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The Roman Market Economy

The Roman Market Economy

Peter Temin
Copyright Date: 2013
Pages: 312
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  • Book Info
    The Roman Market Economy
    Book Description:

    The quality of life for ordinary Roman citizens at the height of the Roman Empire probably was better than that of any other large group of people living before the Industrial Revolution.The Roman Market Economyuses the tools of modern economics to show how trade, markets, and the Pax Romana were critical to ancient Rome's prosperity.

    Peter Temin, one of the world's foremost economic historians, argues that markets dominated the Roman economy. He traces how the Pax Romana encouraged trade around the Mediterranean, and how Roman law promoted commerce and banking. Temin shows that a reasonably vibrant market for wheat extended throughout the empire, and suggests that the Antonine Plague may have been responsible for turning the stable prices of the early empire into the persistent inflation of the late. He vividly describes how various markets operated in Roman times, from commodities and slaves to the buying and selling of land. Applying modern methods for evaluating economic growth to data culled from historical sources, Temin argues that Roman Italy in the second century was as prosperous as the Dutch Republic in its golden age of the seventeenth century.

    The Roman Market Economyreveals how economics can help us understand how the Roman Empire could have ruled seventy million people and endured for centuries.

    eISBN: 978-1-4008-4542-2
    Subjects: History, Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface and Acknowledgments
    (pp. ix-xiv)
  4. Chapter 1 Economics and Ancient History
    (pp. 1-24)

    The reputation of the Roman Empire lives on long after the empire itself vanished. Roman literature, Roman archaeological remains, and Roman analogies—particularly now in our time of troubles—confront us at every term. Books likeAre We Rome?trumpet the analogy, and less extensive allusions are frequent (Murphy 2007; Smil 2010). It often seems as if we are as familiar with the history of ancient Rome as much as of the recent history of the Western world.

    While this was true in the late eighteenth century, as witnessed by the writings of our founding fathers, it is no longer...

  5. Part I: Prices

    • Introduction: Data and Hypothesis Tests
      (pp. 27-28)

      The Romans talked and wrote constantly about prices. It seems obvious that they must have been using these prices in their daily lives to leave us so many price quotes. Yet there has been doubt over the years whether the Roman economy was dominated by markets. I reviewed a small corner of this debate in chapter 1, and I turn in this section to documenting some of the assertions made there.

      While there is lots of information about prices and transactions, there is little of what economists call data. Data, as economists consider it, consist of a set of uniform...

    • Chapter 2 Wheat Prices and Trade in the Early Roman Empire
      (pp. 29-52)

      Most ancient historians are comfortable with the idea that there were local markets in the late Roman Republic and the early Roman Empire. There are many documents attesting to purchases of local goods and services both in Rome and outlying areas. Any assertion that these local markets were tied together into a series of interdependent markets is more controversial, as noted in chapter 1. I use wheat prices in this chapter to test the proposition that many wheat markets across the Mediterranean were interconnected and interdependent.

      The theory of comparative advantage described in chapter 1 implies that there were advantages...

    • Chapter 3 Price Behavior in Hellenistic Babylon
      (pp. 53-69)

      The previous chapter exploited a tiny data set of only a half-dozen observations. The prices in these observations appeared to be market prices, and I treated them as such. There was, however, no demonstration that they were market prices, that is, that they were the results of changing supplies and demands as explained in chapter 1.

      One reason it has been hard to demonstrate the existence of ancient markets is that there is a paucity of ancient prices in the surviving records. Duncan-Jones (1982) and Rathbone (1997) collected prices for common articles in an agricultural economy—albeit one with many...

    • Chapter 4 Price Behavior in the Roman Empire
      (pp. 70-92)

      Returning from Babylon to Rome, I take a different approach to scarce Roman data in this chapter. The approach employs the simplification of economic models introduced in chapter 1. In this case, I summarize the complex phenomenon of Roman inflation into a simple dichotomy. Inflation was either on or off. Either there was inflation or there was not. This kind of zero-one choice is the basis of all our modern computers, and that analogy indicates that simplification can lead to complex results if handled creatively. This approach also follows the literature of ancient Rome where historians implicitly assume this binary...

  6. Part II: Markets in the Roman Empire

    • Introduction: Roman Microeconomics
      (pp. 95-96)

      This section contains most of the material that I anticipated gathering when I drew up my research plan in Roman economic history more than a decade ago. I surveyed these markets briefly in the initial research plan I took around at the Oxford conference where everyone laughed at me. That proposal grew into Temin (2001), perhaps my most widely noted paper. The chapters in this section provide a more sustained examination of Roman microeconomics, that is, the study of individual Roman markets.

