Economy of Ancient Greece

Alex KrikosHellenic-American Cultural Association of Colorado

April 21, 2005

OverviewEvidence of EconomySocio-Political DriversValue SystemLand OwnershipLaborTechnologyConclusion

BackgroundAncient Greek Civilization

• Archaic Period: 776 to 480 B.C.

• Classical Period: 480 to 323 B.C.

• Hellenistic Period:323 to 30 B.C.

Qualitative Methods of Economic Analysis• Greece as collection of independent poleis or “city-states”

• Examination of sectors of the Ancient Greek economy

• Scholarly trends

BackgroundEvidence of Ancient Greek Economy

• Literary works (Demonsthenes, Lysias, Isokrates)

• Analysis of economic matters and lawsuits

BackgroundEvidence of Ancient Greek Economy

• Philosophical works (Xenophon, Plato, and Aristotle)

• How ancient Greeks perceived and analyzed economic matters

BackgroundEvidence of Ancient Greek Economy (other)

• Description of financial resources of Athens during Peloponnesian War

• Poems and dramas with random references to trade, manufacturing, status of businessmen, and other economic matters

• Ptolemaic Dynasty (ruled Egypt): bureaucracies to oversee numerous economic activities. Records of administrative issues, taxes, labor, and currency

• Boundary markers on land indicating security for loans

• Markings on pottery signifying various goods

• Shipwrecks showing types of trade, commerce routes etc.

Nature of Ancient Greek Economy

Primitive, or•Argument over quantity of goods and services•Argument over organizational principles•Johannes Hasebroek: …ancient Greek citizen was a “political man”, not an “economic man”

Modern?•Evidence of capitalistic economy•Evidence of free enterprise•Evidence interconnected price-making markets•Michael Rostovtzeff: …ancient Greek economy in the Hellenistic periodwas so great that it could not be considered primitive.

Nature of Ancient Greek Economy

Substantivist,or•Economy embedded in political and social institutions; that is, what is needed for the sustenance of city states.

Formal?•Prices are set from impersonal forces of supply and demand among a group of interconnected markets.•Karl Polanyi argues that ancient Greece did not have a developed market system until the Hellenistic Period. Economies were largely “substantivist” before then.

The Finley Economic Model

Moses I. Finley (~1973)•Ancient Greek economy of smaller scale and organization.

•Oikonomia: “household management”. Ancient Greek economy was embedded in political and social and economic institutions rather than the production, distribution, and consumption of goods.

•Embedded in ancient Greek value system that emphasized the wellbeing of the community over that of the individual.

•Subordination of economic activities to social and political ones.

The Finley Economic Model

Moses I. Finley (~1973)•Ancient Greek Value System

• Economic activities not subordinated to traditional activities of managing the family were held in low esteem. These were “banausic” work activities which meant investing money to make money. These activities were considered incompatible with the activities of the polis and were even considered as unnatural and morally corrupting.

• Production and exchange were to be undertaken only for personal need or to benefit the community as a whole

The Finley Economic Model

Moses I. Finley (~1973)•Ancient Greek Value System

• Bulk of economic activity was produced from the land.

• “Banausic” work including trade, manufacturing, and trade were looked down upon.

• Ancient Greek political elite were landowners with a primary interest in oikonomia—consumptive in nature which fulfilled traditional social and political needs, not strictly economic ones.

The Finley Economic Model

Moses I. Finley (~1973)•Supply/Demand & Pricing

• Impersonal price-setting mechanisms not adhered to.

•Prices set according to local conditions and personal relationships rather than the impersonal forces of supply and demand.

•Stemmed from self-sufficiency and the needs of the city-state.

The Finley Economic Model

Moses I. Finley (~1973)•Socio-Political Factors of Archaic Period

• Governed by “material wants” of citizens, such as food at reasonable prices and revenue obtained from taxes on trade.

• Social and political concerns focus on consumptive goals of citizens.

• Those who engaged in “banausic” occupations and sought profit from those occupations did not hold high positions in society or government.

• Finley’s model holds true for Archaic Period

The Finley Economic Model

Moses I. Finley (~1973)•Deviations from Finley Model in Classical Period

• Increase in population and political factors make the economy more capitalistic, modern, and networked.

•Economy of different city-states differed. Athens and Sparta were polar opposites in their social and political organizations.

