely the result of the heterogeneity in the institutions set up by estate owners. The Sheremetev family, who owned more serfs than any other noble family in Russia, controlled Voshchazhnikovo and relied on a particular set of administrative practices, property rights, judicial structures, and customary norms to extract rents while allowing considerably economic flexibility to engage in markets among their peasants. Dennison explores this setting in a series of thematic chapters that investigate the interaction between institutional structures (as fostered by the Sheremetevs) and peasant demographic and economic actions from 1750 until emancipation in 1861. After considering the book for a second time, my admiration has only grown for the detailed empirical work Dennison has done in depicting the operations of this particular estate to show how these structures influenced individual, household, and communal decision-making among the serfs.??

What other reviewers have found problematic in Dennison?s study concerns the broader framework and conclusions laid out in the first two and the last chapters. Section 1.1, entitled ?The Peasant Myth? (pp. 6-17), asserts that scholars of the Imperial Russian peasantry have frequently misunderstood their subject matter and overemphasized the persistence of a distinct moral economy among serfs (and the Russian peasantry more broadly) that was grounded in cultural and geographic factors. In critiquing Dennison?s study, the influential historian Steven Hoch (2012) appears guilty of fostering this very myth by claiming that because the serfs of Voshchazhnikovo were evidently involved in a variety of factor and goods markets, they were not really peasants at all, since, according to his interpretation, the peasant economy was antithetical to market relations. As pointed out by David Moon (2013) in another review of Dennison?s book, Hoch?s work considered a labor-service serf estate in an agricultural region to the south of Russia, and so it is perhaps not surprising that the structures created by the serf owners (the Gagarin family in his case) were more coercive and less conducive to peasant involvement in local markets. This is something Dennison is well aware of in emphasizing the heterogeneity of serfdom, but neither her work, nor that of Hoch, nor anyone else?s research for that matter, gives us a good sense of the overall distribution of serf estates along the relevant dimensions of institutional constraints, demographic practices, or market involvement. Just what ?serfdom? was for the modal estate, or for estates in very different geographic and economic circumstances than the ones studied by Dennison, Hoch, and the small number of other practitioners of the case study (who tend to focus on similar sets of archival records for estates in similar locations), demands further research.

This reviewer is mostly comfortable with the use of the ?peasant myth? as a focal point for Dennison?s analysis, especially given the persistence of that viewpoint in the work of Hoch and others. Dennison puts forth Alexander Chaianov (1986) as one of the main perpetuators of the Russian peasant myth, because he assumed away several dimensions of market involvement and utility maximization in proposing the existence of a unique peasant economy. Chaianovian ideas were adopted by scholars such as Theodore Shanin (1972) and James C. Scott (1976), who, in turn, influenced the work of historians such as Hoch. However, development economists have incorporated behavioral richness, various forms of market imperfections, and institutional constraints into the basic agricultural household model (which owes a lot to Chaianov?s initial insights about the relationships between consumption and production decisions of rural households) to show that standard tools of utility and profit maximization do go most of the way towards explaining the economic decisions made by peasants in developing economies. Much of Dennison?s success in this historical work is to incorporate insights from these and other modern social science ?models? to interpret her empirical findings in illuminating ways.?

Other reviewers (particularly Melton 2012; and Wirtschafter 2012) have emphasized one aspect of Dennison?s use of the ?peasant myth? as a foil that is perhaps more problematic for her study?s broader message. They note that late Imperial and Soviet scholarship on serfdom, while ideologically blinkered and limited in their own ways, was not wedded to the peasant myth, but instead emphasized and empirically documented considerable market involvement by serfs, especially in the region where Voshchazhnikovo was located. As such, they view the myth that Dennison focuses on to be something of a straw man. Dennison does cite these earlier studies of serfdom, but she does not really draw on the archival and quantitative evidence they present to make her argument. A more complete analysis of serfdom as a varied set of institutional conditions that affected market development and peasant economic behavior would benefit from further consideration of these and other available facts to really get at the different ?distributions? of the serf experience, as noted above.?

These few caveats should not detract from what is truly a paradigmatic new work on the economic history of Tsarist Russia. The boom in empirical research on the economic histories of societies that fell behind during the Great Divergence has mostly left Tsarist Russia behind. This reviewer modestly hopes that his comments and the reviews of others might help spur not only further work on serfdom and related topics by Dennison, but additional scholarship by others on the full set of institutional factors that underlay Russia?s development experience prior to 1917.?

References:

Alexander Chaianov. The Theory of the Peasant Economy. Ed. by David Thorner, Basile Kerblay, and R.E.F. Smith. Madison, WI: University of Wisconsin Press, 1986.

Steven Hoch. ?Review of Tracy Dennison?s The Institutional Framework of Russian Serfdom.? American Historical Review 117, no. 3 (2012): 966-967.

Edgar Melton. ?Review of Tracy Dennison?s The Institutional Framework of Russian Serfdom.? Journal of Interdisciplinary History 43, no. 1 (2012): 109-111.

David Moon. ?Review of Tracy Dennison?s The Institutional Framework of Russian Serfdom.? Slavonic and East European Review 91, no. 2 (2013): 367-369.

Steven Nafziger. ?Review of Tracy Dennison?s The Institutional Framework of Russian Serfdom.? Economic History Review 65, no. 4 (2012): 1597-1598.

James C. Scott. The Moral Economy of the Peasant: Rebellion and Subsistence in Southeast Asia. New Haven, CT: Yale University Press, 1976.

Teodor Shanin. ?The Nature and Logic of the Peasant Economy.? Journal of Peasant Studies 1 (1973): 63-80.

Elise Wirtschafter. ?Review of Tracy Dennison?s The Institutional Framework of Russian Serfdom.? Slavic Review 71, no. 3 (2012): 693-694.

Steven Nafziger is an Associate Professor of Economics at Williams College. He is currently embarking on a book-length study of the development consequences of Russian serf emancipation.

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (July 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Servitude and Slavery
Geographic Area(s):Europe
Time Period(s):18th Century
19th Century

So Great a Proffit: How the East Indies Trade Transformed Anglo-American Capitalism

Author(s):Fichter, James R.
Reviewer(s):Cox, Thomas H.

Published by EH.Net (January 2012)

James R. Fichter, So Great a Proffit: How the East Indies Trade Transformed Anglo-American Capitalism. Cambridge: Harvard University Press, 2010. xi + 384 pp. $35 (hardcover), ISBN: 978-0-674-05057-0.

Reviewed for EH.Net by Thomas H. Cox, Department of History, Sam Houston State University.

James R. Fichter?s So Great a Proffit: How the East Indies Trade Transformed Anglo-American Capitalism sheds new light on America?s early trade with Asia during the late 1700s and early 1800s. Seeking to move beyond traditional portrayals of national economic development, Fichter contends that ?American trade to the East Indies as a whole had repercussions for society, economics, and politics on both sides of the Atlantic? (p. 4). In particular, competition from private American merchants undermined British mercantilism and ?helped begin Britain?s nineteenth century free trade empire.? For the young American republic trade with Asia meant ?the accumulation of wealth and financial capital into the hands of the wealthiest Americans, creating financiers who would profoundly alter the shape of American business? (p. 4). Located at the intersection of economic, cultural, American, and British history, Fichter?s work is necessarily broad based, painting in broad strokes themes for future historians to further flesh out.

