Published by EH.Net (September 2019)

Taco Terpstra, Trade in the Ancient Mediterranean: Private Order and Public Institutions. Princeton: Princeton University Press, 2019. x + 274 pp. $40 (cloth), ISBN: 978-0-691-17208-8.

Reviewed for EH.Net by Peter Temin, Department of Economics, MIT.

This is a synthetic book that aims to enlarge the narrative of ancient economic history. Terpstra reaches three conclusions about economic progress from the early years of the Iron Age through the Roman Empire. First, private mechanisms were essential to the operation of the ancient economy. Second, the public and private realm interacted in fluid ways. Third, economic growth was supported by public institutions.

Unhappily, the book is almost inaccessible to modern economic historians. The three conclusions listed above were taken from the book’s conclusions, not its introduction. The introductory chapter instead consists of a long discussion of the literature on the progress of history. Terpstra concludes his introductory survey by adopting the framework introduced by Douglass North, John Wallis and Barry Weingast in Violence and Social Orders (Cambridge University Press, 2009). He follows a recently published book on this period by J. G. Manning, The Open Sea (Princeton University Press, 2018), which is cited by Terpstra and adopts the same theoretical framework.

The strength of a book like this is in its details. The problem for readers is to evaluate the details and decide if they form patterns. The overall question is whether Terpstra provides clues that are more detailed than his summary. For example, he says when discussing the interaction between Phoenician traders and various Mediterranean islands, “In the Greek world, as elsewhere, the resolution of commercial conflicts was doubtless overwhelmingly done informally. Yet as a last resort it might well have involved the use of official courts of law” (p. 61). The conditional tense of this conclusion reflects the paucity of information. It suggests that Terpstra, like his readers, had trouble aggregating his examples.

Terpstra stresses the role of “public friendships” in chapter 2. These were indications that a member of a foreign trading network could be considered as a friend of the designating group. This is one of Terpstra’s “fluid ways” that do not fit easily into our modern framework of public and private. Is this concept useful? Terpstra notes that the prevalence of public friendships decreased as Roman influence grew at the end of his period. This suggests that public friendships were an imperfect substitute for public institutions. Terpstra appears to be showing us the long evolution of public institutions that are better known from Roman sources by looking at public institutions from the other end. Instead of telling a static story of early trade, he tells a dynamic story about the growth of trading institutions. He says as much in the conclusions to chapter 2: “The positive effect of Greek public friendship and Roman imperial ideology on diaspora trade disincentivized state representatives from investing in public enforcement infrastructure” (p. 75). As North, Wallis and Weingast argue, violence determines the direction of peacetime trade.

Terpstra turns his attention to the Hellenistic period in chapter 3. He uses the “Zenon archive” as a lens into this period. Zenon was an employee of Apollonios, a finance minister of Ptolemy II, and the archive records his accounts. Zenon mostly recorded public business in his letters, but there are other activities going on that may well have been for private gain. As anyone who has worked with letters knows, there are frequent omissions in the surviving record that obscure precisely what was going on.

Egypt was monetized in the third century BCE, and banks were ubiquitous under Ptolemy II. Apollonios imprisoned people, but he seemed to be interested in the long-run future of the state. In Terpstra’s words (p. 92): “If Apollonios had asymmetrically used state force for his own ends, this would have been seen by the local population as extralegal and extortionate. … Employing public means of violence had to be left strictly as a last resort to avoid damaging economic productivity and diminishing rent and tax revenue.” Apollonios was, in modern terms, a reasonably honest civil servant.

Terpstra looks at Rome in chapter 4, saying that, “It seems an uncontroversial proposition that the ongoing unification of currency and metrological systems under the Roman empire further facilitated economic development” (p. 126). Having just turned from the Hellenistic to the Roman world, it would have been preferable if Terpstra had added the Roman Republic to his list of government entities. The main body of the chapter is concerned with witness rankings as signs of social status, based on surviving witness lists. Terpstra quotes many ancient sources and modern interpretations, and he might have clarified his argument by the use of “social capital.” This concept, introduced by Robert Putnam in several books, could help describe how merchants and others shifted from private order to public institutions.

Chapter 5 is a retrospective view to show what was lost as the Roman Empire made its long decline. Terpstra introduces a concept he calls “economic trust” (p. 170). He would have done better to use the concept of social capital. Partha Dasgupta (Economics: A Very Short Introduction, Oxford University Press, 2017, p. 31) argues that social capital is the core of economics, embodied in a simple question: “Under what circumstances would the parties who have reached agreement trust one another to keep their word?”

Terspstra closes with speculations about the decline and fall of the Roman Empire. He cites Kyle Harper (The Fate of Rome, Princeton University Press, 2017) to argue that climate may have mattered, but his main aim seems to reverse Gibbons’ view by asserting that Christianity supported economic activity by maintaining what he calls economic trust and others call social capital.

This book contains many interesting details about ancient Mediterranean trade, although its focus is on economic institutions rather than inter-regional trade. It attempts to use modern economic theories to generalize from detailed examples. General readers might find John Hicks, A Theory of Economic History (Oxford University Press, 1969) — cited by Terpstra — a more accessible view of trade growth in the ancient Mediterranean.
Peter Temin is Professor Emeritus of Economics, MIT, and the author of The Roman Market Economy (Princeton, 2013) and, most recently, “Words and Numbers: A New Approach to Writing Ancient History,” Journal of Interdisciplinary History 50 (1), 31-58 (Summer, 2019).

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