A VERY quick survey of some aspects of the economics of ancient empires. This is very useful at early stages of analyzing the computer game Civilization...

1. Property & Empire:Property & Empire:
• Neolithic villages (40000-4000BCE):
– Private: tools, weapons, ornaments
– Common: land, livestock, buildings
• Sumerian temple cities (3500BCE):
– 90%+: slaves, peasants, unskilled workers
– Temple (Deity):
• land, livestock, buildings
• Administrated by priests
• Protected (by 3rd
millennium) by warrior class

3. 11stst
Empire: Sargon of Akkad (2340BC)Empire: Sargon of Akkad (2340BC)
Sources of social stratification:
– Ethnic/tribal explanation:
• Sumerian is unrelated to any other language
=> Sumerians were thus probably conquerors
• Empires established dominate the Neolithic
populations the “united”
• Once established, imperial surplus becomes an
incentive for conquest or pillage
• Mythological “god wars” probably refer to this
– Marxist: private property (private weapons...)
– Cumulative causation: it’s both!

4. Technological advancesTechnological advances
• Smelting iron ore (Primarily for military)
• Chariots
• Battle ships
• Irrigation
– Specifically in riverine empires
– Requires large-scale organization
(government)

6. Trade: PhoeniciaTrade: Phoenicia
• Early stage:
– High value goods only
– From the Celts to the Indus valley
• Phoenicians:
– Established by 3000BCE (recorded history)
– Home ports: Sidon & Tyre in today’s Lebanon
– Fully specialized sailors & merchants
– Colonies around Mediterranean (Carthage)
– Tin from England, circumnavigated Africa(?)

8. Trade: Greece (origins)Trade: Greece (origins)
Mycenaean civilization (14-12 c. BCE)
• Knossos, Island of Crete
• Maritime life due to poor resources
• Adopt Phoenician “business model”
• By 8th
c. dominate the E. Mediterranean
• Homeric epics (Troy, Odysseus):
Black Sea trade wars

9. Mycenaean Civilization
Knossos, Crete
14-12th
centuries BCE

10. Trade: Greece (growth)Trade: Greece (growth)
• Population pressure generates colonies
• Colonies generate food surplus
• Allowing:
– “Old” cities (Aegean) specialize in wine & oil
• High value goods
• High income for core cities
• Economic interdependency
• Colonies tied to “Empire” by commercial
relations & NOT political control

12. Golden Age of Athens (500BC)Golden Age of Athens (500BC)
• Banking, insurance, etc.
• Coined money (1st
in Lydia):
– Reduces transaction costs
– Established issuer reputation / credibility
– Virtuous circle:
• Greeks distribute silver coins throughout colonies
• Athens secures major silver source in Laurium
• Athenians gain dominance with triremes
• Conflicts & doom: Persians & Sparta

13. Alexander the Great (300BC)Alexander the Great (300BC)
• Hellenistic culture, language, & trade
• Greeks dominate civil-service & trading
• The Empire quickly collapses but the
culture & commerce remain
• Alexandria:
– 500000+ population
– Library
– Trade in staple goods & a large variety of
luxuries from as far as China

15. The Rise of Rome (500-200BC)The Rise of Rome (500-200BC)
• Rome combined 2 imperial “paradigms”
– Maritime (Phoenicia, Greece):
• Loosely connected colonies
• Food assured through shipping
• Ships can be held in reserve
• Low costs; especially as size increases
– Land-based (Persia):
• Direct political control of colonies
• Need for standing army
• High costs; especially as perimeter increases

17. Rome (500-200BC)Rome (500-200BC)
• Society & culture: Small independent
farmers with high regard for property rights
• Legal system:
– Freedom of enterprise
– Commerce tolerated
– Enforcement of contracts & property rights
– Settlement of disputes
– A uniform & coherent legal framework for
economic activity throughout the empire

19. Roman Empire (200BC-14AD)Roman Empire (200BC-14AD)
• Food surplus is taken to a new level:
– Huge fleets:
wheat from Sicily, North Africa, & Egypt
– 200,000 of the Roman plebeians got free food
• Pax Romana (The “Roman Dream”):
– Road system used for military deployment
– Legions “pacifying” the periphery
– Piracy & brigandage very low

21. Roman Empire (14-114AD)Roman Empire (14-114AD)
• Population rises to 100 million
• Roman free artisan’s real earnings
=
1850 British factory worker
=
1929 Italian worker.
• BUT: Slave labor fluctuates with military
expansions (military business cycle)

23. Trouble in Paradise (Early 200s)Trouble in Paradise (Early 200s)
• Barbarian incursions & rising piracy
–Increasing reliance on mercenaries
–Low moral & reduced effectiveness
• Problem:
–Imperial economy must pool many
small-scale surpluses through taxation
–This depends on the flow of commerce

24. Trouble in Paradise (continued)Trouble in Paradise (continued)
• Localized labor shortages
– Slaves were scarce & more prone to revolt
– “problem spots” pacified with consumption
• Monetary inflation
– Coin debasement due to budget deficits
– Rising defense costs
• Internal corruption (private & public)

26. Trouble in Paradise (Late 200s)Trouble in Paradise (Late 200s)
• Diocletian:
– Fixed wages & prices to fight inflation
– Professions & offices become hereditary
– Inflation prompted “levies in kind”
• Demonetizing the economy
• Production for market & specialization declines
• Undermining the basis for the imperial economy
– Taxes rise
• Most nobles were excluded
• Commoners seek protection (physical & fiscal) at
estates which start to resemble feudal castles

27. The Big PictureThe Big Picture
• Technological advances are confined:
– Roads, aqueducts, architecture
– No labor-saving technology
• No incentive for slaves/farmers/workers to
innovate since they will not reap the benefits
• Small privileged classes devoted to:
– War, government, arts & sciences, &
conspicuous consumption
• Surplus is almost only imperially based

29. Towards the Dark AgesTowards the Dark Ages
• Barbarians shrink territory & commerce
• Split: East & West
like a corporation spinning off a failing subsidiary
—the Western empire):
– East: Byzantium (Constantinople) survives
until the Ottomans (15th
c.)
• Probably due to better management & less
parasitic nobility
– West: Holy Roman Empire (Rome) implodes
under increasing barbarian pressure by 476