The publication of So Great a Proffit coincides with an emerging body of scholarship on the ?Pacific World.?? In recent years Katherine Gulliver and Matt K. Matsuda have pointed to the increase of cultural contacts between European and American traders and the native peoples of the Pacific Rim from the late 1700s through the mid-twentieth century as a formative period in world history. Such activity led to not merely exchanges of plants, animals, pathogens, and people but also linguistic, religious and cultural traits. Although slower to catch on than the concept of the ?Atlantic World,? the increasingly important relationships between the United States and Asian countries such as China has promoted new scholarly interest in the notion of a ?Pacific World.?

Fichter begins his narrative in colonial British North America. Drawing from Bernard Bailyn and Pauline Maier, Fichter discusses the role of anti-monopoly sentiment in the creation of republican rhetoric. In the post-Revolutionary period lingering distrust of large mercantile corporations prevented the creation of an American East India Company. It thus fell to individual American merchants, already excluded from British markets in the wake of independence, to form primitive business corporations and seek new business opportunities in the Pacific.

Following the outbreak of war between Britain and France in the 1790s, neutral American merchants conducted a bustling trade throughout the world. Over the next decade American ships carried Spanish silver, American furs, and Hawaiian sandalwood to the Far East, returning home with holds full of Sumatran pepper, Indian cloth, and Chinese tea and porcelain. Many of these goods were subsequently smuggled into European countries (including, ironically Great Britain) to be sold at exorbitant rates.

Fichter reveals that profits garnered from the lucrative Pacific trade helped to create the first class of American millionaires. Traditional American merchants pursued trade to achieve a ?competency? or ?enough money not to need to work, enough to retire on, but not enough to be rich.? In contrast, younger merchants like Jacob Crowninshield, Stephen Girard, and Israel Thorndike pursued trade with Asia to achieve ?affluence? characterized by ?profuse wealth and a liberality towards others commensurate with noble station? (pp. 117-18). By decorating their spacious mansions with Chinese tapestries, silks and lacquer ware these individuals showcased their refinement and gentility. By injecting large amounts of silver into the economy American merchants furthermore helped underwrite the costs of northern industrialization. T.H. Breen, Richard Bushman, and Daniel Vickers have traced the gentrification of America?s merchant community in the early 1800s. Fichter adds to their work by uncovering the previously unexamined role which trade with the Pacific Rim played in this process. Conversely, Fichter also relates how the British East India Company selectively attempted to lease its ships and privatize key aspects of its overseas operations to stave off competition from American free traders until its final demise in 1874. Crucial in the defeat of the unpopular monopoly were the lobbying efforts of British free traders who argued that it was their rights as British subjects to carry out trade anywhere within the Empire they chose. Ironically it was rise of private business partnerships which allowed Great Britain to remain a dominant economic power well into the twentieth century.

Fichter wastes no opportunity to depict American free trade as more effective than British mercantilism. Yet How Great a Proffit does not blindly celebrate the ?virtues? of capitalism. Fichter candidly admits that ?[f]ree trade was, despite Adam Smith?s sentiments, amoral? (p. 205). As late entrants into the Pacific trade and lacking notions of noblesse oblige shared by many royal and East Indian Company officials, American traders brutally overharvested seal skins and sandalwood and intervened in tribal wars throughout the Pacific to secure lucrative trading agreements with different chieftains. Most damning, Fichter recounts the vast fortunes British and American merchants made off the suffering of thousands of Chinese during the Opium Wars.

Despite the breath of Fichter?s research, many questions about America?s early trading relations with Asia remain unanswered. How, specifically, did trade with India and China influence the development of the modern American business corporation and how substantial was this impact? How did the lives of American sailors, dockworkers, clerks, and ordinary consumers change as a result of increased trade with Asia? Most important, what actions did Pacific Islanders, Native Americans, and Chinese peasants take to resist economic domination by British and American merchants? Further research is thus needed before the complex webs of commerce and culture identified by Fichter can be brought into clear historical focus. Nevertheless, How Great a Proffit remains a well written, carefully researched book which points the way for scholars interested in recapturing America?s early trading relationships with the diverse cultures of the Pacific World.

Thomas H. Cox is Associate Professor of History at Sam Houston State University. He is the author of Gibbons v. Ogden: Law and Society in the Early Republic (Ohio University Press, 2009). In 2009-2010 he served as Visiting Fulbright Professor at the Institute for American Studies, Northwest Normal University, Changchun, China.

Copyright (c) 2012 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (January 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):International and Domestic Trade and Relations
Geographic Area(s):Asia
Australia/New Zealand, incl. Pacific Islands
Europe
North America
Time Period(s):18th Century
19th Century

Economic Thought in Early Modern Japan

Author(s):Gramlich-Oka, Bettina
Smits, Gregory
Reviewer(s):Hellyer, Robert

Published by EH.NET (November 2011)

Bettina Gramlich-Oka and Gregory Smits, editors, Economic Thought in Early Modern Japan. Boston: Brill, 2010. xxii + 298 pp. $154 (hardcover), ISBN: 978-90-04-18383-4.

Reviewed for EH.Net by Robert Hellyer, Department of History, Wake Forest University.

While recent scholarship has shed new light on many facets of early modern Japan, less has been written about economic issues, making this a welcome volume.? Emerging from international conferences held in Germany and the United States, this book is the first installment in a Brill series, ?Monies, Markets and Finance in East Asia, 1600-1900.?? At the broadest level, Gramlich-Oka and Smits seek to ?deepen and revise our understanding of early modern Japan,? and also ?enlarge and refine the analytical vocabulary for describing early modern economic thought and policy? (back cover) — goals they have certainly achieved.

In the introduction, Smits and Mark Metzler note perceptions of early modern Japan, still found in some survey histories, that the volume seeks to contest: a Confucian disdain for commerce that stifled economic growth, commercial and intellectual networks defined primarily by a rigid Confucian-style class structure (samurai-agriculturalist-artisan-merchant), and a politico-economic order of ?collective feudalism? (the bakuhan system).? Following recent studies (such as Ravina 1999 and Howell 2005), this volume successfully challenges those perceptions and adds much to our knowledge of early modern Japan by presenting fresh insights on economic theories, commercial ideologies, as well as case studies of individual merchants and intellectuals, domains, and the Ryukyu Kingdom (present-day Okinawa prefecture).