The Finley Economic Model

Public and Private Economic Sectors• Free enterprise with private property and limited government

predominated before Hellenistic Period. Sharp contrast to other ancient civilizations.

• Main Economic Concern: Greek city-states made harmony with private economy (making laws, adjudicate disputes, protect private property rights, ensure food was available at reasonable prices, obtain tax revenue for government expenses.)

• Laws to Protect Economy: weights measures, coinage, food supply (laws against exports of grain), incentives for imports

• Athens did not tax its citizens directs expect in cases of emergencies (eisphorai) requiring the wealthiest of its citizens to perform public services (liturgies).

The Finley Economic Model

Public and Private Economic Sectors• Athens obtained revenue from leases of publicly owned lands

and mines.• Revenue was necessary for various government expenditures

(administrative costs, public festivals, maintenance of widows and orphans, military, and temples for gods.

• Expenditures were understood as a necessary impact on the economy (ex. Inscribed accounts of building projects such as Athenian acropolis)

• Finley’s model drew too sharp a difference between citizens (landowners) and non-citizens (non-landowners).

• Finley’s model upheld during Archaic and Classical Periods where . Vast majority of economic activity left untouched the government and carried out by private individuals.

The Finley Economic Model

Land• Most important economic sector in Archaic Period• Majority of agriculture carried out on the subsistence level by

numerous small family farms• Distribution of land among population was far from equal• Ethnoarchaeology shows how farmers adjusted crops for

variations in local topographical and climatic conditions.• Resources: Bronze and iron used in weapons. Little evidence

that copper was mined in abundance in Greece. Athens had abundance of silver.

• Land leases: Leases of mines preferred to leases of land for the Athens elite. Breakdown of Finley model regarding preference for consumptive acquisition of land and disdain for productive investments for profit.

The Finley Economic Model

Labor•Labor force at height of power (431 B.C.)

•305,000 people total•160,000 were citizens (80K men and women, 80 children)

•25,000 were free resident foreigners (metics)•120,000 were slaves (outnumbered male citizens 3:1)

•Citizens, metics, and slaves all performed labor in the economy.

The Finley Economic Model

Labor: Citizens/Metics/Slaves•Wage earning looked down upon (impingement on freedom and akin to slavery)

•Free men doing same work side-by-side with metics and slaves earned the same wages. Wages were adequate to make a living.

•Wages and expenses in Athens• Wages: one drachma/day at end of 5th Century B.C.

• Price of Wheat: one drachma for 16 days of wheat for one person

The Finley Economic Model

Labor: Metics•Foreign born, free non-citizens•Willing to become businessmen and wage-earners

•25,000 metics at height of ancient Greek civilization. Barred from owning land, but engaged in “banausic” occupations that were looked down upon by society.

•Metics had to pay special poll tax and serve in the military even though they could not own land or participate in politics and have a citizen represent them in legal matters.

The Finley Economic Model

Labor: Slaves• Undeniably a large part of labor force• Comprised over a third of population• Private property of land owners• Did not perform military duty expect in case of emergency

• Sources of Slavery: war captives, those who could not pay debts, people rescued and provided for in return for labor

• No particular race singled out for slavery• More human treatment: ability to exit slavery (“manumission”). Slaves had to compensate owners for their freedom. Freed slaves became “metics”.

The Finley Economic Model

Slaves

Metics

Freed from slavery but not citizens“manumission”

• “banausic”work• Businessmen• Work considered unworthy for citizens

Citizens

• Consumption based work ethic (social and political goals

• Have slaves or metics if they could afford them

• Finley said work was considered necessary but not ennobling

The Finley Economic Model

Slaves

Metics

Freed from slavery but not citizens“manumission”

• “banausic”work• Businessmen• Work considered unworthy for citizens

Citizens• Consumption based work ethic (social and political goals

• Have slaves or metics if they could afford them

• Finley said work was considered necessary but not ennobling

• Technology and manufacturing thought to stagnate due to cheap labor

Archimedes: Archimedes’ Screw

•Used as a water pump—can raise a great amount of water•Made out of wood and reinforced with iron• Still in use in some parts of the world

Conclusions

Evidence of both “modern” and “primitive” economies

Socio-political drivers in economic growthLand ownership a key attribute for citizensLabor was driving force for economic

expansion.