Theorizing about Ancient Economies

As noted in my earlier posts (here and here), ancient economic history is necessarily reliant on theory. This is true of all economic history. But it is especially so when studying the ancient world, where evidence is scarce relative to the number of possible interpretations.

The theoretical framework of the first scholars who seriously studied the ancient economy in the 1890s was taken directly from the classical economists. These scholars are referred to as modernizers because they envisioned the ancient economy as comparatively ‘modern’. Scholars such as M. I. Rostovtzeff were comfortable using terms like capitalistic to describe, say, the development of viniculture in 2nd century AD Gaul. They saw in the Roman world a market economy connected by long-distance trade at least comparable in scale and scope to that of early modern Europe.

The assumptions made by the modernizers — that, say, when an ancient source is describing a financial contract, they are describing something akin to what existed in the 19th century — came under attack after 1945. So-called anti-modernizers — the most influential of whom was Moses Finley— questioned precisely these assumptions.

Finley was influenced by both Max Weber and Karl Polanyi. His most famous work is The Ancient Economy. From Weber, Finley inherited an emphasis on the importance of structures — structures of thought, and particularly, of status. Elites in the ancient world, he argued, saw land and property ownership as central to the maintenance of their status. They did not comprehend, and were not interested in, modern notions of the ‘economy’ nor did they have sophisticated bookkeeping or means of economic calculation.

From Polanyi, he took the argument that the market economy was a fairly recent and idiosyncratic historical development. Polanyi dated its emergence to England after 1800. Finley saw hints of it in Athens in the 330s BC. But, in general, he emphasized the limitations of the ancient economy, which he saw as characterized by self-sufficiency, low levels of long-distanced trade, and limited markets.

This theoretical lens was a source of insight but also, as the scholarly consensus increasingly recognizes, extremely limiting. The Weberian emphasis on mental modes seems misguided. It is unsurprisingly that the literary sources that survive indicate that Roman and Athenian landowners did not have a ‘capitalist’ mentality — they did not maximize profits and thought in terms of patronage and the exchange of favors.

Even today it is easy to find evidence of a non-capitalist mentality. Perhaps a majority of people in today’s `capitalist’ society, including members of the literary and scholarly elite, lack such a mentality — many Americans save little (and they save less than economic theory predicts), struggle to understand the stock market, and frequently borrow on credit cards for consumption purposes.

Unsurprisingly, given the literary nature of our evidence, it is difficult to find direct evidence of calculating and profit-seeking behavior in antiquity. But this doesn’t mean that it was not present. Merchant handbooks and record books almost certainly existed but not enough of them have survived for us to analyze them in a systematic way.

I think Polanyi can be dismissed more summarily than Weber. The weakness of Polanyi as an economic historian have been brilliantly exposed in this essay by Santhi Hejeebu and Deirdre McCloskey. Finley himself disagreed with Polanyi’s assessment of ancient economies, but he retained from him an emphasis on the novelty of market economies in the modern period that now seems unwarranted.

The limitations of this paradigm became evident over time. For example, an article by Kevin Greene in the Economic History Review forcefully made the point that Finley’s assessments were inconsistent with recent evidence dug up by archaeologists.

Recent research has moved beyond the dichotomy between modernists and anti-modernists. Ian Morris, Joshua Ober, Neville Morley, Walter Schiedel and others have written extensively on the ancient economy. And in so doing, they have begun to borrow theoretical concepts from economics. A leader in this field is Peter Temin whose book The Roman Market Economy I have briefly written about elsewhere. In my next post I will address some of the ideas in Chapter 10 of that book which is entitled Economic Growth in a Malthusian Empire. Then I will tackle the use of theory in some other recent works of ancient economic history.