In the first chapter, Ethan Segal offers useful avenues to consider the economic transition from medieval to early modern, highlighting the monetization that began in the thirteenth century and despite the political dislocation of the Warring States period (1467-1573), continued into the seventeenth century. Kawaguchi Hiroshi?s subsequent chapter, ?Economic Thought Concerning Freedom and Control,? is less engaging but does offer some intriguing conclusions, such as the fact that during the Edo period (1603-1868), the word jiy?, which commonly connotes ?freedom? in modern Japanese, ?indicated a state without stagnation, not autonomous agency implied by the modern sense of ?freedom?? (p. 50).? Smits? examination of the Ryukyuan official, Sai On, presents a portrait of a Confucian-educated leader trying to develop state infrastructure, such as a network of harbors, and pushing to ?tweak laws and regulations so that individual profit-seeking ended up contributing to the common good? (p. 88). Ochiai K? describes the development of a domestic sugar industry in the eighteenth and early nineteenth centuries, stressing how Tokugawa leaders encouraged production to reduce the outflow of bullion used to obtain brown, white, and rock candy sugar from Dutch and Chinese merchants.? Nonetheless the leaders of the shogunate also feared that as farmers cultivated sugar and other valuable cash crops, they would neglect essential grains, most notably rice, central to the feudal tax structure.? In her chapter, Gramlich-Oka delivers an informative and valuable discussion of Kud? Heisuke, a physician from a domain in northern Honshu, who operating in late eighteenth-century social networks of high-ranking officials, daimyo (lords), doctors, and scholars, offered informed critiques and policy proposals concerning foreign trade and colonization of Ezo (present-day Hokkaido). Jan S?kora also focuses on the role of non-governmental actors and social networks with an examination of Sh?ji K?ki, a merchant and self-made intellectual, whom S?kora asserts ?played a part in preparing the intellectual background for the profound economic and political changes? that unfolded in the Saga domain (today?s Saga prefecture on the island of Kyushu) in the mid nineteenth century (p. 176).? In the subsequent two chapters, Mark Ravina presents a fascinating look at the community granary (shas?) as a legitimized lending and credit agency within the Confucian inspired, state-sponsored orthodoxy; Ishii Sumiyo details the life of It? Y?z?, an entrepreneur who more than adeptly navigated the political and social upheavals that marked the transition from Tokugawa to Meiji in the late nineteenth century.? While maintaining his family business, It? not only founded a silk promotion institute, a railway company, and a commercial bank but also found time to establish two schools and to run for the Diet. In the concluding chapter, Metzler slices the Edo period into novel units defined by ebbs and flows in land and non-land tax revenues, monetary expansion and restraint, domestic exchange rates as well as price movements.? His use of modern terminology and points of analysis, such as the notion of ?big government? and comparisons to the Japanese experience in the twentieth century, are fruitful and provocative.?

All told, this volume provides many valuable takeaways including: an increased understanding of the complex and varied networks of people, ideas and, of course, goods, that defined early modern Japan; the energy with which state and non-state actors brought to formulating and implementing pragmatic solutions to pressing economic problems; and perhaps most of all, the broad influence of economic thought centered on the ?benefit of the country/national interest? (kokueki), a term used, apparently quite frequently, by intellectuals and domain and shogunal officials alike.? Nonetheless this reader was concerned that at times, the volume presents too rosy of a picture of samurai-commoner relations in the early modern Japanese polity.? To this point, I was reminded of another eighteenth-century physician/economic theorist not noted in the book: And? Sh?eki, who bitterly criticized the warrior class as socially useless consumers, benefiting from an economy that exploited peasants (Norman 1949).

This caution aside, in multiple ways this book enhances our understanding of the early modern Japanese economy and should be read by both scholars and students of Japanese history.? As the editors aim, it will also interest scholars of economic thought outside of Japan and East Asia (although the decision, in some chapters, to provide the translation for every Japanese term may distract the non-specialist reader). One also hopes that a more affordable paperback edition will be published to allow it to be assigned in undergraduate courses on early modern Japan.???????

References:

David L. Howell (2005). Geographies of Identity in Nineteenth-Century Japan. Berkeley: University of California Press.

E. Herbert Norman (1949). ?And? Sh?eki and the Anatomy of Japanese Feudalism,? Transactions of the Asiatic Society of Japan, Third Series, Vol. 2 (December 1949): 1-340.

Mark Ravina (1999). Land and Lordship in Early Modern Japan. Stanford: Stanford University Press.

Robert Hellyer is Associate Professor of History at Wake Forest University.? His recent publications include Defining Engagement: Japan and Global Contexts, 1640-1868 (Harvard University Asia Center, 2009).? (hellyer@wfu.edu)

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (November 2011). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economywide Country Studies and Comparative History
History of Economic Thought; Methodology
Geographic Area(s):Asia
Time Period(s):16th Century
17th Century
18th Century
19th Century

Agriculture in World History

Author(s):Tauger, Mark B.
Reviewer(s):Grantham, George

Published by EH.NET (July 2011)

Mark B. Tauger, Agriculture in World History.? New York: Routledge, 2011. x + 192 pp. $30 (paperback), ISBN: 978-0-415-77387-4.

Reviewed for EH.Net by George Grantham, Department of Economics, McGill University (emeritus).

The revival of World History in the liberal arts curriculum has created a demand for serviceable textbooks to guide students (and their teachers) through an otherwise impenetrable thicket of names, places, events, and institutional detail.? Historians have responded to that challenge in two ways.? The first is to impose models (e.g., Marxian, Malthusian, property rights paradigm) as a means of unifying and coordinating the disparate material, an approach that in extreme cases borders on propaganda.? The other is to divide the history into ?themes? exhibiting enough internal coherence to be treated as historical objects in their own right.? As a history of agriculture from its origins in the tenth millennium BC to the present day, the present work exemplifies the second approach.? It is not, however, the history of agriculture an economist-historian would have written.? It has no tables of agricultural output, productivity, or population, does not evaluate the relative importance of efficiency, technological change, and markets in accounting for agricultural change in the long run, and says surprising little about the recent disappearance of farming as a way of life.? In short, the book is not about economic growth; it is about farmers in perpetual confrontation with the physical and the outside world.

The book covers the history of agriculture in all parts of the world where farming has occurred.? It provides thumbnail sketches of the agricultural histories of Europe, East, West, and South Asia, the Pacific Islands, Africa, and the Americas.? While a work of such geographical and temporal scope inevitably perpetuates errors of fact and interpretation, the ratio of misinformation to information is happily low.? The author has read widely and intelligently.? The chapter on agricultural developments since the end of the Second World War is particularly good. This vast material encompassed is organized under the rubric of what the author terms a ?dual subordination? to the natural world of flood, drought, weather, and pests, and to the upper classes and authorities that live off surpluses extracted from farmers as rent, taxes, monopoly, and forced labor.? In short, the book is a history of the distribution of agricultural income between its producers and those who live off the fruits of the producers? labor.?

In that history farmers repeatedly find themselves forced by environmental catastrophe, debt, taxation, and simple oppression into forms of dependence requiring them to render their produce to non-farmers.?? Its logic follows from the productivity of farming, which if not exhausted by population growth ? a possibility lightly passed over ? provides surpluses that supply economic support for states and elites.? Traditionally, the power to appropriate agricultural surplus ran through control of the land.?? In some civilizations ownership was vested in the state, which typically took its render in tax; but since large states could rarely effectively administer farming on such a vast scale, actual control typically devolved on officials and local elites, who exploited their delegated authority to undermine peasant property.? At times, this role was played by lenders.?

The history of land ownership is thus conceived as a dialectical process in which rising inequality provokes peasant revolt and government collapse leading to a fresh start that in time degrades to a new phase of inequality and rebellion as the original thrust of reforms exhausts itself in environmental insults and the restoration of the local elite.? In ancient civilizations founders of new dynasties usually intervened to protect peasants from the rapaciousness those elites.? Reforms often involved restoration of land to the peasantry and changing the land tax to make it more bearable and fair.? In the nineteenth and twentieth centuries, they also included tariff protection and agricultural subsidies.? Yet even in the most successful cases, farmers eventually found themselves once again under the thumb of outside predators, in particular oligopolistic agri-businesses and marketing organizations controlling farmers? access to urban and suburban markets for produce.? At the same time, the spread of monoculture based on heavy inputs of pesticides, fertilizer, energy, and antibiotics has not only led to the disappearance of family farms, but increased the vulnerability of surviving farms to environmental shocks.? From this perspective the lives of ordinary farmers, who a century ago constituted the majority of humanity, have been a continuous struggle to survive.

