Peter Temin and the Malthusian Hypothesis for the limits of Roman Growth

Peter Temin has written one of the best recent books on the Roman economy. Most of the attention it has received has focused on the early chapters which present evidence about the existence of an empire-wide grain market (e.g. here). Instead of reviewing the entire book, I will concentrate on Chapter 10 — which one of the more speculative chapters in the book as it addresses whether or not the Roman economy could be both broadly Malthusian and capable of generating growth in per capita income.

The question Temin address is clearly an important one. Scholars — both economists and historians — usually assume that in Malthusian economies, real wages and hence the living standards of ordinary people are close to subsistence. Hence the claim in Greg Clark’s book that even in 18th century England living standards were no higher (and possibly lower) than they had been in prehistory. And the claim that living standards were very low in the Roman empire is commonly repeated in most popular histories.

Temin makes the point that even in a broadly Malthusian economies, cycles of per capita income and population are slow moving. Hence it was possible for incomes to remain above subsistence for sustained periods of time — where sustained means several generations or as long as a century. We know from the Black Death period in Europe that following the plague real wages remained higher for well over a century across Europe and only began to converge downwards two centuries later in the 16th century (e.g. see here and here).

Similarly, an increase in technology or in productive resources could cause incomes to rise and remain high for a century or more before negative Malthusian feedback effects kicked in. Temin suggests that the prosperity of the early Roman Empire could have been driven by the imposition of peace in the Mediterranean (Pompey’s suppression of the pirates or the pax Romana more generally) or by technological improvements (of course, the two factors may not be independent if the prosperity generated by the pax Romana helped spur innovation or the diffusion of new technologies).

Temin’s argument therefore suggests that the Roman economy was capable of a modest increase in living standards. But it was not likely to generate a transition to sustained growth. And according to Temin, had the empire continued to thrive after the 3rd century crisis, subsequent population growth would likely have reduced living standards back to where they were before growth began.

But I want to push back on Temin’s reliance on the Malthusian model to understand the Roman economy. The point is that a single sector model may not be useful for understanding the process of Smithian growth that accompanied the establishment of the Roman empire. Recent work by Lemin Wu makes the point that in a two-sector model the standard Malthusian predictions do not hold: sustained increases in per capita income are possible.

In Wu’s model there is a subsistence sector and a luxury sector. Increases in productivity in the latter do not translate as rapidly into faster population growth. This means that an economy that shifts away from the subsistence sector towards the luxury sector can achieve permanently higher income levels. Wu explicitly addresses his model to the Roman case:

“It follows that the Romans were rich not because technological progress temporarily exceeded population growth — as Malthusians claim — but because Rome had a business-friendly legal system and an active market economy. Well-functioning courts and marketplaces boost industry more than they boost agriculture; this biases the production structure toward luxury, and thereby raises the average living standards of the whole society”.

Another way to approach this idea is through urbanization. By modeling the economy through a single sector — agriculture — the Malthusian model assumes away any role for cities. But we know that cities raise productivity in part because they make possible a denser division of labor. Cities also relieve demographic pressure since they were population sinks characterized by higher mortality and lower fertility than the surrounding countryside.

The Roman Empire had a number of cities which were truly large by pre-industrial standards. Rome itself had perhaps 1 million inhabitants circa 100 AD. In the more urbanized areas of the Empire like North Africa urbanization rates were higher than they would be until modern times.

To take the North African case, tax records reveal that even a minor city of no political significance like Siagu had free populations of around 14,000 (Duncan-Jones, 1963). In addition to Carthage there were a number of cities with populations of at 20,000, including Thelento, Diana Veteranruma, Althibros, Leptis Minor and Thaenae. There was also a large number of secondary cities which probably had populations between ten and twenty thousand such as Sabratha, Madauros, Thamugadi, Thubursicu, and Numidarum.

This is actually in line with Temin’s analysis. He describes an urban society `that was unique in the ancient world’ (Temin 2013, 223). But he does not directly connect this to the argument I am making here, which is, that for such a highly urbanization preindustrial society, the predictive power of the basic one-sector Malthusian model may be highly limited. My suggestion is that to go beyond the admirable analysis contained in The Roman Market Economy, economic historians will have to go beyond reliance on a Malthusian framework and adopt models of the kind suggested by Wu and others.