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The Origins of Business, Money, and Markets

The Origins of Business, Money, and Markets

Keith Roberts
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  • Book Info
    The Origins of Business, Money, and Markets
    Book Description:

    Understanding the origins of business is fundamental to grasping modern life, yet most historians look no further than the nineteenth century for their narratives. While the industrial revolution profoundly shaped business practice and much of the corporate organization we recognize today, the full sweep of business history actually begins much earlier, with the initial cities of Mesopotamia. In the first book to describe and explain those origins, Roberts travels back to the society of ancient traders and consumers, recasting the rise of modern business and underscoring the parallels between early and modern business practice.

    Roberts's narrative begins five thousand years ago in the Middle East, explaining why prehistoric tribes had no "business." He describes the lack of material conditions and conceptual framework that made such an interchange impossible, and then locates the origins of business in the long distance trade of ancient Mesopotamia, especially within its slave trading, retailing, and financing practices. He maps the rise of modern models of currency, markets, and business in Greece, along with the emergence of banking, mercenaries, and reliable small coinage, and he follows the conquests of Alexander the Great, which brought these advances to the Mediterranean world and the Middle East.

    With the growth of agribusiness, Romans developed public contracting, corporations, and even shopping malls, yet in the third century A.D., business mysteriously, virtually disappeared. In each of his chapters, Roberts portrays the major types of business thriving within a certain era and the status, wealth, and treatment of business owners, managers, and workers. He focuses on issues of business morality, the nature of wealth, the role of finance, and the development of public institutions shaping business possibilities, advancing an absorbing account of a long neglected history.

    eISBN: 978-0-231-52685-2
    Subjects: Business, History, Finance

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
    (pp. ix-xiv)

    I have had the pleasure of reading successive versions of this book across the past seven or eight years and watched with admiration as its proportions and literary elegance improved with each revision, eventually emerging as a masterpiece with no close parallel amid all the vast freight of classical learning and scholarship that burdens library shelves.

    As a former professor of history myself, with nothing to do but teach and write, I was amazed to know that what I was reading came from the hand of a businessman and lawyer, who somehow found time in his busy schedule to seek...

    (pp. xv-xviii)
    (pp. xix-xxii)
  6. Introduction
    (pp. 1-4)

    As manager of a small manufacturing and distribution company, I was stomping around my office late one night, frustrated with our antiquated business practices. I heard myself mutter, “This place is run like a Roman blacksmith shop!” and I stopped pacing. How did they run blacksmith shops in Rome, I wondered? Did they even have any? What were they like? In fact, how did business, to which billions of us now devote our working lives, even begin? What are the important differences between ancient businesses like Roman blacksmith shops and the computerized, outsourced, Internet-linked, machine-based businesses of today? To find...

  7. PART 1: Business in the Ancient Middle East

    • Introduction
      (pp. 5-8)

      Business began in the earliest civilizations, those of the Middle East. Part 1 concerns three questions:

      Why did business begin when it did, and not before?

      Why and how did it begin there?

      What subsequent Middle Eastern developments were importantto it?

      The first part of chapter 1 argues that before societies organized on a scale larger than the tribe, living conditions and human mentality did not conceive of profits. There were plenty of activities that we now identify with business, such as manufacturing and trade, but like celebratory gift exchanges today, they was not conducted for profit as we conceive...

    • 1 The Beginning
      (pp. 9-27)

      Contrary to the implicit dogmas of current free-market triumphalists, free markets and businesses have not been with us since the dawn of time. Business—the activity of selling for a profit—dates from only the start of urban civilization in Mesopotamia, about five thousand years ago. There was certainly plenty of prehistoric manufacturing and trade, but profit and the desire for it were unknown. The conditions that made cities possible also made for wealthy elites, and the desire for profit took seed with the accumulation of wealth. What were these new conditions? Why in Mesopotamia, not Egypt? Which businesses arose...