Populist history went out of fashion in the early 1960s, when the focus of economic historians shifted from the history of organizational forms and the distribution of economic opportunity and outcomes to the story of economic growth.? Both stories possess their particular teleology.? Populist history assumed a necessary movement towards social democracy through sustained confrontation between the forces of progress and the vested interests of reaction.? The history of economic growth has been organized around the concept of the production function: a bloodless history of inputs, innovation, and market integration, in which the distribution of the fruits of progress plays second fiddle to the upward march of average income.? Tauger?s book takes us part way back to that earlier tradition.? Removed from the political context that inspired it, that tradition raises the question whether the record supports a cyclical interpretation of the distribution of power and wealth, a wheel of fortune in which an initial phase of relative equality and fairness is succeeded in time by increasing inequality and oppression.? This seems to have been the pattern in early agrarian societies; does it operate in other types?? The question seems particularly relevant to world history, where the record invites one to compare and contrast.
???

George Grantham is Emeritus Professor of Economics at McGill University.? He is the author of numerous works on the history of French agriculture, and has been working for the past ten years on a history of the relation between agricultural productivity and agricultural markets in the pre-industrial era.? His most recent article is ?France,? in Harry Kitsikopoulos, editor, Agrarian Change and Crisis in Europe, 1200-1500, Routledge (forthcoming, 2011).

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (July 2011). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Agriculture, Natural Resources, and Extractive Industries
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Manors and Markets: Economy and Society in the Low Countries, 500-1600

Author(s):van Bavel, Bas
Reviewer(s):McCants, Anne E.C.

Published by EH.NET (June 2011)

Bas van Bavel, Manors and Markets: Economy and Society in the Low Countries, 500-1600.? New York: Oxford University Press, 2010.? xiv + 492 pp. $140 (hardcover), ISBN: 978-0-19-927866-4.

Reviewed for EH.Net by Anne E.C. McCants, Department of History, Massachusetts Institute of Technology.

The search for the medieval origins of European economic growth over the long run has become something of a growth industry in recent years.? For example, since 2008 the field of economic history has witnessed the publication of major book-length contributions from Jack Goldstone, Jan Luiten van Zanden, Paolo Palanima, and Timur Kuran, all of which argue strongly that there are readily identifiable causal linkages that extend in a meaningful way from at least the High Middle Ages (or even earlier) to present realities.[1]? For anyone familiar with an earlier instantiation of medieval economic history this trend may be unexpected.? It wasn?t long ago that the medieval economy was interesting only in so far as it was quaint (serfs and their lords eking out a living in the autarkic wilderness of the manorial economy); or worse, as it was brutal (the Middle Ages as the quintessential locus of the Four Horsemen of the Apocalypse: Conquest, War, Famine and Death).? Or if one?s tastes were not quite so dramatic there was always the longue duree of the Annales School, in which a relatively stable world of European peasants ran more or less seamlessly from late antiquity to the eighteenth century.? Admittedly, the greatest spokespersons of this view were Early Modernists, but the Medievalists were never far behind.? Indeed, it wasn?t always easy to tell them apart, given that they depicted a world of little change other than the cyclical fluctuations in the climate and the ebb and flow of population within its fairly narrow neo-Malthusian bounds.? None of this suggested the likely emergence of a historiography in which modern economic growth (of the kind defined by Simon Kuznets in the middle of the twentieth century and countless followers since) could be attributed back to conditions that prevailed in the years around or even before 1000.

This is not to say that the modern, industrial world as something sui generis has disappeared from recent scholarship; not at all.? Yet another group of important books of recent vintage seeking to explain the extraordinary economic achievement of Western Europe in the last two and a half centuries either passes over the question of medieval origins,[2] or in one prominent case counters it explicitly.[3]?? Jan de Vries finds his explanation for the modern transformation rooted in the new, consumerist, decision making strategies of households in the sixteenth and later centuries, while Deirdre McCloskey turns instead to the new ethical attachments, and the rhetoric by which they were expressed, of a commercial and middle class culture, more or less about the same time period.? Joel Mokyr turns his attention just a bit later to the eighteenth century proper when Enlightenment ideas loom large for both the development of new methods for organizing economic activities and in the tools and techniques employed in production, that is to say technological change in the broadest sense of that term.? For all of these arguments, newness is the important point; what may or may not have happened in the Middle Ages is hardly decisive.? In Greg Clark?s analysis, it is completely irrelevant.? Any economic breakthrough that may have occurred prior to 1800 would have been so quickly dissipated in a Malthusian population response that according to Clark there is no discernible change in living standards prior to the end of the eighteenth century.? Indeed, this position requires what this reader sees as the ironic claim that the only way to increase welfare before the advent of the modern world was for human suffering to increase; i.e. when other people die, you could then benefit.? In any event, all trends break at 1800, much as they did in the older historiography that separated the medieval economy from what came later in every fundamental way.

This is a long introductory discussion that references a lot of books other than the one under review, for which I crave the reader?s indulgence.? In fact, Bas van Bavel?s Manors and Markets: Economy and Society in the Low Countries, 500-1600, is at least as important for what it contributes to the emerging literature on the medieval origins of modern European economic growth, as it is for its direct contribution to the more narrowly circumscribed economic history of the Low Countries.? I should add, however, that it does indeed offer a significant contribution to the latter.? It is rich in detail, documenting the substantial regional variation that existed there (shockingly so given the relatively small area overall), and the shifting locus of the most advanced areas across the thousand years covered by his survey.? The Meuse Valley figures prominently in the Carolingian period, followed by the flowering of urban and industrial inland Flanders during the High Middle Ages, and finally by mercantile and maritime Holland, and its coastal cities in particular, in a sixteenth century he still characterizes as the Late Middle Ages.? Van Bavel?s range of topics includes everything from soil types, hydrological projects, choice of grains between spelt, wheat, and rye, forms of lordship, technological innovations in agriculture and industry, labor contracting arrangements, the standard of living, biometric and material evidence from the archeological record, legal rights to land, the power of political authorities, the emergence of communes and guilds, processes of urbanization, the minting of coins, the location of trade routes and the products traded along them, disease, social unrest, household structure, and of course, the making of cloth.? This list is even so not comprehensive, but it conveys the right idea.? For any economic activity that took place in the medieval Low Countries, van Bavel?s book will be the go-to source for a long time to come.? This is especially helpful as much of the monographic work on which he relies for his own source material is written in languages not readily accessible to a global scholarly audience.?

As wonderfully rich as all this is, most readers of this review are likely to find the broader argument about the powerful continuities between the distant past and the present the most provocative aspect of van Bavel?s work.? Broadly speaking, his argument rests on three components.? First, he postulates that what he calls the ?socio-institutional organization of the economy,? more specifically ?the rules that govern exchange,? is the most productive explanation for economic development (p. 4).? Second, he argues that these factors can vary considerably across even relatively small areas.? Finally, he asserts that the socio-institutional characteristics of a community demonstrate remarkable persistence over the very long run.? Despite the seemingly logical intuition that beneficial institutions ought to be readily adopted by at least close neighbors, this seems not to have been in fact the case.? Instead, van Bavel finds evidence of substantial variation in the response of even micro-regions to similar economic opportunities and changes in climate or population, depending on the socio-institutional framework with which they began.? The attentive reader will of course worry about the problem of origins, but in this case much of the land in question was reclaimed from the sea or swamp over the long Middle Ages, so van Bavel can often build his case from the moment of the original period of settlement.? In the final analysis he finds in the medieval history of the Low Countries ?a clear demonstration of how great the degree of socio-institutional path dependency and long-term continuity in regional structures was? (p. 396).