      Wheat was the most widely traded commodity in Roman times. I described the Mediterranean wheat market as a...

    • Chapter 5 The Grain Trade
      (pp. 97-113)

      Long-distance trade in the many centuries before the telegraph was beset by information problems. There was the uncertainty present to all when ships set out and people awaited their return with little or no news in the interim. There also was the need to transact business at a distance when information traveled slowly, often by using an imperfectly controlled agent. The problem of finding good agents and providing proper incentives for them has been studied for the early modern world and even occasionally for the medieval world. I extend this exploration back into the ancient world in this chapter, analyzing...

    • Chapter 6 The Labor Market
      (pp. 114-138)

      It often is said that ancient Rome was a slave society. Hopkins (1978) was the first to assert that Rome was one of only five slave societies in recorded history, a view adopted quickly by Finley (1980). This characterization is important because slavery is used as a sign of a nonmarket economy. Polanyi (1944) located the center of the transition to an industrial economy in the labor market. He argued that labor markets in the modern sense did not exist before the Industrial Revolution and the Poor Laws that accompanied it in England. This view is consonant with Weber’s (1930)...

    • Chapter 7 Land Ownership
      (pp. 139-156)

      The market for land in the Roman Empire worked approximately like the land market today. We buy and sell land today with few impediments and use it as we wish; we own land as afreehold. The Oxford English Dictionary defines a freehold as “permanent and absolute tenure of land or property with freedom to dispose of it at will.” The dictionary continues that the term originated in the fifteenth century and “was originally used to denote the holding of an estate in land with the rights of a free man, as opposed to a villein, and was taken to...

    • Chapter 8 Financial Intermediation
      (pp. 157-190)

      In order to evaluate the sophistication of the Roman financial market, we need to know if there were credit intermediaries, that is, institutions that mediated between borrowers and lenders, obviating direct contact between them. The most popular credit intermediaries in many societies are banks, and it is fortunate that ancient historians and modern economists employ the same definition of a bank. Cohen (1992, 9) opened his discussion of Athenian banking by quoting the legal definition in use in the United States today. This same definition can be found in a recent textbook on financial markets and institutions, which states: “Banks...

  7. Part III: The Roman Economy

    • Introduction: Roman Macroeconomics
      (pp. 193-194)

      This final section brings together my thoughts and speculations on the implications of the preceding chapters on individual markets. When I began working on Roman economics, I did not think there was enough information to deal with macroeconomic questions of economic growth and the size of the economy. I still believe that the shortage of information makes these questions difficult and elusive. I hope that readers who have followed me so far in my intellectual journey will be encouraged to stay along for thoughts and speculations about what all the market activity of the Roman Empire meant for ordinary Romans....

    • Chapter 9 Growth Theory for Ancient Economies
      (pp. 195-219)

      The first sentence ofThe Cambridge Economic History of Europevolume on the Industrial Revolution states baldly, “The characteristic which distinguishes the modern period in world history from all past periods is the fact of economic growth” (Cole and Deane 1965, 1). The categorical assertion that economic growth started only with the Industrial Revolution makes a strong statement about ancient history. The authors did not consider that the Roman Empire lasted far longer than the United States has been in existence and that the question of economic growth under its rule cannot be decided by fiat. It would be far...

    • Chapter 10 Economic Growth in a Malthusian Empire
      (pp. 220-242)

      There is growing evidence that ordinary Romans lived well in the early Roman Empire. The existence of many cities, and particularly the large size of Rome itself, provides indirect evidence of productivity advance. More detailed evidence is emerging of improving agricultural technology, building techniques, manufacturing plants, and land use. The widespread use of African Red Slipware pottery provides evidence that even ordinary people had access to the fruits of all this technology. And the literary evidence supports the idea of prosperity by providing insights into civilized urban lives in Roman cities. As explained in chapter 9, these are all proxies...

    • Chapter 11 Per Capita GDP in the Early Roman Empire
      (pp. 243-262)

      Economic growth for a sustained time was possible in a Malthusian world (see chapter 10). There is indirect but compelling evidence that economic growth took place in the late Roman Republic and early empire. Not rapid growth of the modern era, but growth that appears to have progressed slowly over a few centuries. How far did this economic growth raise Roman incomes? Was the standard of living raised above its level before and after? If growth took place in Roman Italy—with its large cities and gains from war booty—did it extend to the provinces? These are questions for...

  8. References
    (pp. 263-288)
  9. Index
    (pp. 289-300)
  10. Back Matter
    (pp. 301-302)