    • 2 Middle Eastern Empires, 1600–323 B.C.E.
      (pp. 28-46)

      Great technological and political disruptions introduced successively larger, better-governed Middle Eastern empires, including the first truly colonial power. Trade, rising in volume but frustrated by imperial rivalries, increasingly fell to favorably located commercial states like those of the Phoenicians. Though not strictly businesses, they avidly pursued commercial profit, even inventing our alphabet to simplify mercantile recordkeeping. As the Assyrian and Persian Empires created larger markets, trading costs fell. Within the enormous Persian Empire “the umbrella of the Persian peace”¹ quickened commercial activity despite the lingering command economy, setting the stage for the transformations that Alexander the Great would bring.


  8. PART 2: Business in Ancient Greece

    • Introduction
      (pp. 47-50)

      Business first took modern form in ancient Greece, where money, markets, and entrepreneurial businesses began coming together in the early sixth century. Entrepreneurial businesses vied to sell their wares in public markets to the populace at large. Goods were allocated by purchase, rather than by status or political consideration. With Alexander the Great’s conquest of the Persian Empire, the civilized Western world experienced an unprecedented political, social, and economic revolution. The Macedonian kingdoms that divided up Alexander’s empire after his death largely replaced the command economies of the Middle East with a modified version of the free-market economic model developed...

    • 3 Markets and Greece
      (pp. 51-70)

      Business in its modern guise first appeared in the small, weak, and poor city-states of ancient Greece.¹ There, for the first time, money-based markets gave entrepreneurial businesses a central economic position. It’s a complex story that includes

      the geography, culture and social structure of early Greece

      the education and opportunities provided by Greece’s Middle Eastern neighbors

      new military technology and mercenary earnings

      changing political structures

      the invention of coinage

      Like much of business history, this story begins with the underlying social, political, and technological framework.

      Centered on the Aegean Sea, ancient Greece included not just the southern end of the...

    • 4 Business in Athens
      (pp. 71-83)

      Since the key to Athenian business activity was the widespread purchasing power of its residents, I will start with its money and credit institutions. That fueled the trade, manufacturing, and retail businesses. Next I will look at the workforce: citizens, women, slaves, and resident metics, those foreigners allowed to live and work there. Finally, I’ll contemplate the rather ambivalent social status of business.

      The money supply described in the previous chapter was one of two main forms of purchasing power.¹ The other was credit. Coins made credit easier to provide, so there were “thousands upon thousands of … loans made...

    • 5 Hellenistic History: Prologue to Revolution
      (pp. 84-100)

      The markets and businesses that supplied democratic Greek city-states might well have remained a regional curiosity had Alexander the Great and his successors not wrought a social and economic revolution in the Middle East. The fascinating story begins with politics and power. The Middle East’s social and economic structures had always outlasted its many conquerors and major technological changes. This chapter, while providing a brisk summary of Hellenistic political history, addresses the question of why the Macedonians had so much more profound an impact than others and how it happened that a modified version of the Greek business environment spread...

    • 6 The Hellenistic Business Environment
      (pp. 101-115)

      The innovations in royal power discussed in the last chapter made possible a series of social and practical changes that transformed the nature of business. The main changes took place in the role played by city-states, the use of technology, the amount and distribution of wealth, and the development of international trade law.

      Hellenic culture was imposed throughout much of the territory that Alexander had conquered through a local administrative structure of city-states. The Macedonian conquerors, who despised the native elites and rejected their society, sought to supplant them root and branch, except in religious institutions. To this end, instead...

    • 7 Hellenistic Business
      (pp. 116-132)

      The Hellenistic kingdoms formed a large new market for goods and services. Trade networks multiplied, as did new trade routes. The major new business categories of the era were agribusiness and professions like architecture, art, theater, poetry, medicine, and athletics. There were also significant innovations in banking, financial operations, and labor management. The concentration of wealth had made financing more expensive for entrepreneurs, as previously noted, and business activities had generally become less profitable as they had become more common.¹

      Since cities lived on food from their hinterlands, most trade was for locally produced food and cloth. Still, with the...

  9. PART 3: Business in Ancient Rome

    • Introduction
      (pp. 133-138)

      Roman business originated in war, flourished in peace, and foundered in disorder. For approximately four centuries, from the time Rome first acquired an overseas empire in 200 B.C.E. to the near-disintegration of the empire in the third century C.E., business played an increasingly significant role in Roman economic life. But Roman business was not just Hellenism writ large. During the first two centuries C.E., a crucial reason for its success was the extraordinary imperial achievement called the Roman Peace. Some fifty million people throughout the empire enjoyed a largely peaceful and orderly state, with common languages, currencies, laws, and customs,...