It is his close attention to the remarkable complexity of regional variation that leads him to reject many of the other commonly proffered explanations for long term economic fluctuations found in the broader economic history literature.? So while he acknowledges the importance of technological change, climate shifts, and population movements for the specific experiences of economic actors, he is not willing to grant them explanatory power for economic development.? He argues that they are too blunt an instrument for parsing the remarkable geographic variation in outcome already witnessed in the Middle Ages.? For example he says of climate and demography that ?these factors often vary little over wide areas, whereas economic and social developments within these areas may differ widely? (p. 3).? Likewise with arguments about commercialization, which he admits seem especially attractive in discussing the history of the Low Countries, characterized as it was from an early date by large cities and unusually intensive trade networks.? All of these factors, ?climatic, geographical, demographic, and political,? had their impact of course, but those effects were ?directed? by the differing socio-institutional factors ?in divergent directions? (p. 387).? Not surprisingly, given this perspective, he also upends the more typical narrative about urbanization as a factor in economic development.? Instead of seeing urbanization as a cause of economic growth, he argues it was more likely the other way around.? Economic growth, especially as it concerned the agricultural sector, was the necessary precursor of rapid urban growth (p. 384).

What then were the critical socio-institutional factors to which we can attribute the largely successful economic development of the Low Countries, at least as measured by the standards of a wider medieval Europe?? The answer to this question is not always entirely clear.? But it seems safe to say that van Bavel gives particular pride of place to two factors:? ?a relatively efficient system of exchange combined with social balance? (p. 405).? His definition of an efficient system of exchange is straightforward enough.? It includes unhindered regional interaction, the presence of open and flexible markets, and the early disappearance of non-economic coercion (p. 11).?? But his understanding of what might constitute social balance is more elusive.? The closest he comes to a concrete definition is to say that social balance occurs directly when ?independent actors and their associations played an important social and economic role,? and indirectly when those actors have ?influence on the authorities? (p. 408).? The Low Countries were blessed with this ?social balance? on account of ?the large degree of freedom for ordinary people? that occurred quite early in their history (p. 409).?

In the final analysis then, we have a story about the medieval period that resonates closely with our understanding of what makes a modern economy work best: relatively unrestricted and autonomous individuals, with access to efficient and well integrated markets, whose worst instincts are held in check by social institutions that promote balance.? No wonder their world proved to be such a good predictor of ours — their world was essentially ours, just on a smaller scale.? Some readers might be daunted by the level of detail that van Bavel dives into in order to substantiate his most important fact: the incredible complexity and variety of micro-regional differences in social institutions in the medieval Low Countries.? But for those who persevere to the end of this long book, his is a happy, and persuasive, tale indeed.

Notes:
1. Jack Goldstone, Why Europe? The Rise of the West in World History 1500-1850, McGraw-Hill: 2008; Jan Luiten van Zanden, The Long Road to the Industrial Revolution: The European Economy in a Global Perspective, 1000-1800, Brill: 2009; Paolo Malanima, Pre-Modern European Economy: One Thousand Years (10th-19th Centuries), Brill: 2009; and Timur Kuran, The Long Divergence: How Islamic Law Held Back the Middle East, Princeton University Press: 2010.
2. See for example, Deirdre McCloskey, Bourgeois Dignity: Why Economics Can’t Explain the Modern World, University of Chicago Press: 2010; Jan de Vries, The Industrious Revolution: Consumer Behavior and the Household Economy, 1650 to the Present, Cambridge University Press: 2008; or Joel Mokyr, The Enlightened Economy: An Economic History of Britain, 1700-1850, Yale University Press: 2010.
3. Gregory Clark, A Farewell to Alms: A Brief Economic History of the World, Princeton University Press: 2008.

Anne E.C. McCants teaches medieval and early modern economic history at the Massachusetts Institute of Technology.? Her research interests in the Low Countries have ranged from historical demography to the role of social welfare institutions and the rise of consumer culture.? She is currently working on a project to explore the financial underpinnings of Gothic cathedral construction in the High Middle Ages.

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (June 2011). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Markets and Institutions
Geographic Area(s):Europe
Time Period(s):Medieval
16th Century
17th Century

Living Standards in Latin American History: Height, Welfare, and Development, 1750-2000

Author(s):Salvatore, Ricardo D.
Coatsworth, John H.
Challú, Amílcar E.
Reviewer(s):Salvucci, Richard

Published by EH.NET (June 2011)

Ricardo D. Salvatore, John H. Coatsworth and Am?lcar E. Chall?, editors, Living Standards in Latin American History: Height, Welfare, and Development, 1750-2000. Cambridge, MA: Harvard University Press, 2010. iii + 313 pp. $30 (paperback), ISBN: 978-0-674-05585-8.

Reviewed for EH.Net by Richard Salvucci, Department of Economics, Trinity University.

In 1999, the David Rockefeller Center for Latin American Studies (DRCLAS) at Harvard University published a milestone work in the field of economic history, Latin America and the World Economy Since 1800.? I reviewed the book for EH.Net and concluded something to the effect that if you wanted to know where the action was in Latin American history, you had come to the right place. I hate to sound like a broken record, but I can?t help thinking much the same about this volume. Sixty percent of the book (measured crudely, by page count) is still about Argentina, Brazil and Mexico ? and whatever ?Latin America? is, it isn?t that. However, its authors are an altogether different group and part of a new generation of scholars, which is only fitting. While it is true that there were historians, especially of the ?Berkeley School,? who had concerned themselves with historical patterns of indigenous diet and nutrition in Mexico under the stress of European colonization, when Woodrow Borah died in 1999, his publications were still regarded as the best work on the subject.? The highest compliment I can pay to these authors is that Borah would have admired and appreciated their efforts as a decisive advance. For like its predecessor, Living Standards in Latin American History is pioneering work.

Mexico ???

Appropriately enough, the volume begins with two studies of Mexico, and even if they were not intended to be read together as a revisionist work, they amount to just that. Am?lcar Chall? and Morimay L?pez Alonso have given us two centuries of Mexican anthropometric history, and if they don?t precisely answer all the questions, they reframe the debate. Based on comparable archival records (from the military ? some draftees, others volunteers) and methods of analysis (Maximum Likelihood Estimation of Truncated Distributions), they tell a story something like the following. After 1730, the stature of the lower classes (especially peasants, but later, urban workers too) fell for nearly a century. Starting for generations born around 1830, there was a recovery until 1850, and then another fall for generations born around 1860 and continuing through 1880, after which there was some recovery through the outbreak of the Revolution in 1910. Whereas the Revolution of 1810 seems to have had little effect on stature (even though population losses, at perhaps a million people, were enormous), the Revolution of 1910 (with catastrophic losses placed as high as three million) exacted a cost in lost stature reflected in a sharp decline in life expectancy. Recovery did not begin until the generations of 1920 and 1930. The sample size after 1940 is too restricted to draw firm conclusions, although elsewhere, L?pez Alonso has cast some doubt on the ubiquity of the heyday of the so-called ?Mexican Miracle.?

