The Ancient Economy: Evidence and Models (Social Science History) [Paperback]

My favorite article on this book is Ian Morris paper on the archaeological evidence on Greek economic growth. I like that article because the author doesn't play with wild theories about how the ancient economy worked, while being rather ignorant of economics (I am looking at you Moses Finley), but instead tries to interpret the archaeological data and it's relevance for the study of ancient economic growth. What is incredible is that median house size in ancient Greece increased from 50 square meters in houses dated from 8th century BCE to 240 square meters in houses dated from the 4th century BCE, and that's only the area of the floor plan, adding probable second floors the typical ancient Greek house had 300 square meters in the 4th century BCE, larger than the modern American house. The quality of the houses also increased greatly, so the real value of the typical 4th century BCE house was 10 times greater than the value of the 8th century BCE house. Also, the archaeological finds of domestic objects also points out to a 10 fold increase in per capita supply of furniture, utensils and other household goods from the 8th to the 4th century BCE.

Even more impressive is that this process of economic growth occurred when the population of Greece increased 10 times. So Ancient Greece probably had much faster rates of economic growth than any region of the world during the early modern period. And perhaps it even approaches the growth rates of the modern world.

One thing that always makes me sad about ancient economic history is how the researchers have preconceived views that are very, very hard to displace even after great quantities of empirical evidence contradict these views. For instance, Richard Saller in the last full chapter of book says that we can explain all ancient economic growth as an increase in the per capita income of the mediterranean from 1.3 times minimum subsistence to 1.55 times minimum subsistence. In other words, the increase of two hundred times in the number of shipwrecks found in the mediterranean dated from the 8th century BCE to the 1st century BCE, the increase of orders of magnitude in the levels of hemispheric lead pollution recorded in the polar ice caps in these 7 centuries. The two statistics are followed by an equally impressive catastrophic decline during the late Roman and early medieval periods. Many other statistics of archaeological data share this trend, like those that I posted in the first paragraph. Ian Morris even has revised downwards his guesstimate of per capita income growth in ancient Greece, to miserable 25% in the 400 years from the 8th to the 4th century BCE. Saller than says that an increase in per capita income of 0.25 times subsistence is enough to explain the full range of archaeological evidence because it is equivalent to 1 trillion sestertii distributed over 250 years, a purely rhetorical argument.

These authors always tend to interpret archaeological data trying to always minimize their impact on their notions of the stagnation of the pre-modern world is actually the result of the belief that economic growth, real growth, is only the domain of the last 200 years. One classic example is by Hopkins that claims that the increase of number of shipwrecks in the mediterranean was the result of the effects of taxation over large distances that catalised long range trade. Actually, the increase in long range trade that allowed the increase in taxation, by providing a greater pie to tax. Using this method of investigation take the fact that average american houses increased 5-6 times in the last 200 years, as the average number of household goods increased a few dozen times in the last 200 years. If these men were archaeologists of the distant future excavating the modern US they would estimate that American per capita income rose from 1.2 times minimum subsistence in 1800 CE to 1.7 times minimum subsistence in 2000 CE. Actually modern estimates say that American per capita income increased 20-25 times, from 3 times minimum subsistence in 1800 CE to 60-75 times minimum subsistence in 2000 CE. While I don't think that Ancient Greek and Roman growth ever approached these levels, so say that per capita income increased 25% after 900% increases in archaeological evidence of per capita consumption of housing and household goods is plain minimalism. I would guess 400% increase in real per capita income in Ancient Greece from the 8th century BCE to the 4th, with real wheat wages increasing from the subsistence minimum level of 3 liters to 15 liters in the 4th century BCE (Athenian wages in the 4th century BCE were 14.5 liters of wheat, compared to 3 liters for 18th century India and China, perhaps the minimum subsistence level, as it is equivalent to 8,000 calories). Wages in terms of household goods and housing probably increased at faster rates since agricultural productivity probably increased at slower rates than productivity of manufacturing and construction, smaller, newer and less developed sectors of the ancient economy.

The belief that real economic growth is only natural of the last 200 years leads these authors to start they analysis always assuming the worst possible interpretation of archaeological data. Instead of interpreting it in the direct light of the evidence using modern methods and good sense. Perhaps the fact is that modern economic growth started in the 18th century because it was in this century that the restrictions of the Ancient Regime were lifted, allowing the market process to work out at it's full potential, the growth was so great in the next centuries mainly because of the stagnation of the last centuries meant that the world economy in 1750 was operating far below it's potential. The restrictions on the world economy in 1750 CE, that can mainly attributed to the Ancient Regime, were actually put into place by Diocletian in the early 4th century, when he tried to avert the collapsing ancient economy by freezing it though legal measures. The ancient economy collapsed anyway, but the legal measures strangled the European economy for the next 15 centuries. Serfdom, for example, started with Diocletian and all that terrible medieval class system.

Another bad part of the book is the final chapter, where Greif claims that while the technology of water power, invented in the Roman period, was not extensively used in the Roman era, but in the medieval era that it exerted it's full potential. First, the use of water power did not start in the Roman period, but in the classical or Hellenistic periods, in the early roman period it reached full maturity, by the early 2nd century the Romans used water mills not only to mill grain but also to power stone cutting saws and for large scale hydraulic mining. The number of findings in water mills only decline for the next several centuries, into the early medieval period, only in the second millennium that water power would be used again in the west to a comparable extent.