    • 8 The Early Roman Republic
      (pp. 139-156)

      Roman business was truly distinctive. For most of the city-state’s first five centuries, business hardly existed; then, as Rome fought Carthage for dominance in the western Mediterranean, Roman business got its start supplying the war effort. From these wars, agribusiness emerged, its management the model for all Roman businesses. That said, the unusual nature of Roman business sprang from three features of Roman culture. One was patronage, a set of behaviors and understandings that underlay the remarkable entrepreneurship, scope, and scale that Roman businesses achieved. The second was the extensive use of public contractors to do the state’s work, thereby...

    • 9 The Late Roman Republic, 201–31 B.C.E.
      (pp. 157-175)

      Business wielded more power and political influence during the last two centuries of the Roman Republic than at any other time before the Renaissance. Italian agribusiness, with leaders like Cato the Elder, suppressed overseas competition; and publican societies helped persuade the Senate to adopt imperialist policies. Then, using its power to free itself from regulation, Roman big business destroyed much of what it had achieved. Its excesses inspired colonial hatred and bloody uprisings, which led to radical changes in Rome’s political structure and world outlook.¹

      Cato the Elder (234–149 B.C.E.) was Rome’s leading politician in the decades after the...

    • 10 The Principate, 31 B.C.E.–192 C.E.
      (pp. 176-197)

      Here begins the story of business in the early Roman Empire, a period called the Principate because Augustus and his successors humbly called themselves princeps, or “first citizens,” and were elected by the Senate. During these two centuries business enjoyed better conditions than ever before, and we also know far more about it. Business would not reach these heights again for another thousand years.

      Two developments during the Principate altered the history of business:

      Augustus, like Alexander, created political changes that dramatically improved business conditions. Without his work, the Roman Empire could not have lasted very long. Until its end, the...

    • 11 Roman Society
      (pp. 198-216)

      I have written a great deal about what made business important during Roman times, specifically from the conquest of Carthage in 200 B.C.E. to the end of the Principate around 200 C.E. This chapter will focus more on what business was actually like during that time:

      the demand for goods and services, fueled by private purchasing power in the empire’s cities

      the nature and operation of business enterprises, contracts, agents, and property transactions as molded by Roman law

      the sources and conditions of labor

      the status of business and its practitioners

      Roman wealth was a vital aspect of the Principate’s...

    • 12 Roman Businesses
      (pp. 217-244)

      We know much more about Roman business operations than those of earlier societies. Except where noted they did not change much over time; this chapter will therefore treat a fairly broad period, ranging from 200 B.C.E. to 200 C.E. and sometimes beyond, as a single unit of time. The businesses described here fell into three broad categories:

      the manufacturing, primarily artisanal, of metals, processed food (primarily bread), textiles, and pottery

      trade, including retail, long-distance, and market activities

      services, most prominently entertainment and finance

      Of the empire’s full-time nonagricultural workers, an estimated 20 percent were engaged in mining, refining, and working...

    • 13 The Downfall of Ancient Business
      (pp. 245-262)

      Here I will discuss the disintegration of business in Western Europe during the third century and why it could not recover even as the Roman Empire returned to great prosperity later on.¹ Business survived, however, in Africa and the eastern half of the Roman Empire. Byzantium and the Arab forces that triumphed in the seventh century therefore inherited an urban system of money, markets, and entrepreneurial business that it would return to Europe during the early Renaissance.

      In 165 C.E., four years after Marcus Aurelius took office, Roman legions returned from war against the Parthians in Mesopotamia bearing the plague...

    • Concluding Note
      (pp. 263-270)

      I would like to conclude this book with a personal view of what the story of early business has taught me. One of the questions I hoped to understand was this: what, exactly, is new in modern business? The answer, discussed below, surprised me; and with it came answers, or at least partial answers, to other questions I have long entertained, such as the role of business in creating wealth, the function of finance, the place of morality in business, and the role of business in society.

      The crucial difference between modern business and that of ancient times is not...

  10. NOTES
    (pp. 271-320)
    (pp. 321-342)
  12. INDEX
    (pp. 343-358)