I think economic historians will be arguing about the significance of these results for years, for they both support and contradict the long-standing thesis of the ?decline of Mexico,? which has now become something like conventional wisdom, although there are dissenters.? Nor do Chall? and L?pez Alonso propose merely some trivial modification of chronology. There is now reason to suspect that Mexican independence actually meant something, after being told for years that rupture in government and its institutions was an outdated fetish of political historians. Specifically, Chall? implies that the much-vaunted ?Bourbon Reforms? and their spectacular translation into mineral wealth and imperial revenues coincided with the start of an equally impressive decline in popular welfare. On the other hand, the disintegration of the Bourbon state, which may have approximated its nadir in the 1830s and 1840s, coincided with the first signs of a temporary recovery. It is probably deeply significant that our hesitant attempts to reach some approximation of the value of national output ? in truth, hardly much of an advance on what contemporaries could conjure up in the nineteenth century ? have suggested precisely the opposite. There are, it appears, lies, damned lies, and Mexican GDP.
???
Colombia, Argentina, Brazil, Uruguay, Chile

Similar themes emerge in these essays. According to Adolfo Meisel and Margarita Vega, who employ a sample of nearly 16,000 passports, the standard of living in Colombia in 1870-1905 was stagnant, something reflected in the largely unchanged height of the Colombian elite. The general impression of a much-delayed onset of export-led growth is confirmed by very slow population growth (perhaps one percent per year) and essentially flat terms of trade.? If anything, the work of Meisel and Vega leads one to have somewhat greater confidence in the pre-1905 price data and population data, which are by no means as abundant as the passport data from the wide range of cities they employ.

The very loose association between stature and conventional measurements of national product is again taken up by Ricardo Salvatore in his study of Argentina between 1901 and 1940. To reduce Salvatore?s argument to its essentials, conventional macroeconomic indicators ? per capita GDP, exports, real wages ? provide rather different, and not necessarily consistent, measures of welfare, although the nature of the series themselves casts some doubt on whether rank-order correlations are necessarily the best way of disentangling them.? Nevertheless, after constructing Ordinal Quality of Life indices, Salvatore concludes that Argentines were unambiguously better off in 1929 than they had been in 1914. On the other hand, whether they were better off in 1914 than in 1901 is ambiguous, and depends on the measures of welfare chosen. But by 1939 Argentines were unambiguously better off than they had been in 1901. Salvatore has underscored the point that neither stature nor GDP can possibly be considered decisive measures of welfare, although presumably, to have been better off in 1939 than 1901 you still had to be breathing. Death and the long run require no introduction to readers of this review.

The paper on growth and inequalities of height in Brazil by Leonardo Monasterio and his coauthors is, by contrast, somewhat more conventional. Its principal focus is the dimensions of inequality, social, ethnic and geographical, and their reflection in anthropometric data. In a way, the results are less controversial, for they find that severe inequalities at personal and regional levels affected the height of Brazilians between 1939 and 1981.? It will be very interesting to see the extent to which the recent, much ballyhooed surge in Brazilian growth and the ostensible reduction in the country?s persistently deep inequalities show up in the anthropometric data as well. Realistically, what better confirmation could there be of whether or not reduction of poverty and inequality in Brazil in the twenty-first century ? as it is portrayed in the international media ? has occurred.?

Luis B?rtola and his coauthors are not concerned with anthropometric issues per se, but are rather involved with questions of convergence and its estimation, and of human development indices rather than of rates of income growth per se. For Argentina, Brazil and Uruguay, their analysis also makes the reasonable supposition that inequality matters (although historical cynicism inclines me to wonder if more could not be explained by elite efforts to maintain inequality in some countries rather than to reduce it, at least until rather recently). But by all accounts the results of their exercise, which is explicitly concerned with issues of data specification and measurement, are provocative. To the extent that there is a consensus view, it has been that convergence in Latin America occurred mostly between 1940 and 1980, rather than before or (at least until 2000) since. For B?rtola and his coauthors, the effect largely disappears under disparities in measured educational achievement, a very significant and suggestive result in light of recent discussions of the decline of inequality in Latin America.? For this reason, this is a paper that merits wide reading and debate: it goes to the heart of some of the more interesting explanations for the recent ?end of poverty,? if not end of history discussions in the financial press that have left some observers shaking their heads.

James McGuire?s work on Chile is not anthropometric either, but it raises pertinent questions about what he terms the ?wealthier is healthier? conjecture. Even though democratic Chile was relatively affluent in 1960, infant mortality was high and life expectancy unexpectedly low, in part because the state responded to the organized demands of urban constituencies rather than concern itself with basic needs or absolute poverty. Ironically, much of this changed under the harshly repressive government of August Pinochet (1973-1990), although historians familiar with public health campaigns in Nazi Germany and Fascist Italy might not be shocked by the coincidence. Whatever the case, McGuire makes it clear that the military government targeted the poorest areas in Chile for a larger share of public spending, with impressive results, including a 70 percent decline in infant mortality from 1974 to 1983. To the question of whether democratic governments necessarily improve public health, McGuire?s answer is necessarily ambiguous.

Guatemala

The paper by Luis R?os and Barry Bogin covers disturbingly similar ground, and then some. By and large, there is very little anthropometric evidence for an improvement in twentieth century Guatemala, and much to the contrary. Guatemalan migrants to the United States do better, at least in terms of body size and stature, which suggests that the facile characterization of indigenous peoples as ?short but healthy? misses the point, let alone a measure of lost human potential. But even worse, the skeletal evidence for the pre-contact population, while admittedly based on small samples and resulting in indirect projections of stature, suggests that the nutritional and disease environment for the ancient Maya were less stressful than for their twentieth century descendants. If there is anything that encapsulates the dismal view of the consequences of modernization that many historians of Latin America harbor in some recess of their consciousness, surely this paper provides some explanation. Yes, there is a lot of naive romanticism in the prelapsarian view of the Americas as a world that the Europeans destroyed. But as Freud is said to have famously remarked, ?The paranoid is never entirely mistaken.? I would like to know what Woodrow Borah, who thought somewhat differently, would have made of this paper.

Conclusion

The volume provides no overall conclusion, so the reader is more or less left to consider its implications on his or her own. Surely, there are plenty of provocative directions in which this fine, path-breaking collection could lead us. One that immediately occurred to me is its relation to the ongoing debate over declining inequality in Latin America since 2000.? I am really not competent to bring the findings of those scholars into this anthropometric perspective, but it is hard not to be struck by the fact that we are essentially being asked to believe that generations, if not centuries of a particular pattern ? a ?colonial heritage? ? have been permanently reversed in a decade, and in some cases, by nothing more than imaginative and sophisticated, but nevertheless relatively basic Conditional Cash Transfer programs in Mexico, Brazil and Colombia, to name only those with which I have some familiarity. Was it really that easy (or that difficult)? Or do we conclude that virtually every misguided policy had to be exhausted in a sort of chronicle of political, ideological and technical ineptitude before emerging from absolute poverty and profound inequalities was possible? Did we really have to put the people of ?Latin America? through colonial repression, national revolution, liberal reformism and lost decades of structural adjustment before we could get them back to square one? After 500 years? I want to say ?I hope not,? but sad to say, I?m afraid so.

Richard Salvucci is writing a history of the Lizardi Brothers in Mexico, the United States, Great Britain and Europe from 1750 through 1890. He is the author of Politics, Markets and Mexico?s ?London Debt,? 1823-1887 (Cambridge University Press, 2009). Richard.Salvucci@trinity.edu

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (June 2011). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economic Development, Growth, and Aggregate Productivity
Living Standards, Anthropometric History, Economic Anthropology
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII

Paying for the Liberal State: The Rise of Public Finance in Nineteenth-Century Europe

Author(s):Cardoso, José Luís
Lains, Pedro
Reviewer(s):Dincecco, Mark

Published by EH.NET (August 2010)

Jos? Lu?s Cardoso and Pedro Lains, editors, Paying for the Liberal State: The Rise of Public Finance in Nineteenth-Century Europe. Cambridge, UK: Cambridge University Press, 2010. xii + 310 pp. $85 (hardcover), ISBN: 978-0-521-51852-9.

Reviewed for EH.Net by Mark Dincecco, IMT Lucca Institute for Advanced Studies.

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Paying for the Liberal State is a novel collection of case studies about the development of modern systems of public finance in core and peripheral European countries from the start of the nineteenth century to the eve of World War I. The work is edited by Jos? Lu?s Cardoso and Pedro Lains, both Research Professors at the Institute of Social Sciences at the University of Lisbon. The contributors are prominent scholars in European economic history.

By my count, Paying for the Liberal State makes three key contributions. Prior to its publication, there was no book-length investigation of the development of public finances in Europe after 1815. I view Paying for the Liberal State as a nineteenth-century counterpart to works on pre-modern public finances like The Rise of the Fiscal State in Europe, 1200-1815, edited by Richard Bonney (Oxford: Oxford University Press, 1999). With its focus on detailed case histories, Paying for the Liberal State also complements the cross-country, econometrics-oriented literature that covers the classic gold standard era from the 1870s to 1913. Finally, by providing a clear and accessible account of the evolution of public finances over the long run, Paying for the Liberal State will be of use to scholars in neighboring disciplines that study the interplay between politics and fiscal change. I describe other notable attributes of this book throughout my review.

The chapter ordering of Paying for the Liberal State runs according to relative fiscal sophistication. Britain represents the benchmark tax system. According to contributor Martin Daunton, the establishment of parliamentary budgetary control in 1688 was just one of many steps towards the creation of a fiscal regime that was truly legitimate in the eyes of taxpayers. Changes in tax composition, the extension of voter franchise, and instances of political leadership over the nineteenth century were also crucial elements to engender public trust.

Lack of legitimacy was one feature that distinguished the fiscal systems on the European continent from that of Britain. The chapter on the Netherlands by Jan Luiten van Zanden and Arthur van Riel draws heavily from their recent book (The Strictures of Inheritance: The Dutch Economy in the Nineteenth Century, Princeton: Princeton University Press, 2004). Van Zanden and van Riel provide a useful timeline of Continental political processes over the nineteenth century: the restoration of absolutist rulers after 1815, the transition to liberalism in the 1840s, and the extension of voting rights from the 1870s onwards. Their analysis of the failure of the ?enlightened? autocrat William I (reign, 1815-40) illustrates how transparency and political representation helped create a credible tax regime. Van Zanden and van Riel?s description of the importance of colonial possessions like Indonesia to the sustainability of Dutch finances is also of particular interest. The chapter on France by Bonney emphasizes two related factors that prevented nineteenth-century fiscal innovations. The longevity of an oligarchic social order, coupled with the broad failure of population growth, slowed the establishment of public trust in the French tax system.

The next chapters are dedicated to polities east of the Rhine River, where issues of state formation were crucial. The contribution by Mark Spoerer on Germany neatly describes the political geography of the German territories before unification in 1871. Spoerer concentrates on Prussia, the largest nineteenth-century state, and W?rttemberg, an example of the sort of impersonal tax systems that prevailed in the South. His discussion of tax competition and free-riding among pre-unitary polities should be of particular interest to political economists. The chapter on Italy by Giovanni Federico illustrates how the aggressive pre-unitary state of Piedmont made fiscal innovations to further its nationalistic ambitions. Federico also documents the continuity between Piedmontese tax institutions and those in the Kingdom of Italy, established in 1861, as well as the shortcomings of Piedmontese (and later, Italian) fiscal policies. The chapter on Austria-Hungary by Michael Pammer provides a lucid account of tax differences within the vast Empire. In contrast to Germany and Italy, Pammer?s work shows how fiscal problems can lead to the dissolution of states.

The remaining case studies are devoted to other aspects of the European experience. The chapter on Sweden by Lennart Sch?n highlights the unique features of its fiscal system. Peasants were represented in parliament since late medieval times and played an important role in Swedish politics, often forming alliances with the king against the nobility. The link between the traditional political power of the peasantry and the modern Swedish welfare state illustrates how history can influence current outcomes. Surprisingly, Swedish public finances relied upon archaic tax structures including payments in kind through most of the nineteenth century. The chapter on Spain by Francisco Com?n describes the interplay between politics and public finances in great detail. Negative political shocks including civil war repeatedly undermined efforts to enact fiscal reforms, no matter how important they may have been. The chapter on Portugal by Cardoso and Lains follows suit. Their take on the excruciating process of institutional change over the nineteenth century is sympathetic, as Portugal (like Spain) was ultimately able to establish modern fiscal structures.

The conclusion by Larry Neal employs comparative analysis to bring together the divergent case studies. Neal makes compelling use of Harley Hinrichs? classic model of tax transformation from traditional to modern economies (A General Theory of Tax Structure Change during Economic Development. Cambridge, MA: Harvard University Press, 1966). His contrast between Britain and the European continent is of particular interest. Drawing upon the carefully-established results from previous chapters, Neal argues that it was difficult to transfer British fiscal institutions abroad, though they were widely recognized as superior. This subtle point has implications for current policy debates: if Anglo tax structures were not easily replicated throughout Europe, with its shared history of economic and political traditions, then we might think that it will be even harder to export updated versions of them to the modern developing world, which has diverse historical legacies.

In total, Paying for the Liberal State is a valuable addition to the historical literature on European public finance. Jean-Laurent Rosenthal claims that the main policy problem for governments since 1800 has been to design and implement growth-enhancing fiscal strategies (Review of The British Industrial Revolution in Global Perspective, by Robert Allen. Journal of Economic History 70, no. 1 [2010]: 242-5). Through its detailed evaluation of the diverse ways in which nineteenth-century governments taxed, borrowed, and spent public funds, Paying for the Liberal State provides insights that help us to better understand this key challenge. By and large the book does not use the language or tools of modern political economics to frame its analysis. Now that a coherent set of case histories are in place, however, there is ample opportunity for enterprising research that builds upon the solid foundations that Paying for the Liberal State sets.

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Mark Dincecco is Assistant Professor in the research area of Economics and Institutional Change at IMT Lucca Institute for Advanced Studies, located in Tuscany. His current manuscript, under contract with Cambridge University Press, examines political transformations and public finances in Europe from 1650 to 1913. Email: m.dincecco@imtlucca.it.

Copyright (c) 2010 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (August 2010). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Government, Law and Regulation, Public Finance
Geographic Area(s):Europe
Time Period(s):19th Century

Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History

Author(s):North, Douglass C.
Wallis, John Joseph
Weingast, Barry R.
Reviewer(s):Margo, Robert A.

120 1024×768 Normal 0 false false false EN-US ZH-CN AR-SA

Published by EH.NET (June 2009)

Douglass C. North, John Joseph Wallis, and Barry R. Weingast, Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History.? New York: Cambridge University Press, 2009. vii + 308 pp. $30 (hardcover), ISBN: 978-0-521-76173-4.

Reviewed for EH.NET by Robert A. Margo, Department of Economics, Boston University.

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One recent Sunday morning my wife and I were reading the New York Times.? ?Darling,? she said, ?have you noticed how often the word ?iconic? appears in the Times lately??

I looked up from the Arts section.? ?Hmm — you?re right! Everything and everybody is iconic these days.? Wonder what it means.?? She looked bemused as if I were insufficiently caffeinated.? ?Iconic — an icon perhaps??

If anyone is iconic in the economic history world Doug North certainly qualifies (along with Robert Fogel, Stanley Engerman, and a few others).? In my book people are iconic if I can summarize their life?s work in ten words or less.? North takes two: ?Institutions matter?.? The opposite perspective — viewed in isolation most institutions don?t matter much, being Harberger triangles and small ones at that — has its fans in modern economics.? But North has convinced the majority of economic historians, a goodly share of world?s development wonks, and the Nobel Prize Committee that he?s right.

I was taught by Robert Fogel to be catholic in my tastes and respectful of my elders. Hence for a while I read each North book that came along.?? But eventually I became frustrated — the books seemed ever more repetitious, with less and less in the way of real economic history.

Anyone who feels like I do should read Violence and Social Orders.? This time, North is joined by two prominent and strong-minded co-authors, John Wallis and Barry Weingast.? Their collaboration has been fruitful.?? Wallis has written many important articles on the growth of government and, equally important, has helped produce fundamental long-term data series from archival sources.? He remains grounded in the nitty-gritty of history no matter where his theoretical musings take him.? Weingast is a political scientist of real and lasting distinction, the co-author (with North) of a celebrated paper in the Journal of Economic History.?? (North is the Spencer T. Olin Professor in Arts and Sciences at Washington University at St. Louis; Wallis is Professor of Economics at the University of Maryland; and Weingast is the Ward C. Krebs Professor of Political Science at Stanford University.)

After a brief preface, Violence is divided into seven chapters.? Chapter one, ?The Conceptual Framework,? sets the stage and effectively summarizes the book?s arguments.? This is a book about the organization of society.? North and co-authors (NWW, hereafter) concentrate on two ?social orders? — limited access or ?natural states? versus ?open access? orders.?? Open access orders offer their members a high and growing standard of living, lots of organizations, a bigger but more decentralized government, and equal treatment under rule of law.? Limited access orders offer a lower standard of living, a consequence of lower trend growth and a more volatile growth rate; less social capital and fewer organizations; and limited, if any access to the polity, because the polity is based on privilege and unequal treatment.? Organizations matter because North has been and always will be a Smithian — growth is about the division of labor.? Division of labor goes hand in hand with organizations — the pin factory, after all, was a firm.

In NWW?s view, the fundamental problem that any social order must solve is the problem of violence.? If I cannot prevent you from stealing my freshly-killed game or, worse, killing me, I do not have much of an incentive to engage in trade with you.? For people to form groups of size capable of generating aggregate economies of scale they must be convinced that threats of violence within the group do not overwhelm the benefits from group formation.? The first time this happens in human history in a big way is when limited access social orders form.

In a limited access social order some individuals — ?elites? — are assumed to be endowed with a comparative advantage in violence.? NWW envision a scenario in which the elites simultaneously ?lay down their arms? — that is, refrain from violence.? The ?limited? in limited access means that people other than elites are on the scene.? For the sake of argument, let?s call them ?peasants.?? The peasants get something from the elites — protection from marauding bandits that they pay for by tilling the lands, for example, under the control of the elites (shades of North and Thomas!)? But the peasants cannot readily join the elites — the elites are the coalition that keeps the group together.?? The elites may grant privileges, rights, and so on to each other but these are always under the shadow of the gun; the natural state is an ?adherent organization? meaning that interactions among elites must be incentive compatible at all points in time.?

The limited access order may do some things quite well.? It maintains order, and it may even keep the peasants? bellies full.? A priestly class, one that helps with rent distribution, may generate a belief system that keeps the peasants happy even if they are not that well fed.? But the limited access order does not permit organizations to form freely, nor does it treat people equally.? In NWW these features of the limited access social order create incentives that limit at the margin, for example, innovation.? However, the limits the limited access order imposes on the problem of stemming violence are essential such that, if they were not imposed, the order would dissolve.?

Next, NWW describe open access social orders.? An open access order has a positive rate of economic growth and a low degree of volatility to its growth rate.? This is important because economic growth is something that happens in the long run.?? An open access order controls violence in a very different way from the natural state.? In the open access order there are separate, ?third party? organizations — the military, the police, and the courts — that control violence.? However, these organizations do not operate independently nor do they operate at the caprice of politicians.? They are constrained by institutions — rules of the game — as are the politicians.? No individual is above the law. Open access means that politics and, more broadly, organizations are free-entry in the sense of economics.? Moreover, the right to form an organization is defined ?impersonally? — one does not need to seek a privilege.? Impersonality plus equality under the law facilitates the formation of new organizations.? NWW are careful not to claim causality but they clearly think that more organizations (more social capital) are better.? Rent seeking occurs in the open access order but it is more likely to be growth enhancing and to benefit large numbers of people than in the natural state.

The 64 trillion dollar question is:? How do we get from the natural state to the open access order? According to NWW this cannot happen without three ?doorstep? conditions.? These collectively describe a more or less open access order among the elites.?? Elites must be ready and willing to treat each other impersonally; there should be rule of law among elites, if not the rest of the population; and elites, as a group, should have control over a military.? Once these conditions are met the transition to open access can take place fairly quickly in historical time.

The remaining chapters of the book flesh out these ideas in greater detail.? The chapters follow a similar protocol — the theory is embellished and illustrated by examples from history, often very wide ranging in time and place.?? Chapter two elaborates on the natural state, drawing on the Aztecs and Charlemagne for examples of state formation, and France and England in the sixteenth to eighteenth centuries for mature examples of the form.? The evolution of English land law, crucial to the emergence of secure property rights, is the subject of chapter three.? Open access orders are explored in greater detail in chapters four and five and crucial transitions in Britain, France, and the United States are covered in chapter six.? Chapter seven concludes by recapitulating the main points and by arguing that a proper political economy must recognize the complex, symbiotic relationship between political and economic development.

Although I think that Violence has a lot going for it, that is not to say it is a successful book overall.? It is useful, in my opinion, to contrast NWW with another work of ?big think,? Daron Acemoglu and James Robinson?s Economic Origins of Dictatorship and Democracy.? This is fair because NWW do so themselves in their book. Imagine that yours truly is to teach a graduate class on ?Institutions and Economic Performance.?? My goal is to train students to do independent research.? Which of these two works would better serve as a text? For me the answer is easy — Acemoglu and Robinson.

The reason I prefer Acemoglu and Robinson has to do with a core failing of NWW as economics.? Violence goes beyond earlier North by providing a better taxonomy for what he has been writing about since forever.? No question this is worthwhile:? economic historians have a clearer language for describing crucial features that distinguish one society from another.? However, NWW do not really provide an operative equilibrium theory of natural versus open access orders derived from the ?bottom up? (micro-behavior) or of the transition from one to the other in ways that are useful to researchers like me. They purport to think in game theoretic terms but they do not ?do? game theory.? Here the contrast with Acemoglu and Robinson is telling (and decisive, in my opinion). ?One can either like or dislike Acemoglu and Robinson?s specific dynamic games but at least they are there on the page to be debated.? Not so with NWW.? In this sense, chapter seven is very premature in its title (?A New Agenda for the Social Sciences?).

Although I do not think NWW is particular useful as a practical blueprint for research beyond taxonomy I emphasize that many of the ideas in the book have merit and are worthy of further exploration, particularly in a policy setting where formal theory (as opposed to ideas) may be counterproductive.? Above all, the notion that one cannot simply ?get rid? of the superficial exterior of natural states and thereby uncover the beating heart of an open access order yearning to be free is the book?s most important idea, and profound.

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Robert A. Margo is Professor of Economics at Boston University.?? He recently stepped down as editor of Explorations in Economic History.

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Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Military and War
Markets and Institutions
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative